Summer 2019 Investment Property Sale Pricing

The average price per square foot for the purchase of an office building / high-rise on Manhattan was $914 per square foot in the spring of ‘19 (Robert Knakal, CO, 4/16/19). 398 Fifth Avenue, a 39 story 460,000 square foot tower, traded in May of 2019 for $381 million, or $828 a square foot. The 2018 sale of the Chelsea Market building at $2.4 billion, or $2,000 a square foot, ends up breaking all kinds of records, but it is Google money, and so should not be considered "ordinary." Other record setting numbers are the GM Building at 767 Fifth Avenue ($2.8 billion, or $1,400 per square foot), 11 Madison Avenue ($2.3 billion, or $973 per square foot), 3 Bryant Park ($2.2 billion, or $1,875 per square foot) and 245 Park Avenue ($2.2 billion, or $1,127 per square foot).In 2017, the average sale price for office properties dropped 23 % in 2016 - 2017 from $964 to $741 (REW 4/19/17). The most recent benchmark sale was for the Goldman Sachs building at 85 Broad Street, which sold for $650 million, or $580.00 a square foot. The price would have been higher had it been in midtown.

Other record sales per square foot for office properties in New York were the Jaunuary, 2015 trade of 837 Washington Street, which is a 63,000 sf property, that went for $200 million, or $3,158 a square foot, and the Crown Building sale, 730 Fifth Avenue, which traded for $4,490 per foot for the 400,000 square foot tower. The re-addressed 1.2 million rentable square foot 3 Bryant Park sold late in 2015 for $1,800 per square foot...1285 Sixth Avenue sold to the Chinese for about $916.00 a square foor in June of 2016...

The most expensive office building sale in 2013 was 650 Madison Avenue, which sold for $1.35 billion, or about $2,200 a square foot. The highest sale on a per square foot basis for a New York City office class A building in 2017 is set to be the the $2.21 billion sale ($1,220 per square foot) of 245 Park Avenue. Other exceptionally high sales in the same year were the purchase of 525 Broadway, a 45,000 square foot class B loft building, that closed for $1,900 a square foot and the sale of 12 West 57th Street, which closed for $120 million, or $1,400 a square foot. 650 Madison Avenue traded for $2,100 per square foot in the fall of 2013 ($1.295 billion for 600,000 sf). The early 2015 sale of 281 Park Avenue South, which traded for $1,111 PSF is also a good number to note. The largest building sale in 2016 was for 787 Seventh Avenue, (1.7 million square feet, $1.9 billion / $590.00 a square foot).

A recent residential development site sale shows a bit lower price per developmental square foot.....350 East 86th Street, a one story grocery store building, sold for $100,000,000, or $434.00 a dsf CNYB 8/24/15).

In the fall of 2013, the average sale price, per square foot, for a hotel property was $701,
and for multifamily properties $472. For 2013 average price per square foot for the purchase of a class A office building was $911.00 (10/8/13 CO). For all office buildings, the average sale price per square foot in 3Q13 was $693.00, a 21% increase from 2012 (CO 11/5/13).
By the mid 2008's, prices for class "A" office buildings were as high as $1,566 per square foot at 450 Park Avenue (which then traded for $1,700 in 2014) , $1,200 per square foot for Five Times Square, and $1,578 per square foot for the General Motors Building.

One would think that those days would be long over, but in January, 2013, a similar deal was announced to sell the Sony Building at 550 Madison Avenue for $1.1 billion, or over $1,300 a square foot, which to this broker seems way too high. This could be compaired to the low sale of the AIG downtown buildings at 70 Pine and 72 Wall Street (a total of 1.4 million square feet of office space), which sold for $105 per square foot in June of 2009. Worldwide Plaza's sale at $375.00 a square foot was for almost a third of what Maclowe had paid for it just a few years earlier.

