| An interesting phenomenon has developed in New York's property market, which operates differently than the rest of the world. Residential prices remain in the stratosphere, while office prices are still down to Earth. As detailed by RXR Realty chief executive Scott Rechler on CNBC today, residential real estate is selling for anywhere from $4,000 to $6,000 a square foot, four times the price of office space in the city.
That's a huge arbitrage spread and helps explain why developers are bypassing office projects, despite what he calls pent up demand. Even with new developments, the inventory of office space in New York is basically unchanged from 20 years ago, and the average age of the buildings is 50 years old, Mr. Rechler said...............................................Full Article: Source
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