This is definitely a horrible time to be a commercial real estate broker in NYC. In the first half of the year, there were only 3 transactions worth more than $30 million, which is 1/10th of the normal volume by this time. What’s more, valuations are down by half. Cap rates — essentially a building’s PE ratio — have gone from the 3 to the 7s, meaning the building is throwing off about 7% of its purchase price in income each year.
Ouch and ouch.
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