SOURCE: Marks Paneth LLP

Marks Paneth LLP

July 07, 2015 10:30 ET

New York Property Execs Think Interest Rates Will Have Biggest Negative Impact on Commercial Property Values but Also Worry About System Shocks Like Weather Events and Chinese Recession, According to Marks Paneth Survey

Real Estate Execs Think Foreign Oligarchs Distort Condo Values, but Believe Most Foreign Crises Help the Commercial Market

NEW YORK, NY--(Marketwired - Jul 7, 2015) - Most New York real estate professionals believe an interest rate uptick would be the most damaging event for property values, but many also think that external system shocks, ranging from slow growth in China to a Superstorm Sandy-sized weather event could hurt.

Nearly three-quarters (74%) of executives say an interest rate increase would have the biggest negative effect on New York commercial property values. But more than half (57%) said the slowing Chinese economy would have a negative impact, and even more (62%) said a weather event like a repeat of Superstorm Sandy would have a negative impact. That's according to the Spring 2015 Gotham Commercial Real Estate Monitor, a survey from accounting firm Marks Paneth of more than 100 New York commercial property owners, brokers, agents, engineers, accountants and lawyers specializing in the commercial space.

The survey shows that a number of executives are thinking about the impact -- both positive and negative -- of distant events.

"Interest rates are always a concern, but professionals are also increasingly concerned about the impact of sudden shocks and distant events," said William H. Jennings, Partner-in-Charge of the Real Estate Group at Marks Paneth. "They understand how complex the New York real estate market has become, and the degree to which distant and unexpected events can have a major effect on values."

Execs Say Foreign Oligarchs Distort Condo Prices, but Global Crises Can Also Help the Market

In a related indication that they recognize the complexity of the market, the vast majority (84%) of executives say the proliferation of investments in Manhattan residential property by foreign oligarchs distorts the borough's residential market. But opinion is divided about the price levels at which the impact is taking place. While 41% say the distortion in values occurs at all levels, 43% believe that the effect is happening only at the highest levels.

Executives do not believe that international crises are always bad for New York real estate. In fact, most (57%) agreed that current international crises benefit the commercial property market. The reason is that money is flowing out of foreign economies into New York properties. Only 8% say international crises are hurting the New York property market. 

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, hospitality, media, entertainment, nonprofit and government services 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, Long Island, Westchester and the Cayman Islands. For more information, please visit www.markspaneth.com.

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