Much like current temperatures, the Manhattan office investment market was red hot through the first two quarters of 2015. Total investment volume through the first six months of the year reached $13.9 billion, 54.4 percent higher than the $9 billion midyear total from 2014. The 2015 midyear total was only 22 percent off from the $19.4 billion total volume traded in 2014. In addition to total volume rising, the average price per square foot jumped 19.2 percent to $860.36 per square foot. Through midyear 2015, there were three transactions totaling $1 billion, compared to two at mid-2014 and equal to all of 2014’s total.
Midtown sales volume was up $5 billion to $9.7 billion transacted through midyear 2015. Although the sales volume skyrocketed, the average price per square foot is down 9.8 percent from mid-2014 to $989.03 per square foot. The sale of prime assets picked up in 2015 with 14 assets trading for greater than $1,000 per square foot compared to six through midyear 2014.
Midtown South was the only market to have a dip in sales volume in 2015. The drop was marginal, from $3.1 billion to $2.9 billion. The average price per square foot jumped 39.1 percent to $916.78
per square foot.
Downtown sales volume increased minimally from $1.2 billion through midyear 2014 to $1.3 billion in 2015. Average price per square foot rose only 1.8 percent through midyear 2015 to $384.73 per square foot. Downtown is still a value play for investors as demand increases around the World Trade Center and the future development of the South Street Seaport.
With at least an additional $7.1 billion in transactions expected to close by year-end, 2015 is well on its way to surpass 2014 totals and sales volume will likely exceed $21 billion.
Richard Perischetti is vice president of research & marketing at DTZ.