Medium Cool: Investment Sales Volume Spiked in 2011, but Future's Still Cloudy
February 29, 2012
By: Carl Gaines
A self-described car guy, Woody Heller, executive managing director and head of the Capital Transactions Group at Studley, sees parallels between automobiles as hard assets and commercial real estate investment sales velocity in New York. Apart from the obvious luxury to be found in cars and Class A buildings alike—his 33-million-square-foot transaction volume likely doesn’t include a jalopy—both markets have also lately been bolstered by similar factors.
“With debt available and with interest rates so incredibly low, it encourages one to buy because money is so cheap,” he said. “If the asset class is in favor compared with what much of the alternatives are—if borrowing costs are incredibly low—it continues to steer people to want to invest in hard assets like real estate.” ...
... Another barometer for investment sales velocity is leasing vacancy rates. Mr. Heller, at Studley, pointed to 200 Fifth Avenue, the old International Toy Center, where in 2010 the firm represented Tiffany & Co. in its 345,000-square-foot headquarters relocation. “The most recent rent paid was $85 a foot for a prewar building in Midtown South,” he said, “which had been a somewhat sleepy market for decades.” Drastically declining vacancy rates had changed all that. ...
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