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2012 closed out strong as the prospect of a fiscal cliff drove investors into the marketplace with a rash of deals in 4Q that made up nearly half of all sales in New York City last year. "Last year's final three months saw the heaviest fourth-quarter activity in at least 25 years," according to Jonathan Miller, president of Miller Samuel Inc. Sellers rushed to close deals in 2012, anticipating higher capital gains tax rates in the new year.
According to most experts in the industry, 2013 will bring further recovery and a stronger economic and regulatory climate. Some factors that will affect the market in 2013 will be rising prices as a result of increasing demand and urgency to own, fewer foreclosures, credit remaining relatively tight, housing inventory hitting lows and of course job growth.
"There is likely to be less inventory on the market in 2013 but the availability of capital will stay strong according to Woody Heller, Executive Managing Director of Studley. He says interest rates aren't likely to rise and there is a limited supply of new office buildings so demand should remain high. Steven Spinola, President of REBNY, also agrees. He says that in addition to investment capital becoming more available and demand for new office buildings remaining high, "the prognosis for commercial real estate in New York City is encouraging." He adds that "the vacancy rate is relatively high but once Washington has settled its fiscal disagreements, they'll be more confidence and businesses will take more space."
At Royal Abstract, we look forward to further economic recovery and a year filled with many exciting new projects that will impact the future landscape of New York City.
Hot Topics for 2013
New York City has been undergoing major redevelopment over the last decade. A new generation of city-building projects will be coming on
line in the next several years. Projects such as the World Trade
Center, Atlantic Yards and Hudson Yards will reshape entire
districts, just as Battery Park City, Times Square and Columbus
Circle did in previous decades.
Midtown East Rezoning
The rezoning of Midtown East put forth by New York City's Department of Planning should be finalized in the next few months. The 78 blocks bounded by Fifth and Second Avenues and 39th to 57th street will be a crucial area for commercial growth over the next 50 years. With some buildings approaching 70 years old or more, time has come to restructure and rebuild in order to keep New York City competitive for office space and to remain the gateway to the world's capital city.
Steven Spinola, President of REBNY, says it is critical to the future viability of Manhattan that Midtown East is not left behind at a time when Downtown and the West Side are undergoing dramatic renovations and upgrades.
According to Mary Ann Tighe, CEO of the New York Tri-State Region of CBRE Group, "there won't be wholesale redevelopment but, over time, the rezoning will generate 21st century structures sprinkled here and there."
Hudson Yards Breaks Ground
Work has already begun on the first of many skyscrapers at the northeast corner of West 30th street and 10th Avenue that will eventually be anchored by Coach. Related Companies will begin work on the second portion of the Hudson Yards this year. Hudson Yards - which will span from 30th to 42nd streets, between Eighth Avenue to the Hudson River - is expected to create roughly 25 million square feet of office space, 3,200 hotel rooms and 20,000 residential units, a quarter of which have already begun construction. The MTA also plans to extend the 7 subway train west to Tenth Avenue at 41st street and south to 34th street and Eleventh Avenue. When completed, nearly all points in Hudson Yards will be within a ten minute walk to a subway station.
Click here for a breakdown of the Hudson Yards Development
1 World Trade Center Rises
The first section of the 408-foot spire that will raise the height of the iconic One World Trade Center to 1,776 feet was installed on January 15th. Installation of all 18 pieces of the spire and three communication rings will take place in two to three months. This tower will then become the tallest building in the western hemisphere.
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