After the pandemic dramatically slowed commercial real estate deals across the U.S., the summer saw an uncharacteristically high uptick — but shifting dynamics cost New York City its top spot.
Most years, investment increases about 9 percent from the second quarter to the third. This year it soared 37 percent, Bloomberg reported, citing data from Real Capital Analytics.
The normally robust Manhattan real estate market has been hit particularly hard by the pandemic and dropped behind Dallas and Los Angeles in the third quarter.
All three remain far behind their investment volume of a year ago. The third-quarter totals for L.A. and Dallas were down 41 and 27 percent, respectively, while Manhattan’s was off a staggering 52 percent.
Real Capital attributes this largely to the rent-stabilization law passed in June 2019 and the collapse of the hotel industry during Covid.
Nationwide, apartment prices have risen and commercial property prices have fallen. Mortgage delinquencies have been on the rise for some time now, and although distressed property transactions comprised only 1 percent of third-quarter deals, Real Capital expects to see more.
[Bloomberg] — Raji Pandya
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