Most New York real estate executives believe that commercial properties in Manhattan are overvalued compared with real estate values in other major global cities, according to a new survey by accounting firm Marks Paneth & Shron LLP (MP&S).
In the MP&S survey, 51% of commercial property executives said Manhattan's commercial real estate values were overvalued, while 32% thought the market was ‘fairly valued.’ Thirty-one percent of executives surveyed said there was a high or moderately high risk associated with investing in commercial real estate in Manhattan.
Furthermore, nearly two-thirds of executives forecast that commercial occupancy rates in Manhattan will remain below 2007 levels well into 2014, perhaps even past 2016. And 56% of executives believed the global economy will need to recover before commercial real estate sales in Manhattan escalate.
However, the executives surveyed were highly supportive of New York Mayor Michael Bloomberg, with 33% saying the mayor has done an ‘excellent’ job and 43% saying he's done a ‘good’ job supporting commercial property interests.
‘Manhattan commercial real estate may still be something of a gold standard, but property executives clearly believe it has seen better days,’ says William H. Jennings, partner-in-charge of MP&S' Real Estate Group.
The survey polled over 100 top commercial property owners, brokers, agents, managers and other real estate professionals between Nov. 16, 2012, and Jan. 4, 2013.