Lower Manhattan Commercial Property Values and Rents Damaged by Hurricane Sandy, Say Local Real Estate Executives in New Survey
(Marketwire Via Acquire Media NewsEdge) NEW YORK, NY -- (Marketwire) -- 01/23/13 --
As 2013 begins and many large office buildings in New York's Financial District struggle to come back online, city real estate executives express pessimism about the health, and even future, of the Lower Manhattan commercial real estate market.
That's according to a recent survey of more than 100 New York commercial property owners, brokers, managers, attorneys and other real estate executives by accounting firm Marks Paneth & Shron.
The majority of real estate executives (56%) say Hurricane Sandy has hurt commercial real estate property values in Lower Manhattan. In fact, one in five (20%) say commercial property values in Lower Manhattan have been "permanently lowered" because of damage from Hurricane Sandy and the aftermath, and another 36% concur that commercial property values will be lower at least in 2013 because of the storm. Only a quarter say there will be "no impact on commercial property values," according to the survey, MP&S's Gotham Commercial Real Estate Monitor.
Further, nearly half of the real estate executives (47%) say property owners in Lower Manhattan "will be forced to lower rates and offer incentives to retain existing tenants" because of Sandy and its damage. And an additional 19% say "many existing tenants will relocate as leases expire." Only 22% say Sandy will have no impact on commercial leasing in lower Manhattan.
"There's a strong view that Lower Manhattan's commercial real estate market is almost as damaged as some of the buildings there. Whether this presents an opportunity or significant liability for tenants and investors depends on your vantage point and time horizon. It's clearly not great news for owners right now," said William H. Jennings, Partner-in-Charge of the Real Estate Practice at Marks Paneth & Shron.
Notably, only 11% of real estate executives say the Financial District/World Trade Center/Battery Park City area is the next "hot" office area (as the Flatiron/Midtown South district is today). In contrast, nearly a quarter (24%) say the Garment Center/West 30s is the next hot district. Interestingly, 12% say Downtown Brooklyn is the next hot place.
When asked which major development project will have the most positive long-term impact on commercial property values in their respective neighborhoods, only 8% named the Freedom Tower (at the World Trade Center site), compared with 44% who named the Hudson Yards, 25% who named Long Island Railroad access to Grand Central Terminal and 24% who named the Second Avenue Subway.
The Gotham Commercial Real Estate Monitor from Marks Paneth & Shron represents the findings of a survey of over 100 top commercial real estate professionals in the New York City market. They included owners and managers of commercial property and commercial real estate brokers, agents, attorneys and accountants specializing in the sector. The research employed a dual-mode methodology of self-administered questionnaires completed either online or on paper by respondents. Interviews were completed between November 16, 2012, and January 4, 2013.
To receive a copy of the Winter 2013 Marks Paneth & Shron Gotham Real Estate Monitor and/or to speak with one of MP&S's real estate leaders who fielded the survey, please contact Katarina Wenk-Bodenmiller of Sommerfield Communications, Inc. at Katarina@sommerfield.com or 212-255-8386.
About Marks Paneth & Shron LLP
Marks Paneth & Shron LLP is an accounting firm with nearly 475 people, of whom approximately 60 are partners and principals. The firm provides businesses with a full range of auditing, accounting, tax, consulting, bankruptcy and restructuring services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit, professional and financial services, and energy clients. The firm has a strong track record supporting emerging growth companies, entrepreneurs, business owners and investors as they navigate the business life cycle.
The firm's subsidiary, Tailored Technologies, LLC, provides information technology consulting services. In addition, its membership in Morison International, a leading international association for independent business advisers, financial consulting and accounting firms, facilitates service delivery to clients throughout the United States and around the world. Marks Paneth & Shron LLP, whose origins date back to 1907, is the 32nd largest accounting firm in the nation and the 16th largest in the New York area. In addition, readers of the New York Law Journal rank MP&S as one of the area's top forensic accounting firms for the third year in a row.
Its headquarters are in Manhattan. Additional offices are in Westchester, Long Island and the Cayman Islands. For more information, please visit www.markspaneth.com.
Sommerfield Communications, Inc.
Source: Marks Paneth & Shron LLP
[ Back To Technology News's Homepage ]