When it comes to luxury shopping in Manhattan, the ultra-rich are bypassing Tiffany’s and Bloomingdale’s and buying up office properties.
According to a Bloomberg report analyzing data from Savills, seven of the 11 New York office property acquisitions completed in the second half of 2022 involved wealthy individuals, family-run companies or smaller developers. In comparison, nearly all of the buyers in the first half of 2022 were institutional firms or larger real estate companies, the traditional buyers for Manhattan’s mighty skyscrapers.
More transactions involving these newcomers to the Manhattan office property market are expected as the cash-strapped owners of these buildings – many of which are still semi-vacant despite the evaporation of the Covid crisis – are trying to sell them off at a discount.
“You start to get buy-in from people who aren’t mired with the vagaries of the local market, and are just saying ‘Wow, New York is cheap right now, I’ll buy,’” said Will Silverman, a managing director at brokerage Eastdil Secured, in a Bloomberg interview. “They don’t have to rationalize anything to an investment committee. They just have to be convinced that it’s the smart thing to do.”
“Whenever you have a downturn you see a lot of the big institutional players on the sidelines for a while, keeping their powder dry until a torrent of opportunities come where they can get a good deal,” added Marisha Clinton, senior director of Northeast regional research at Savills. “One person’s trash is another person’s treasure.”
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