New York City is among the most expensive cities in the world where commercial and residential real estate markets contribute to the higher cost of living. However, recently, an office tower in New York's upmarket Manhattan was sold at a 70 per cent discount, leaving many shocked. Industrialist Uday Kotak also expressed surprise over the massive rate cut for the Manhattan property.
As per a post by Nilesh Shah, Managing director of Kotak Mutual Fund, the building was last sold for $150 million against its previously sold cost of $500 million. "A Manhattan office tower just sold at a shocking 70% discount to what it last sold for. The 778k sq ft tower at 222 Broadway sold for $150M. The building last sold for $500M back in 2014. Even NYC is seeing massive distress and destruction in values for prime commercial real estate office buildings," said a post shared by Mr Shah.
"New York commercial office building going at ₹~ 16000 per Sq Ft," he remarked in response to the tweet. Uday Kotak quote-tweeted his post and said that at ₹16,000 per sq ft, the price of the said New York property is less than half the rate at Mumbai's upmarket Bandra Kurla.
"Wow, Nilesh! That's less than half the rate at Mumbai's BKC," Mr Kotak wrote.
See the tweet here:
Reacting to the post, one user said, ''That's less than half the rate at Borivali sir. Residential property in Borivali is at 28000-29000 psft.''
Another commented, ''Ya, in a few years, Mumbai realty rates would be quoted around the world as one of the most expensive and exclusive.''
A third said, ''Work from home and online commerce has totally changed the dynamics of workplace real estate in the US.'' A fourth added, ''It shows India's real estate price is costlier than the developed country. The premium may be erased in the upcoming decade.''
Notably, Mumbai is a major economic centre in India and attracts many people for work and business, leading to a high demand for housing. According to Knight Frank, Mumbai is in 4th position among 46 cities globally in terms of price rise of luxury residential properties.
Real estate prices across 13 Indian cities have also reportedly seen a whopping 18.8 per cent jump on a year-on-year basis and 3.97 per cent on a quarter-on-quarter basis in the October-December 2023 quarter.
