The RPG Office Condominium Report
Market Overview
The Manhattan office condominium market comprises 99 buildings totaling approximately 10.9 million square feet. Midtown accounts for 6 million sqft, Midtown South 2.8 million sqft, and Downtown 2.1 million sqft. By class, Class A represents 3.4 million sqft, Class B 5.4 million sqft, and Class C 2.1 million sqft.
In H2 2016, a record-high 359,082 square feet traded across 46 sales in 25 buildings for a total of $304,040,259, at an average price of $847 per square foot and an average unit size of 7,806 sqft. Square footage reached a record high, compared to just 113,147 sqft in H1 2016, and was considerably higher than the 5-year average of 236,135 sqft. Dollar value of $304,040,259 was more than triple H1 2016 ($93,205,380) and nearly double the 5-year average of $153,991,585. The average price of $847/sqft was 3% higher than $824 in H1 2016 and significantly above the 5-year average of $655. The 46 sales were 31 more than H1 2016 and 9 more than the 5-year average.
By submarket: Midtown dominated with 34 sales totaling 242,627 sqft for $214,248,259 at $883/sqft average. Midtown South had 7 sales totaling 37,179 sqft for $34,250,000 at $921/sqft. Downtown had 5 sales totaling 79,276 sqft for $55,542,000 at $701/sqft.
In the second half of 2016, there were 364,406 square feet of office condominium sales in Manhattan totaling $309,865,488. There were 49 office condominium sales, averaging 7,437 square feet per sale, at an average of $850 per square foot.
Market Overview (continued)
Square Footage of Sales: The 364,406 square feet sold in the second half of 2016 is 219% higher than the 114,255 square feet sold in the first half of 2016 and 49% higher than the five-year average of 244,422 square feet sold. Out of the 49 sales, the smallest sale was 192 square feet and the largest sale was 71,960 square feet.
Dollar Value of Sales: In the second half of 2016, office condominium sales totaled $309,865,488 which is 230% more than the $93,817,292 in sales for the first half of 2016. The dollar value of sales is 96% more than the five-year average of $158,073,815.
Average Price Per Square Foot: In the second half of 2016, the average price per square foot was $850. This is 4% higher than the first half of 2016 average of $821 per square foot and 31% higher than the five-year average of $647 per square foot.
Number of Sales: There were 49 sales in the second half of 2016, up 34 sales from the first half of 2016. The number of office condominiums sold in the second half of 2016 was 10 more than the five-year average of 39 sales.
Submarket Statistics
The Midtown submarket: In the second half of 2016, there were 35 sales totaling 243,273 square feet. The dollar value of these sales totaled $215,002,362, averaging $884 per square foot.
The Midtown South submarket: In the second half of 2016, there were 7 sales totaling 45,602 square feet. The dollar value of these sales totaled $38,500,000, averaging $844 per square foot.
The Downtown submarket: In the second half of 2016, there were 6 sales totaling 71,331 square feet. The dollar value of these sales totaled $50,613,126, averaging $710 per square foot.
Notable Office Condominium Sales
New Office Condominium Conversions
By Rudder Property Group
Six buildings have recently been converted to office condominiums, bringing 806,222 square feet of new supply across 163 units to the Manhattan market, with an average asking price of $1,133 per square foot.
1. 866 U.N. Plaza — 416,609 sqft, Class A, 93 units, asking $1,142/sqft, average unit size 4,480 sqft. The largest of the new conversions, this building represents a significant addition of Class A inventory near the United Nations.
2. 345 East 37th Street — 105,640 sqft, Class A, 32 units, asking $994/sqft, average unit size 3,301 sqft.
3. 24 West 40th Street — 82,394 sqft, Class B, 16 units, asking $1,600/sqft, average unit size 5,150 sqft. The highest asking price among the new conversions.
4. 18 West 33rd Street — 14,055 sqft, Class B, 5 units, asking $1,000/sqft, average unit size 2,811 sqft.
5. 20 West 33rd Street — 159,813 sqft, Class B, 11 units, asking $983/sqft, average unit size 14,528 sqft. Notable for its exceptionally large average unit size.
6. 77 Bowery — 27,711 sqft, Class B, 6 units, asking $1,067/sqft, average unit size 4,619 sqft.
These conversions represent a growing trend of developers recognizing the demand for office ownership in Manhattan and converting traditional rental office buildings into condominium offerings.
Rudder Property Group
Rudder Property Group is a commercial real estate services firm that specializes exclusively in the sale of office condominiums in the New York metropolitan area. With 20 years of experience in this niche market, Rudder Property Group has sold over two million square feet of office condominiums with a dollar value in excess of $1 billion. In the small, highly specialized field of office condominium sales, Rudder Property Group is the market leader.
©2016 Rudder Property Group. All rights reserved. All material presented herein is intended for informational purposes only. While this information is believed to be accurate, it is represented subject to errors, omissions, changes or withdrawal without notice. All square footages are approximate and based on rentable square footages with standard Manhattan loss factors. For the purposes of this report, the definition of an office condominium is a building with more than two unit owners that has been constructed or converted to a condominium or cooperative for commercial use only. This report only includes properties in Manhattan below 96th Street.
