Real Estate Executive Survey: Manhattan Commercial Real Estate Is Overvalued Compared With PropertyAugust 13, 2013
Majority Believe Leasing Prices Aren’t Getting Back to Pre-Recession Levels Any Time Soon; Manhattan Property Values Dependent on Foreign Investment, According to Marks Paneth Survey of NY Commercial Property Executives
NEW YORK, NY--(Marketwired - August 13, 2013)
Office buildings and other commercial properties in Manhattan are overvalued, especially compared with commercial real estate in other major global cities, according to a survey of New York real estate executives by accounting firm Marks Paneth .
The majority of property executives surveyed (54%) put Manhattan commercial real estate values in the overvalued category. And only 28% said it’s fairly valued, according to the Summer 2013 Marks Paneth Gotham Commercial Real Estate Monitor,an anonymous survey of over 100 New York property executives conducted during June and July. Industry members have held to this view consistently: Approximately the same percentage of executives polled called Manhattan commercial real estate overvalued in the Winter 2013 Gotham Commercial Real Estate Monitor.
“The view that Manhattan commercial property is overvalued dovetails with perceptions about office leasing prices: Most real estate executives who participated do not believe they’re getting back to pre-recession levels very quickly. It could be that there’s an underlying feeling that foreign investors are inflating values in Manhattan,” said William H. Jennings, Partner-in-Charge of the Real Estate Practice at Marks Paneth.
Among the findings of the Marks Paneth Gotham Commercial Real Estate Monitorsummer survey:
- Only 15% of New York property executives surveyed think Manhattan office and other commercial leasing prices are returning to 2007 levels now, and only 12% believe they will do so in 2014. Thirty-two percent think it will happen in 2016, beyond 2016 or never.
- The vast majority of survey respondents – 82% – say foreign investment has influence on commercial property values in Manhattan, with 47% saying it has a great deal of influence.
“The idea that Manhattan real estate is as dependent on the global economy as the local economy is as true now as ever. The question is whether strength or weakness in the global economy makes values in Manhattan rise: The answer is probably, ‘It depends,’” Jennings said.
The Gotham Commercial Real Estate Monitor from Marks Paneth 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, commercial real estate brokers and agents, and attorneys and accountants specializing in this sector. The inaugural survey was completed in January 2013. The research employed self-administered questionnaires completed online by respondents. The list of professionals surveyed was compiled by Marks Paneth and Shron LLP, the research sponsor. In addition, a link to the survey site was included in an online trade publication. Interviews were completed during the period of May 6 to July 1, 2013.
To receive a copy of the Summer 2013 Marks Paneth Gotham Real Estate Monitor and/or to survey with one of the Marks Paneth 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 LLP
Marks Paneth LLP is an accounting firm with over 500 people, of whom nearly 65 are partners and principals. The firm provides public and private 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 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 Marks Paneth 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