Rudder Property Group, a commercial real estate services firm exclusively specializing in the sale of office condominiums in New York City, has published its biannual office condominium report for the second half of 2021.
The comprehensive report, which analyzes the Manhattan office condo market, provides an overview of sales by dollar volume and square footage; number of sales; and availability. The report also offers valuable insights into Manhattan’s three office condominium submarkets, as well as notable sales from the past six months. Key findings from the report include:
Sales Velocity is Back to Pre-Pandemic Levels: Buyers continue to re-emerge, resulting in the highest number of transactions since the onset of COVID-19. The second half of 2021 saw a significant increase in sales velocity, with a 127 percent increase in sales since the first half of 2021 (34 sales in Q3 and Q4 vs. 15 sales during Q1 and Q2). The number of office condominiums sold in the second half of 2021 was higher than the five-year average by 12 sales.
Office condominium sales totaled $179,224,746, 90 percent more than the $94,521,942 in sales for the first half of 2021. The dollar value of sales was 27 percent more than the five-year average of $141,646,103.
Prices Continue to Inch Toward Peak Levels: Due to increased sales velocity, office condominium sales reached an average $723 per square foot in the second half of 2021, a 19 percent increase over the first half of 2021, which averaged $608 per square foot. Prices remain 25 percent below the market peak of $934 per square foot in the first half of 2018.
The Emergence of Conversions: As a result of the current soft leasing market, opportunistic building owners are increasingly pursuing the office condominium conversion strategy, including 32 West 39th Street in Midtown, which will soon come onto the market after filing an offering plan with 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 Fifth Avenue headquarters. The building is centrally located between Grand Central Terminal and the Penn District. R&B Realty Group is converting the building in response to exceptional market demand for, and scarcity of, full-floor units and multi-floor office condos within Midtown. Prices are expected to start at $4,200,000 for a 3,970-square-foot, full-floor unit.
“While many buyers remained on the sidelines over the past two years, they have returned to the market during the second half of the year in force, taking advantage of lower prices and historically low interest rates,” said Michael Rudder, principal of Rudder Property Group. “As demand remains high during the beginning of 2022, we expect to see prices continue to trend upwards. The addition of new, office-to-office-condo-conversions will give buyers a few more options to consider, though we expect these properties to sell at a premium.”
The Manhattan office condominium market is composed of 103 buildings comprising a total of 11.2 million square feet. The Midtown submarket is comprised of 6.1 million square feet; Midtown South is comprised of 3 million square feet; and Downtown is comprised of 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 First Half of 2021 Office Condominium Sales Report please visit: https://rudderpg.com/the-rpg-office-condominium-report/
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