Rudder property groupa commercial real estate services company specializing exclusively in the sale of office condominiums in New York City, has released its semi-annual report on office condominiums for the second half of 2021.
The full report, which analyzes the Manhattan office condominium market, provides an overview of sales by volume in dollars and square meters; number of sales; and availability. The report also offers valuable insights into Manhattan’s three office condominium submarkets, as well as notable sales over the past six months. Key findings of the report include:
Sales velocity has returned to pre-pandemic levels: Buyers continue to reappear, driving the highest number of transactions since the start of COVID-19. The second half of 2021 saw a significant increase in sales velocity, with a 127% increase in sales since the first half of 2021 (34 sales in Q3 and Q4 compared to 15 sales in Q1 and Q2). The number of office condominiums sold in the second half of 2021 was above the five-year average of 12 sales.
Sales of office condominiums totaled $179,224,746, 90% higher than the $94,521,942 in sales for the first half of 2021. The dollar value of sales was 27% above the five-year average of 141,646,103 $.
Prices continue to advance towards peak levels: Due to increased sales velocity, office condominium sales averaged $723 per square foot in the second half of 2021, a 19% increase from the first half of 2021, which was in average at $608 per square foot. Prices remain 25% below the market peak of $934 per square foot in the first half of 2018.
The emergence of conversions: Due to the current soft rental market, opportunistic building owners are increasingly pursuing the office-to-condominium conversion strategy, including 32 West 39th Street in Midtown, which will soon hit the market after filing a plan offer to the Attorney General.
32 West 39th Street is a 16-story, 87,072-square-foot office building located one block south of Bryant Park and adjacent to Amazon’s new headquarters on Fifth Avenue. The building is located between Grand Central Terminal and the Penn District. R&B Realty Group is converting the building in response to exceptional market demand and the scarcity of full-floor units and multi-story office condos in Midtown. Prices are expected to start at $4,200,000 for a 3,970 square foot, full floor unit.
“While many buyers have been on the sidelines for the past two years, they have returned to the market in the second half of the current year, taking advantage of historically lower prices and interest rates. low,” said Michael Rudder, director of Rudder Property. Group. “As demand remains high at the start of 2022, we expect prices to continue to rise. The addition of new office-to-office conversions will provide buyers with some additional options to consider, although we expect that these properties sell for a premium.
The Manhattan office condominium market is made up of 103 buildings representing a total of 11.2 million square feet. The Midtown submarket is comprised of 6.1 million square feet; Midtown South comprises 3 million square feet; and downtown comprises 2.1 million square feet. There are 3.4 million square feet of Class A office condominiums, 5.5 million square feet of Class B and 2.3 million square feet of Class C.
To download Rudder Property Group’s 2021 First Half Office Condominium Sales Report, please visit: https://rudderpg.com/the-rpg-office-condominium-report/
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