With interest rates and recession fears rising, New York City office condominium sales volume has slowed, but prices are on the rebound, according to Rudder Property Group’s biannual office condominium report for the first half of 2022.
Rudder, which specializes exclusively in the sale of New York office condos provided an overview of sales by dollar volume and square footage; number of sales and availability. The 116,591 square feet sold in the first half is 53% less than the 247,964 square feet sold in the second half of 2021 and 33% lower than the five-year average of 173,825 square feet sold. For the first time in over a decade there were no office condominium sales in the Downtown submarket in the first half of 2022.
Prices continue to increase, reaching an average $773 per square foot in the first half of 2022. This pricing is a 7% increase over the second half of 2021 but still 4% below the five-year average of $807 per square foot. Interest rate hikes have increased the annual office condominium ownership costs from $55 per square foot to $60 per square foot. Office condominium sales totaled $90.1 million, which is 50% less than the $179.2 in sales for the second half of 2021. The dollar value of sales is 36% less than the five-year average of $140.3 million.
“The combination of interest rate hikes, recession fears and inflation has caused the overall real estate market to take a pause, including Manhattan office condominiums. When the economy settles into a more stable state, we expect that businesses and organizations will recognize the long-term benefits of office ownership and will have new ownership opportunities like the office condominiums at 65 West 55th Street,” said Michael Rudder, principal of Rudder Property Group.
