NYC Market Update: Prices Surged in 2021

In 2021, office sales in Manhattan totaled $6.95 billion, according to CommercialEdge data. Transaction volume was up nearly 32 percent since the end of 2020, when it reached $5.26 billion, but was still behind pre-pandemic levels—in 2019, deals reached a combined $9.9 billion.

Since the onset of the global health crisis, the annual average price per square foot increased significantly, from $845 per square foot in 2020 to $1,253 per square foot in 2021. Among gateway cities, Manhattan registered the biggest price jump, compared to 2020 levels.

In Brooklyn, office transaction volume last year added up to $189 million, a large decrease from 2020’s $445 million. Deals averaged $661 per square foot, up from $399 per square foot during the previous year. The borough’s most significant sale was Brookfield Properties’ disposition of Twelve MetroTech Center, a 30-story condominium office property in downtown Brooklyn. A partnership of 60 Guilders and a hedge fund paid $128 million for the Class A asset.

Largest Manhattan deals

As late as September, office transaction volume was down to one-third of 2019’s volume and half of 2020 levels. However, a single deal that closed in late December was a game-changer for the year’s final total.

CommonWealth Partners closed the biggest buy of 2021 with the purchase of Hudson Commons, a 25-story tower at the intersection of Hudson Yards and Manhattan West. Former owners Cove Property Group and The Baupost Group pocketed $1.03 billion for the property, acquired by the duo in 2016 for $330 million.

Back in August, the sale of the CBS Building also made a splash, animating a market that has been struggling with pandemic-induced headwinds. Harbor Group International struck a deal with ViacomCBS for the purchase of 51 West 52nd St., marking the first-ever sale of the iconic Plaza District tower nicknamed Black Rock. The 817,095-square-foot building changed hands for $760 million.

In a notable February 2021 transaction, a fund managed by Brookfield Asset Management agreed to purchase a stake in SL Green Realty Corp.’s Tower 46. The buyer picked up a 25 percent interest in the asset, consisting of the commercial condominium portion of the Diamond District property.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.