||Commercial real estate (NYC) is a preferred market for investors. Due to the recent economic downturn, analysts had predicted the collapse of U.S. commercial real estate. Yet this sector is on the rise rather than headed for a fall.
Recently, however, a Federal Reserve official informed a congressional committee that the market had been near bottom. Indeed, there had been far worse predictions for U.S. commercial real estate. Analysts believed that the market would fall, bring the economy back towards a recession, and create a crisis in the banks.
Across the country, commercial real estate shows overall improvement. Obviously, the sector would not have been expected to thrive in a recession. Yet the commercial category stays in business. The sector has no place to move only upward in the aftermath of economic turmoil. Better performance and higher profits can be expected in this market especially in dynamic centers such as New York City.
In 2010, market fundamentals stabilized and the sector took an important step towards recovery. Signs of stabilization were the result of more demand for commercial space. The popularity of Manhattan properties among buyers and investors points to the promise of Commercial Real Estate NYC.
Office Buildings in New York City
Office real estate in New York City provides excellent opportunities for buyers and investors. Although NYC was not as affected by the economic downturn as the rest of the US, every area of the country felt the recession to a certain degree. Since New York City businesses have national and international connections, its commercial real estate had to deal with the effects of economic strife elsewhere. Of course, New York City is a historically-sound market that survives and thrives despite of adversity.
Opportunities in New York City
During this period of economic recovery, the real estate industry puts its best effort into attracting buyers to NYC offices. The industry is willing to make concessions to match up owners with profitable Manhattan properties. 'Office Buildings For Sale' In New York City is a buyer's market – and a good deal for sellers.
Today is the perfect time to offer that office building for sale in Manhattan. Domain Properties, experts in New York City real estate, have gained recognition for their expertise in working with buyers and sellers of commercial NYC real estate. The Domain Properties Commercial Real Estate NYC team offers discreet and confidential 'person-to-person' dealings with clients about Manhattan properties.
In a 2010 survey by the Society of Industrial and Office Realtors, 57% of the participating 600 market experts predicted improvements in the office and industrial sectors throughout the year. Vacancy rates in office space started to level off in 2010 and should improve dramatically by the end of this year. Even during 2010, New York City (as well as Long Island, N.Y., and Honolulu) showed low vacancy rates in the office sector.
In fact, New York City demonstrated one of the lowest vacancy rates. Entrepreneurs recognize the power of being in business in a global center like New York City. Honolulu and NYC had office vacancy rates close to 9% while other office markets recorded rates over ten percent.
No Shortage of Tenants
At present, NYC office space looks attractive to tenants - especially with offers of lower rent. The cost of rent for office space was expected to fall 2.7% during 2010 and an additional 2.1% in 2011. In 2010, The National Association of Realtors (NAR) suggested that the vacancy rate for office space should show a slight rise at 16.7% towards the end of the year.
The vacancy rate, however, is expected to decline slowly and reach 16.4% in the last quarter of 2011. More tenants will be searching for Manhattan properties. The renewed interest is an encouraging sign for existing office spaces as well as new developments. Obviously, upscale office buildings have higher rents and attract powerful investors, prestigious tenants, and affluent clients.
Google Buys New York City Office Building
The December 2010 sale of 111 Eighth Avenue to Google, Inc. for $1.8 billion was the biggest office building sale of the year in terms of price. The sellers were Taconic Investment Partners, Jamestown and New York State Common Retirement Fund. Once the headquarters of the Port Authority of New York and New Jersey, the 2.9 million sq ft building is now owned by Google. The corporation will occupy 500,000 sq ft as the largest tenant.
NYC Commercial Properties – Building Class Definitions
Although commercial real estate NYC is a winning investment, not all buildings are created equal in the Big Apple. NYC office buildings (like office buildings across the US) are classified as Class A+, Class A, Class B, and Class C. Keep in mind that a Class A building in a small town might not have the same characteristics as a NYC Class A property.
Definitions of building class vary according to markets. Buildings are classified relative to other properties in their market. Commercial real estate agents, as well as owners and managers, organize office space into "classes." The groups use various factors to define the different office environments.
Class definition is not a 'definitive' science and has no formal or international standard. The classifications refer to certain specifics. Class B and Class C classifications within a market will depend on the characteristics of the Class A buildings. A commercial real estate practitioner will determine the Class A buildings (based on prime location, full-service amenities, and other guidelines) and proceed to label other buildings relative to those results.
Generally, the Building Owners and Managers Association International (BOMA) is opposed to publishing the classification rating for individual properties. If potential tenants understand the basics of the classification process, this information could give them more insight into a building. If tenants think, however, that Class A in a rural community means the same thing as Class A in Midtown Manhattan, BOMA would be justified in their objection. In that instance, the tenant would not have the proper information and could not make an informed decision.
The purpose of the rating system is to encourage standardization of discussion about office markets (including individual buildings) and to encourage the reporting of office market conditions in the different classes. Yet BOMA insists vehemently that the organization does not agree with publication about individual buildings. The metropolitan ba