News
Wall Street And Office Condos
March 24, 2010
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| We also dropped by Stout for lunch with Bank of America Merrill Lynch and Time Equities for updates on the finance and office condo markets. Greer Advisors’ Allen Greer (with BoA’s Thomas Carley, Mario DiCerbo, Jeffrey Redeker, and Warren Krug) gave his three-year prediction: Borrowing rates will continue to rise, while more banks will fail, he says. Margins will rise and settle at 300 plus or minus 50 bps over 10-year Treasuries. Rent growth will lag CPI growth by 2-8%, while values will continue to fall 5-25% through ’12. Cap rates will rise 2-4% over the next two years, and we’ll see the highest declines in retail, followed by industrial, office, and lastly,apartments. We hope that made sense to you; we got distracted remembering BoA bought Merrill Lynch. Crazy times! |
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| Time Equities’ Michael Rudder (third from left, with colleagues David Feinberg, Nadja Galloway, Bob Kantor, Suzi Wilson, Jay Fehskens, Philip Brody, and Mike Heller) tells us his firm’s office condos have seen 25k SF in sales since December, with another 40k SF ready to close, ranging from $450 to $500 PSF. Why the uptick? The world’s not coming to an end (your brackets are another story), so the market has a sense of stability. Prices have dropped 35%, and there are financing opportunities for small businesses. (BoA works with Time Equities on financing for its portfolio.) It recently sold the 16th floor of 131 W. 33rd St. to a marketing firm for $3M, which boils down to a $40 PSF annually. In 10 years, since owners don't face natural rent hikes, it'll cost less than renting. |
