ML-Implode News - Manhattan Luxury-Condo Glut Ends Developer Rush for Land Deals

Sales of parcels for development are plummeting as builders, seeing signs that a once-hot property market is cooling, offer prices that sellers won't agree to. Just 48 land deals were completed in the first half of 2016, compared with 79 in the year-earlier period and 73 in 2014, according to brokerage Ariel Property Advisors. That may be a sign of a broader real estate slowdown to come, since land is often a leading indicator for the rest of the market.
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Residential properties, typically the most profitable use of Manhattan plots, are the primary drivers of land values in New York, according to Jon Epstein, a principal at brokerage Avison Young. A year ago, the baseline assumption was that a condo project could generate $2,500 per square foot when completed, he said. Now, that number is closer to $2,100. Bids for development sites are coming in 20 percent below what sellers were getting at the peak, leading to a stalemate, he said.

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Manhattan Luxury-Condo Glut Ends Developer Rush for Land Deals