Integrated Real Estate Services Forecast 2001 Page 5
5
GDP Growth
2% - 2 - ½ %. This is primarily due to decreasing interest rates higher
fuel costs and a recovering economy.
30 Year bond
Interest Rates
5.30% - 5.85%
Mortgage
Interest Rates
7.15% - 7.65% for 30 year fixed rate
Both are anticipated to rise by 2%-3% during the course of the year.
In New York City it is expected that the condominium market could rise
by 3%-5% while the cooperative market could rise 10%-15%. This is
caused by the fact that the cooperative prices are extremely low when
compared to the other housing prices and thus the demand has shifted
to them. Additionally, the outer boroughs of Manhattan are also being
positively affected due to the continued increases of rents and housing
prices in Manhattan.
Office Rents
$38.50 to $50.25 per s/f effective rent Class "A" Manhattan with higher
rents probable in the new buildings with spikes for penthouse spaces,
$28.50 - $30.00 per s/f effective rent Class "A" on Long Island.
New office construction doesn't make economic sense unless rents are
greater than $30.00 per square foot. At the present time there are four
significant projects underway.
Overall office vacancy rates in both Nassau and Suffolk County are
expected to increase slightly. In Nassau is could rise to dip below 5.6%
while in Suffolk is could rise to 12.00%.
From an historical perspective the office markets in both New York City
and Long Island are about at the same point prior to going into the
recession. There is little speculative building. In New York City there
was a lot of space being taken by start up companies financed by
venture capitalists. Since venture capital money is typically short term
or about 2 years, what happens is these companies don't perform well
and the venture capital money is called. However, a lot of dot com
companies have failed. Should the international business influx continue
into New York City, this also will continue the economic picture
positively.
Industrial Rents
$4.75 - $6.00 Net in Brooklyn & Queens
$5.50 - $6.50 Net on Long Island
$9.75 - $11.25 Net on Long Island for new flex space
Retail Rents
$60.00 net + in the major malls on Long Island
