NYC Commercial-Property Sales Fall 54%, Crush Tax Receipts

(Bloomberg) -- Commercial real estate deals in New York City have taken a major hit as the pandemic continues to roil the local economy.

Investment sales totaled $10.5 billion in the first half of 2020, down 54% from a year earlier and a record low since the Real Estate Board of New York began reporting the data in 2015.

“We continue to see the devastating and long-lasting impacts the pandemic has had on the health and stability of the New York economy,” James Whelan, the trade group’s president, said in a statement Friday. “Real estate is a fundamental driver of the city’s economy.”

City and state tax revenue from commercial-property sales dropped 58% from the first half of 2019 to $314 million, REBNY said.

The 465 rental apartment properties that sold in the first half traded at an average price of $17 million, a 50% decline from a year earlier, according to REBNY. Prices for office and hotel sales saw decreases of 28% and 37%, respectively, while retail pricing was flat.

The largest transaction this year was Amazon.com Inc.’s purchase in March of the historic Lord & Taylor building on Fifth Avenue for $978 million. Many deals have been frozen as the gap between what buyers are willing to pay and what sellers will accept has widened to a record.

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