Meridian Investment Sales
What person, project, transaction or market trend had the greatest impact on your industry this year?
The multiple Fed’s interest rate hikes, which translate to 6.0-6.5% lending rates have put downward pressure on valuations, which were already negatively impacted by the HSTPA 2019 rent laws. Many investors facing loan maturity over the next 12 months will be required by the banks to pay down a portion of the existing loan to secure a refinance. Many investors may not have these funds readily available, and we expect to see more forced sell-offs from these real estate owners.
How has your career path changed in 2022?
There is more focus on strategic advisory for the entire portfolio as it relates to maximizing asset value, refinancing options, and asset-type allocation verse the disposition of one asset. There is a great deal of collaboration with the other groups at Meridian including Meridian Capital and Meridian Retail Leasing and utilizing the collective expertise allows us to respond to clients with solutions quickly. Notable transactions include 227 Riverside Dr., 539-541-543 West 49th St. and 1256-1260 Lexington Ave.
What emerging trends will drive investment and development in 2023?
Real estate investors demand for free market buildings with value add will continue to command the most aggressive pricing in NYC. There is still demand for well-maintained, rent-stabilized buildings, especially by family operators and real estate investors with a long-term investment horizon at cap rates 100-150 bps above the lending rates. With higher interest rates, there will be more forced sell-offs from investors who are facing loan maturity and cannot meet the banks’ underwriting requirements which will in more cases than not, require an equity pay down to secure the refinance.