The Full Nelson

2011 Top Ten NYC Highlights

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1) The NYC property sales approach normalized 2006 levels with $25B in anticipated sales, which is three times 2009, but still off 2007's peak of $62B. 3Q11 proved to be the busiest quarter forManhattansales since 1Q08 with a total of 190 properties changing hands.

2) Despite the CMBS pullback, $100M sales return to the headlines. There have been 47 to date, which is the most since 2007. Life companies have helped fill the void providing a record $15.7B in 2Q11.

3) The ten year treasury and Libor reached historical lows. Multifamily rates have dropped to sub 4% for five year money.

4) New domestic buyers such as UDR and CIM have fueled demand for NYC real estate. UDR alone acquired close to $1.5B, which made up 7% of the total sales in 1Q11-3Q11. They join foreign buyers from around the world (our website tracks from 131 different countries) and first time buyers who are looking for hard assets in our stable real estate market due in part to all the stock market uncertainty.

5) Supply and demand has propped up pricing. MKRS's listing inventory was at 748 in 3Q08 and is only at 520 today.

6) NYC survived the downturn as overdevelopment did not happen this last cycle. Only one speculative office building was built in 2009. Meanwhile, only 1,903 new NYC condo units were filled with the AG's office this year as compared to 23,879 in 2006. We might actually be facing a shortage of new condo units.

7) The hotel and retail sector has soared as NYC will record a record year for tourism with 50 million plus visitors accounting for $47B in revenue. We have gone from 72,625 hotel rooms in 2006 to 90,000 today—a 24% increase in five years. The occupancy rate today is 70.2. Meanwhile, retail rents have broken $2,000/SF onFifth Avenueand risen dramatically on Madison Avenue andSoHo.

8) Manhattanresidential vacancy has dropped to .93% with some rents achieving over $125/SF. Meanwhile, condos are now selling on average at $1,233/SF (3Q11) compared to $1,182/SF in the same quarter in 2010.

9) Class A Office vacancy has dropped 100 BPS in 2011 to 10.4%. Triple digit rents are being achieved once again. Coach and Conde Nast have bolstered Hudson Yards and Downtown.

10) Distressed assets have all but disappeared from our landscape. Fewer and fewer loan sales have occurred as most have been sold or recapped. “Pretend and Extend” may one day disappear from our vocabulary.

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