SOURCE: Marks Paneth LLP

Marks Paneth LLP

May 20, 2015 10:20 ET

New York Property Execs Say Commercial Real Estate Values Are Peaking Now, According to Marks Paneth Survey

Owners Will Look to Cash Out by Selling Parts of Portfolios -- and/or Diversify Into Residential Development or Ownership

NEW YORK, NY--(Marketwired - May 20, 2015) - The majority of New York real estate executives say commercial property commercial values in the city are reaching the top of the roller coaster, according to a survey fielded by accounting firm Marks Paneth.

More than half (54%) of executives say commercial property values have ended their climb, and nearly a quarter (22%) say commercial property values will begin declining. That's according to the Spring 2015 Gotham Commercial Real Estate Monitor, a survey completed in March of more than 100 New York commercial property owners, brokers, agents, engineers, accountants and lawyers specializing in the commercial space.

In fact, 26% of executives say Manhattan commercial real estate is "highly overvalued," and nearly half (48%) say it is "moderately overvalued." (In January 2013, only 8% of executives said Manhattan commercial property was highly overvalued.)

"Since 2013, a lot of property executives have said commercial real estate in New York is overvalued compared with property in other major cities. But now the view has reached something of a tipping point: Most don't see values going any higher, at least in the current, long cycle. It will be interesting to see if this is the case -- and whether owners start trying to cash out," said William H. Jennings, Partner-in-Charge of the Real Estate Group at Marks Paneth.

Viewpoint of Property Execs: Sell Manhattan Commercial Property, Hold Property in Queens and the Bronx

Sixty-one percent of property executives say now is a good time for owners of Manhattan real estate looking to maximize profits to sell or some of their holdings in the borough. But 56% say hold commercial property in Queens because it could keep going up in value, and 55% say the same about the Bronx.

Commercial Real Estate Money May Migrate to Residential

A big majority -- 69% -- of real estate executives foresee New York commercial property owners diversifying into multi-family and condominium developments. In fact, nearly half -- 44% -- say this diversification into residential will happen at a relatively fast pace.

To receive a copy of the Spring 2015 Gotham Commercial Real Estate Monitor and/or to speak with a leader from Marks Paneth's Real Estate Group, please contact Katarina Wenk-Bodenmiller of Sommerfield Communications at (212) 255-8386 or katarina@sommerfield.com.

Methodology
This summary presents the key findings of the Spring 2015 Gotham Commercial Real Estate Monitor survey of commercial real estate professionals in the New York City market. The 107 professionals participating in the research include owners and managers of commercial property, commercial real estate brokers and agents, attorneys, accountants and other professionals specializing in the sector.

The research employed self-administered questionnaires completed online and on paper by respondents. The list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor, and by Michaels Opinion Research. Interviews were completed during the period of February 25th to March 31st, 2015.

About Marks Paneth
Marks Paneth LLP is an accounting firm with more than 550 people, including over 70 partners and principals. The firm provides public and private businesses with a full range of auditing, accounting, tax, consulting, trade remediation and valuation services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit and medical practice clients. The firm has a strong track record supporting emerging growth companies, entrepreneurs, business owners and investors as they navigate the business life cycle.

The firm's subsidiary, Tailored Technologies, LLC, provides information technology consulting services. In addition, its membership in Morison International, a leading international association for independent business advisers, financial consulting and accounting firms, facilitates service delivery to clients throughout the United States and around the world. Marks Paneth, whose origins date back to 1907, is the 35th largest accounting firm in the nation and the 9th largest in the mid-Atlantic region. In addition, readers of the New York Law Journal rank Marks Paneth as one of the area's top three forensic accounting firms for the fifth year in a row.

Its headquarters are in New York City. Additional offices are in Washington, DC, New Jersey, Westchester, Long Island and the Cayman Islands. For more information, please visit www.markspaneth.com.

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