The Reel

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A blog for breaking sales and neighborhood real estate news.

The New York City investment sales market over the past three or four weeks has been happily reminiscent of the market in 2007. This, folks, is the best market we have seen in five years.Cap rates are compressing sharply, values are up, bidding wars at or above the asking price are commonplace as buyers are climbing all over each other to purchase the relatively few properties that are available for sale.

I’m bringing these dynamics to your attention today because I think building owners are seeing a wonderful moment in time for potential sellers to take advantage of these market dynamics. This may come across as one of the most self-serving correspondences I’ve ever sent, but if you follow the points below I think you may agree with my conclusions.

Presently in the investment sales market there is a very sharp supply-demand imbalance, with demand greatly exceeding supply. On the supply side, there are relatively few properties on the market for sale, as many potential sellers have indicated that they are not interested in letting go because of a lack of alternative investments into which to deploy the proceeds from the sale. Meanwhile, we haven’t seen as many sellers as we anticipated to take advantage of this year’s capital gains tax rates, which are likely to increase next year.

Visit the Commercial Observer for Bob's full article