Superstorm Sandy’s Damage Extends to Office Sector Values
Superstorm Sandy not only damaged residences across the East Coast but also destroyed several office buildings — which is particularly being hard-felt across Manhattan, real estate executives said at the New York University Schack Institute of Real Estate Capital Markets in Real Estate conference. Thousands of downtown Manhattan workers have been unable to return to work after last week’s megastorm.
“I think there’s been value erosion downtown,” Howard Lutnick, chairman and CEO of Cantor Fitzgerald LPand BGC Partners Inc, said during the conference. “It had just started to come back. The concept now of fear of flooding is going to affect values.”
According to a real estate services company, Jones Lang LaSalle Inc., about one-third of the 101 million square feet of office space in Manhattan was closed, powered by generators, or had no heat due to the flooding caused by Sandy. The prolonged closures to these offices has likely taken a bite out of the property values, says Darcy Stacom, CBRE Group Incvice chairman.
“Will investors think about this when they look at buildings in hard-hit areas? Yes,” Stacom says.