AP TIME'S OVER; THE DEAL SHEET

The New York City office market has awoken from its slumber. Investors have been attracted to high-quality properties despite plunging cap rates, as they offer an attractive spread to low-yielding Treasuries, according to exclusive CoStar research.
Overall investment activity has now surpassed all of '09's total in back-to-back quarters. The first quarter kicked off with mostly distressed sales, including 4 New York Plaza selling for less than $100/SF. Investor sentiment shifted in the second quarter as buyers such as SL Green targeted core assets in premier micromarkets such as the Plaza District and Grand Central. By the time the third quarter came around, investors were willing to step out further along the risk spectrum. TIAA-CREF purchased 685 Third Ave., which Pfizer is vacating as it cuts staff in the city, while Boston Properties picked up vacant 510 Madison, a boutique office property in the heart of the Plaza District.

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