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Commercial, Retail

[Miller Cicero] 1Q 09 Manhattan Building Sales Report Is Available For Download

May 22, 2009 | 5:57 pm | Reports |

Our commercial advisory firm just released the Manhattan Building Sales Report prepared in conjunction with Massey Knakal, a leading commercial real estate brokerage firm.

My commercial valuation partner John Cicero, MAI in our firm Miller Cicero oversees the report preparation. The report is the only one of its kind that tracks cap rates, income multipliers, price per square foot and number of sales.

The format has changed to quarterly and the expanding series will be more borough-specific.

An excerpt:

The first quarter of 2009 property sales market in Manhattan is characterized by a dramatic slowdown in sales activity. This is the first period tracked that truly reflects the market mentality created in September 2008 with the collapse of Lehman Brothers, the federal bailouts of AIG, Fannie Mae and Freddie Mac, and the ensuing paralysis of the credit markets throughout the fall. (In contrast, our last market report for the second half of 2008 included numerous sales that were negotiated pre- September)…

Massey Knakal will distribute nearly 300,000 hard copies of the report over the next few months.

Massey Knakal Manhattan Building Sales Report [1Q09]

Report Methodology [Miller Cicero]


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[Commercial Grade] New York City Income Property Market Report Second Half 2008 Is Available For Download

March 21, 2009 | 9:04 am | | Reports |

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John Cicero, MAI provides commentary on issues affecting real estate appraisers, with specific focus on commercial valuation. John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is, depending on what day of the week it is, one of the smartest guys I know.
…Jonathan Miller

The Massey Knakal Income Property Report that I prepare on behalf of the brokerage firm was just released for the second half of 2008. The report is the only one of its kind that tracks cap rates, income multipliers, price per square foot and number of sales for the New York City multi-family market. As this report included only those sales (above $500,000) that closed from July 1 through December 31, it includes sales closed before and after the market turn in mid-September, when Lehman collapsed and the credit markets seized.

An excerpt:

The number of sales dropped 45% from the second half of 2007 to the second half of 2008. Relative to the prior year the greatest declines were in Manhattan and Northern Manhattan, both down 54%, and the Bronx, down 60%. Year over year there were 37% fewer sales in 2008. This suggests a turnover rate of 1.9%, down from 3.0% in 2007 (of the categories tracked).

Massey Knakal will distribute nearly 300,000 hard copies of the report over the next few months.

Massey Knakal New York City Income Property Market Report [2H08]

Report Methodology [Miller Cicero]


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[Miller Cicero] New York City Income Property Market Report Second Half 2008 Is Available For Download

March 21, 2009 | 7:56 am | Reports |

Our commercial advisory firm just released its New York City Income Property Market Report for the second half of 2008 for Massey Knakal. My commercial valuation partner John Cicero prepares the report. It’s the only report of its kind that covers the New York City commercial market.

Here’s what he says:
The Massey Knakal Income Property Report that I prepare on behalf of the brokerage firm was just released for the second half of 2008. The report is the only one of its kind that tracks cap rates, income multipliers, price per square foot and number of sales for the New York City multi-family market. As this report included only those sales (above $500,000) that closed from July 1 through December 31, it includes sales closed before and after the market turn in mid-September, when Lehman collapsed and the credit markets seized.

An excerpt:

The number of sales dropped 45% from the second half of 2007 to the second half of 2008. Relative to the prior year the greatest declines were in Manhattan and Northern Manhattan, both down 54%, and the Bronx, down 60%. Year over year there were 37% fewer sales in 2008. This suggests a turnover rate of 1.9%, down from 3.0% in 2007 (of the categories tracked).

Massey Knakal will distribute nearly 300,000 hard copies of the report over the next few months.

Massey Knakal New York City Income Property Market Report [2H08]

Report Methodology [Miller Cicero]


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[Crazy Inconvenient] Appraiser Should Use Recent Comps

November 12, 2008 | 1:53 am | |

In Kenneth Harney’s column this week “In Times Like This, Only the Freshest Comps Will Do” he discusses how lenders are requiring appraisers to use more recent comps in their appraisals.

Wow! Shocking!

  • Can you believe that appraisers should be using comps that are more recent to reflect the current market?
  • How will we “make the number” for the lender so the deal will work?
  • What an incredible inconvenience to everyone involved in the transaction!

Last night I was the speaker at an event and a loan officer came up to me beforehand and said (I am paraphrasing):

“It’s a pain these days to get deals done, not like the old days. We have no access to the appraisers anymore. It’s crazy!”

How do you respond to this?..other than: Are you out of your &*%$#% mind? That’s the kind of thinking that got us in this mess. Good grief.

A “comp” or comparable is a piece of evidence that reflects market value of the subject property by comparing it to and making adjustments for differences. The older the “comp” relative to current value and the more adjustments that need to be made, the more diminished its relevance is to estimating market value.

