Average Prices Drop to Lowest Point in 5 years, Downtown Remains Hot for Office Condo Sales
The average price per square foot for office condominium sales dropped in the first half of 2012 to the lowest point in 5 years, while total square footage of office condos sold surpassed the five-year average, according to a new report from Rudder Property Group.
The average asking price for office condos was at $431-a-square-foot. Contributing to that decline is the fact that most of the city’s inventory of high price units (especially in submarkets like Chinatown) had mostly been sold, while the Downtown submarket saw a high-number of low-cost sales.
“Despite being the smallest submarket in terms of office condominium inventory, in the first half of the year, Downtown was the most active submarket with several large, low-priced sales,” said Michael Rudder, principal of The Rudder Property Group.
“However, the inventory of available office condos for sale is quickly being absorbed as the demand from buyers far outweighs the supply,” he added.
The total dollar value of sales in the first half of 2012 was a hair over $103 million. That figure was a $12.5 million drop from the second half of last year, according to the report.
The Midtown submarket, the largest office condo submarket in Manhattan, had 16 sales totaling 84,118 square feet. 11 of those sales were for properties that were smaller than 4,500 square feet, while the 5 other sales were for larger and cheaper units (like the sale of a 29,548 square foot condo to the Lebanese American University at 211 East 46th Street).
The Midtown South submarket had 11 office condo sales for a total of 67,764 square feet (at an average price of $438-a-square-foot). The Downtown submarket had 12 sales totaling 87,437 square feet (at an average price of $387-a-square-foot).
Overall, Mr. Rudder thought the the first half of 2012 was an encouraging one for office condo sales.
“The velocity of office condo sales in the first half of 2012 has been very strong. There were 240,000 square feet of sales, 31% higher than the five year average,” he added.