By Joseph Manasseri
Executive Managing Director, Asset Services, New York Tri-State Region
Recently I had the opportunity to sit down with the Journal for Property Management (article behind paywall) to discuss the property trends we are seeing as 2017 winds down, and what to expect for the coming year. While the article focused broadly on the national landscape, because New York is such a unique commercial real estate center it’s important to look at what’s happening here with a more singular focus.
Multifamily is garnering lots of attention these days, and for good reason. It’s a difficult market to predict, however, at least beyond the near-term, but we can expect a slowdown of permits and new construction in 2018, particularly with Class A buildings. Overall the multifamily market will remain strong, but it’s likely that Class A has been overbuilt, and so developers are pulling back.
Brooklyn and Long Island City have especially benefitted from the recent multifamily boon, and it seems that everywhere you turn there are cranes popping up. While we can expect this to slow down, how investors will react is a little more difficult to read. Institutional investors tend to be long-term holders, but at the mid-market level we could see an increase in activity, as investors here are looking for the right time to sell.
Unsurprisingly, one sector that continues to sizzle is industrial, and this will continue into 2018. The industrial market has been the hottest in commercial real estate for some time now, driven especially by a strong economy and the eCommerce boom. There are no signs of this market slowing down.
One cause for our optimism going into 2018 is the strong jobs growth that we have experienced, nationally and here in New York. Job growth means greater absorption. This is a good sign for owners, and while generally speaking the office market is a mixed bag right now, buildings with great amenities in areas with convenient access to public transportation will reap the benefits of this jobs growth.
As property managers, owners look to us to help them understand their investment criteria, and to maintain and expand their portfolios in a dynamic market, with compressing cap rates and rising interest rates. Here at Cushman & Wakefield, we currently manage nearly 100 million square feet for investor and owner occupier clients in the New York Tri-State Region, making us the top property manager in New York City. The opportunity to act as trusted advisers is one we take seriously, which has allowed us to develop long-lasting relationships with clients whom we have the privilege to serve.
Joe Manasseri leads the Asset Services group for Cushman & Wakefield in the New York Tri-State market. He is responsible for growing the portfolio, currently consisting of 70M+ SF of managed real estate across the region on behalf of corporate, institutional and private clients.