As values of New York commercial real estate continue to rise, many building owners are putting their properties on the market early, often scrapping plans to redevelop the building or sign up new tenants. In some cases owners who purchased a property less than a year ago are looking for buyers.
Global investors are pushing demand for New York real estate to new highs. With the flood of investor capital coming into the market, owners are deciding to take their profits now rather than proceed with redevelopment plans.
In one case a development company purchased two older buildings in midtown in 2011 and tore them down in order to build a new office tower. In June of this year, the developer sold the vacant lot on Fifth Avenue for about twice what it paid for it.
Another example of the early selling trend is the Brill Building, which was sold in August for $295 million. After renovating the property the sellers called off plans to seek new tenants and instead decided to sell the vacant building.
Buying and selling commercial property in New York takes skillful negotiation and a thorough attention to detail. Buyers must know what to look for in the due diligence process. They must identify any potential title issues and prepare the necessary financing documents. Sellers must be careful to gather all the necessary paperwork before marketing the property, including all tenant leases, appraisals and relevant permits. Buyers and sellers need solid advice as to any state and local laws that could affect the transaction. A buyer or seller can benefit significantly from working with a law firm that is well-versed in complex real estate transactions.
Source: Bloomberg.com, "Manhattan's Property Boom Pushes Landlords to Sell Early," Sarah Mulholland, Aug. 20, 2015