Major lenders and investors such as Fannie Mae and Freddie Mac are “beating down on the appraisal” by demanding 90-day comps or fresher

Lenders shouldn’t need to require more current comps to be used if the appraiser is on the ball, especially in a declining market area.

Here’s a classic example in Ken’s article:

“Some sellers are taking a beating,” he said, citing a recent transaction where the appraisal came in thousands of dollars below the signed contract price. Had the seller not agreed to eat the difference — take a lower price than the buyer had agreed to in the contract — “the whole deal could have fallen through”

Duh! That’s simply the process of finding the market. The seller was willing to take a lower number. Don’t lay it on the appraiser, who has to prove the market value to the lender empirically.

Here’s a problem though. In weaker real estate markets, there are fewer sales to select more recent comps from. Contracts are the guiding light even thought closed sales are required.

An appraiser colleague of mine told me this many years ago:

Everyone’s smarter than you. The buyer, the seller, the buyer’s real estate agent, the seller’s real estate agent, the mortgage broker, the lender, the buyer’s real estate attorney and the seller’s real estate attorney. They are all looking at you as the final step in the deal.

They already know the “number”.

Another problem, is the education of sellers on the value of their home.

The housing market may have gone bust, but many homeowners are still living in a bubble.

Despite dismal housing headlines and reports showing falling prices nationwide, owners in some once-hot areas still believe their home is gaining value or at least holding its own.

In other words, everyone else’s property values are weakening except their own.

It took John Cicero [no relation to my business partner in our firm Miller Cicero] and his wife an appraisal, some convincing by their real estate agent and some hard-to-swallow facts to get them to lower the $525,000 listing price on their five-bedroom home in Valrico, Fla. They closed two weeks ago for about $380,000.

“We didn’t really understand the severity of the market,” Cicero said. “We lost close to $100,000 in equity so we were walking away from real money.”

Ok, so this isn’t rocket science.

The value of a home isn’t in a vacuum (even though vacuums literally suck). The value of home is in relationship to others that would compete for the same buyer using the principle of substitution.


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[Commercial Grade] The New York City Income Property Market Report – First Half 2008 – is available for download

October 19, 2008 | 11:01 pm | | Reports |

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Commercial Grade is a post by John Cicero, MAI who provides commentary on issues affecting real estate appraisers, with specific focus on commercial valuation. John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is, depending on what day of the week it is, one of the smartest guys I know. …Jonathan Miller


The semi-annual market report that I prepare on behalf of investment sales brokerage firm Massey Knakal Realty Services is available for download. This report was particularly interesting in that it reflected the multi-family and mixed-use sales market in New York City post “credit crunch.” We found that the number of sales was down significantly, 31% overall from the same period last year, with the biggest declines in Northern Manhattan and the Bronx. The median price per square foot was $222/SF, down 5% from the prior period, while the median cap rates increased to 5.8% and the median GIM declined to 11.5.

Download full report


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[Miller Cicero] New York City Income Property Market Report First Half 2008 Is Available For Download

October 14, 2008 | 11:39 pm | Reports |

Our commercial advisory firm just released its New York City Income Property Market Report for the first half of 2008 for Massey Knakal. My commercial valuation partner John Cicero prepares the report. It’s the only report of its kind that covers the New York City commercial market.

Here’s an excerpt:

Though underwriting may be more conservative, the decline in sales volume is a function of lack of inventory rather than lack of demand. The underlying rental market remains strong and investors continue to be interested in such property but supply is constrained. The consolidated median price per square foot across markets declined to $222, down 5% from the prior six month period. Similarly, the median cap rate (across all sectors) inched up slightly to 5.8% from 5.5% from the prior period while the median GIM slipped from 12.4 to 11.5…

Massey Knakal will distribute over 300,000 hard copies of the report over the next few months.

Massey Knakal New York City Income Property Market Report [1H08]

Report Methodology [Miller Cicero]


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Miller Cicero Turns Six

August 19, 2008 | 4:38 pm | |

Six years ago we (me, my wife and sister) formed a commercial valuation firm Miller Cicero with long time industry veteran John Cicero, MAI.

People have always told me “the only good partner is a dead partner” but John proved them wrong…lucky for John. 😉

He’s a great appraiser, smart, fun to be around and best of all, he’s got integrity (and if you have kept up with this blog, you’ll know thats in short supply in the mortgage business).

Miller Cicero has been guided with the same business philosophy as Miller Samuel has for nearly 22 years: think long term – neutrality – no short cuts.

It’s refreshing to see that there are clients out there that actually want to have an unbiased value estimate performed on a property. That’ll be the forward trend.

Here’s what John thinks.


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Even Storied Book Publishers Didn’t See The Pressure

June 26, 2008 | 1:54 pm | |

My business partner John Cicero, of Miller Cicero, our commercial appraisal firm ran across a pretty interesting book released by McGraw-Hill last year, a well respected publisher.

Here’s an excerpt from the book: The Complete Guide to Financing Real Estate Developments (Hardcover) by Ira Nachem (2007, McGraw-Hill, New York), List price $79.96.