Air Rights + Construction Costs

Air rights, which is a complicated concept, can go for as much as $600 a buildable square foot (Christ Church on Park Avenue) but may average about $200. In 2015, the developers of the Dream Hotel paid the owners of the Neil Simon theatre $450.00 a square foot for their air rights (CO 8/5/15). Extell paid $475.00 a square foot for the Helen Hayes Theatre's air rights at 1710 Broadway in the fall of 2016, with Howard Hughes' paying $438 at the same time for their South Street site (TRD 12/16). Real Estate Weekly reported on October 25th of 2017 that the City Planning Commission was proposing that Chelsea air rights be sold at $500.00 a square foot....with the current average being $297.00 a square foot.

Construction Costs
It costs $362.00 per square foot to build a new building in New York City (TRD 7/18) or $368.00 REW 4/24/19). That would be second only to San Francisco...

Residential Condominium Prices per square foot
The average price per square foot for a new residential (Manhattan) condominium in February of 2017 was $2,209 (RD 2017 DB). The median price for all Manhattan apartments (co-ops and condos) was reported to be $900,000 (C 1/9/17( which is down quite a bit from the previous year ($1.2 million REW 1/16/16), with the average price for a Manhattan apartment hitting $2.05 million during the first quarter of 2016 (TRD 4/16). Co-ops are often much lower in price, and averaged at $1,178.00 a square foot. The most expensive condos that have recently sold went for more than $8,000 psf (at One 57 and close to that at 432 Park Avenue / the record sale for 2016 was PH 96 at 432 Park Avennue, which sold for $87.7 million, or $10,623 a square foot)).

The most expensive sales per square foot for a very limited number of apartments are approaching $10,000 (REW 1/11/17). 15 CPW #38A traded for $9,838 psf on 6/23/16. The highest deals per square foot at One 57 were realized for the 82nd floor, which traded for $8,990 a square foot, and the PH, which sold for...$100 million, or $9,090 a square foot (in January of 2015). Other benchmark sales have included 150 West 26th Street: $7,574, 15 CPW: $7,238, 25 Columbus Circle: $5,526, 18 Gramercy Park: $5,072, 1 Bond Street: $4,966, 421 Hudson Street: $4,745, 100 CPS: $4,368, 400 West 12th Street: $4,227 and at number ten... 132 East 65th Street: $4,164...212 Fifth is currently asking between $2,500 to $4,500 a square foot, which is probably a good range for comparison...(REW 9/16/15).

Residential Rental Buildings
In 2016, the average price for a rental apartment in Manhattan was $3,999 (REW 9/14/16). The average "luxury" rental in February of 2016 went for an astounding $9,962 per month (TRD 4/16). There is currently an excess of inventory, according to some rental brokers. although overall vacany rates are at 1.42%. The average studio rental was $2,675. For a one bedroom: $3,350. For a two bedroom: $4,647. For a three bedroom: $5,500. For NEW Developments, the average studio rental (January 2017) was $3,200, for a 1 bedroom $4,062, for a 2 bedroom $6,283 and for a 3 bedroom $14,667) (TRD 1/17). As long as rent control and rent stabilization remain, these high rental prices will be unlikely to go down.


Manhattan Parking Spaces
In March of 2017 a garage package went on sale with spaces going for $65, 326. The Commerical Observer (3/1/17) reported that spaces can sell for up to $175,000...which is no
surprise. Parking spaces rent from $350 up to $1,500 per month in prime residential neighborhoods. The city limits the number of new garage spaces that can be built / included in new buildings, which is why spaces cost so much.

Longstreet & Associates Inc Licensed Real Estate Brokers and Consultants Equal housing / office and retail space for all 59 East 54th Street, Suite 64, New York, NY 10022 212-980-6285

Prime Land Sales/ Empty Lot Pricing

To purchase a development site (often times an empty lot), the cost per buildable square foot (how much you are permitted to build on that site) averaged in $681.00 in 2016 (TRD 7/17). Most of that amount would be for the air above the soil....only in New York!

The Hotel Business
The price of hotel rooms has declined by 30 - 50 % in the past two years, and so finally the price to purchase hotels has come down as a result, which was needed. The Viceroy on West 57th Street sold in 2018 for $41 million, having traded for 148.5 million in 2013, making the current price per room a reasonable $170,000 (NYP, 1-/15/18).

