Nearly nine months later, Hurricane Sandy continues to wash away the luster of Lower Manhattan commercial real estate, according to the results of a new survey of over 100 New York commercial property executives conducted this summer by accounting firm Marks Paneth & Shron (MP&S).
“The insurance companies are the wild card here. The concern seems to stem less from the damage already done and more from the idea that it can happen again and that not enough will be done to prevent it,” saidWilliam H. Jennings, Partner-in-Charge of the Real Estate Practice at MP&S.
Among the findings of the Marks Paneth & Shron Gotham Commercial Real Estate Monitor summer survey that puts commercial property professionals’ views on Lower Manhattan in high relief:
- The majority — 63% — of New York commercial property executives said they think the potential for flooding in Lower Manhattan will increase interest in commercial properties in other parts of the island less prone to flooding. Fewer than a quarter (24%) disagreed with that perspective. The rest weren’t sure.
- Only 43% of real estate executives are somewhat confident there will be a significant government effort to minimize the potential for future flooding in Lower Manhattan.
There is a brighter side to the findings. Fewer New York commercial real estate executives believe that commercial property values in Lower Manhattan will have been permanently lowered by the effects of Sandy than did at the beginning of the year. In the current summer survey, only 9% said values are permanently lowered, compared with 19% in the winter (January 2013) Marks Paneth & Shron Gotham Commercial Real Estate Monitor survey. And more executives — 40%, compared with 26% in January — now say there’s no impact on property values because of Sandy.