Top New York real estate executives are of the opinion that commercial property in the Big Apple is overvalued when compared with real estate in other major urban centres around the world, according to the results of a survey conducted by accounting firm Marks Paneth. A number of them have said they believe there is an asset bubble, due to current low interest rates.
The survey respondents were made up of 100 property owners, brokers, real estate agents, lawyers and accountants who specialize in this sector. Close to half (47 percent) of executives responded that they think commercial properties in New York are moderately overpriced when compared with properties located in other major cities worldwide. This figure represents a major upturn in sentiment compared to the results from June 2013 and a three-point uptick from results gathered from the survey conducted in January 2013.
The executives also responded that investing in New York commercial property is a savvy move for investors. Over half (54 percent) said that investing in Manhattan property was either definitely low risk (36 percent) or moderately low risk (18 percent). Only a small number (4 percent) thought it was a high-risk investment.
Brooklyn commercial property was considered lower risk than Manhattan commercial property. More than half of survey respondents (58 percent) placed Brooklyn in the low-risk category or moderately low risk categories.
As a whole the community is saying that New York commercial real estate is very expensive, and is probably overpriced, but is likely worth it if a buyer can afford it and the deal is structured carefully.