New York City had 58.3 million visitors in 2017 but only has 115,369 hotel rooms....with average room rates being $273.00 (RD 2017 DB). A recent hotel development site at 145 West 47th Street sold for $713 a buildable square foot (4/17). A recent and smart hotel deal would be Sam Chang's 140 West 28th Street, which went for $230,000 a key (CO 1/10/18).  Hotel properties, which recently were selling at record prices ($2.04 million per key at the Baccarat, $1.4 million per key for the Mandarin Oriental hotel in the Time Warner Center ), should keep going down in price. The average price per key in 2016 was a crazy $500,9078. In December of 2016, the 618 room Stewart Hotel sold for $351,132 a room (CO 1/4/17). The Elysee, a four star property on East 54th Street off of Park Avenue, traded for $55 million, or $550,000 per room, in the winter of 2016 (REW 2/10/16). The most recent big sale was the Waldorf, in October of 2014, which traded for $1.9 billion, or $1.4 million per room...with every one of them needing major renovation.

No owner is going to make any money from most of these deals in the months and years to come. The Hilton Garden Inn in Chelsea traded in the summer of 2016 for $405,000 per room (REW 7/20/16). The 2015 sale of the Palace Hotel was for $885,588. per room...and the 563 key London Hotel sold for $382 million shortly thereafter, or $678,000 per room. In October 2012, the sale of the 665 room Manhattan Hotel (formerly the Sheraton Manhattan), was for $275 million, or $413,533 a room. In August of 2012, the Essex House on Central Park South sold for $375 million, or $736,738 a key--in 2005 the same property had sold for $423 million, which means that a $48 million loss was taken. The 775 room Helmsley Hotel on 42nd Street sold in April of 2011 for $570 million, or $735,483 a key. The more modest Holiday Inn Express at 15 West 45th Street also sold in March of 2011, for $354,000 a key. The Royalton and Morgan Hotels traded for $496,453 a key.

In October 2012, the Setai Fifth Avenue was sold for $229 million, or $1.070 million per room--again, way too much. Finally, the Milford Plaza was reported in April 2013 to have sold for $325 million, or $250,000 per room, which is a hotel sale that should actually make some money for its new buyers. At the close of 2013, The Park Lane, which is arguably in the best hotel location in the city, sold for $660 million, or $1.090 per key (income was said to be $20 million a year there for the not a great return, but a better price than the over one billion dollars that the estate had wanted several years ago. The 300 room Standard, which traded in February , 2014 for $400 million, or $1.333 million per room...

Manhattan Top Development Sites

The Manhattan Top Manhattan Development Sites
1: 432 Park Avenue is just about finished, except for the vacant street level and basement retail space. It is taller than the Empire State Building, at 1,380 square feet. Number 2 is just across the street, at 425 Park Avenue (56th Street), which is being redeveloped into a 600,000 square foot office building, and its owners have already claimed to have gotten $275 / $300 a square foot for office space..... 3: 3 Greenwich Street AKA 3 World Trade Center should be complete by 2018. 4: The $15 billion Hudson Yards project had its first opening at Ten Hudson Yards, known by some as The Coach Building, which was completed in June of 2016. The balance of the project will be mixed-use, with office and hotels proposed. 30 Hudson Yards will be the site's tallest, coming in at 1,296 feet high. 5: Twenty Times Square, a 1.3 million square foot office tower, on the 42nd Street Port Authority Bus Terminal, has seen no progress. It seems to be mothballed in search of a tenant. 6: 15 Penn Plaza, a 2.8 million square foot office tower, is proposed for the site of the currently operating Pennsylvania Hotel. 7: 740 Eighth Avenue will be a 900,000 square foot office building / possibly hotel and is still in the planning stages...8: The 1,514 foot tall One Vanderbilt is on the way to being New York's third tallest tower. 9: 217 West 57th Street will be 1,550 feet high and will have a Nordstrom's at its base. 10: Watch for 111 West 57th Street and 220 Central Park South and 225 West 57th (1,550 feet high), which will be mega-tall residential towers... 

Longstreet & Associates Inc Licensed Real Estate Brokers and Consultants Equal housing / office and retail space for all 59 East 54th Street, Suite 64, New York, NY 10022 212-980-6285