Since appraisers want to continue to receive assignments, they generally have a desire to satisfy you, their client. You sometimes can play on that desire and get the appraiser to produce a report with values a bit higher (or lower) than he otherwise would report….If you want to make sure that the appraiser is not undervaluing the property, you should tactfully indicate your concern up front…

In other words, its important to pressure the appraiser – in fact, it is part of a strategy to be a successful developer. Of course with the changing credit market landscape, I would think the lessons learned from this book are now limited. Still, it is quite shocking to me how cavalier this quote is and how commonplace it probably was.

For more details, take a look at John’s post over at my other blog Soapbox.


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[Commercial Grade] Massey Knakal NYC Income Property Market Report Second Half 2007 prepared by Miller Cicero released

May 15, 2008 | 11:58 am | | Reports |

Commercial Grade is a post by John Cicero, MAI who provides commentary on issues affecting real estate appraisers, with specific focus on commercial valuation. John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is, depending on what day of the week it is, one of the smartest guys I know. …Jonathan Miller


The latest New York City Income Property Report covering the second half of 2007 has been released. I prepare this report semi-annually on behalf of Massey Knakal and it’s the only one of its kind. The report tracks the sales activity of walk-up apartment buildings, elevator apartment buildings and mixed-use buildings in five New York City markets: Manhattan (generally south of 96th Street), Northern Manhattan, Brooklyn, Queens and the Bronx.

The total number of sales dropped 16% from the first half of 2007, but a more moderate 7% compared with the second half of 2006. Though the number of sales has declined prices remained stable and even increased in some instances. The following table reflects a peak in the number of sales in early 2006, while pricing has continued to rise.

Though this is clearly not as big as when Bob Knakal got his hair cut, for those interested the entire report is available for download at www.millercicero.com.


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[Miller Cicero] New York City Income Property Market Report Second Half 2007 Is Available For Download

May 15, 2008 | 11:49 am | Reports |

Our commercial advisory firm just released its New York City Income Property Market Report for the second half of 2007 for Massey Knakal. My commercial valuation partner John Cicero prepares the report. It’s the only report of its kind in the New York City commercial market.

Here’s an excerpt:

In the second half of 2007 credit tightened considerably as the losses in sub-prime mortgages worked their way through the financial markets. While indicators are somewhat mixed, in general during this period prices for income property remained stable throughout the city, though the number of sales dropped, in some instances quite dramatically. This reflects the “wait and see” attitude that characterized the period, with fewer buyers bidding and sellers reluctant to lower prices. The fundamentals of the market remained strong, however, with high apartment rents and very low vacancy. The prospect of turning over below market rent-regulated units to higher market levels continues to attract investors, and credit, though tighter, was still available albeit from different sources. Cap rates and gross income multipliers remained stable.

The number of sales dropped 16% from the first half of 2007 to the second half, though the decline was only 7% from the second half of 2006 to the second half of 2007. On a calendar year basis, there were overall 10.5% fewer sales in 2007 than 2006. Though the number of walk-up apartment buildings in Manhattan showed a sharp decline from the first half of the year, calendar year 2007 sales actually show a 16% increase over calendar year 2006…

Massey Knakal will distribute over 300,000 hard copies of the report over the next few months.

Massey Knakal New York City Income Property Market Report [2H07]

Report Methodology [Miller Cicero]


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[Commercial Grade] Massey Knakal NYC Income Property Market Report prepared by Miller Cicero released

December 2, 2007 | 6:05 pm | |

Commercial Grade is a post by John Cicero, MAI who provides commentary on issues affecting real estate appraisers, with specific focus on commercial valuation. John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is, depending on what day of the week it is, one of the smartest guys I know. …Jonathan Miller


The bi-annual NYC Income Property Market Report, that I prepare on behalf of Massey Knakal Realty Services, was just released for the first half of 2007. The report was launched in the first half of 2006 and is the only one of its kind, tracking cap rates, gross income multipliers (GIMs), median price per square foot and number of sales in five submarkets: Manhattan, Northern Manhattan, Bronx, Queens and Brooklyn.

The data shows that the multi-family market throughout the City remained strong through the first half of this year, with the median price of a Manhattan walk-up apartment building exceeding $500 per square foot for the first time. The median price of a Northern Manhattan walk-up crossed the $300 per square foot threshold for the first time. The number of sales that transacted was way up in the first half of this year relative to the prior six month period. For the most part, cap rates and GIM’s remained stable.

As the study includes only sales closed through June 30, 2007 the impact of the so-called “credit crunch” on pricing and sales activity for such property is not yet evident.


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Miller Cicero’s New York City Income Property Market Report First Half 2007 Is Released

November 28, 2007 | 10:28 pm |

Our commercial advisory firm just released its New York City Income Property Market Report for the first half of 2007. My commercial valuation partner John Cicero put the report together. Its the only one of its kind available.

Here’s an excerpt:

The number of closed sales was up 11.3% in the first half of 2007 compared to the prior six month period, driven by the sales activity in Manhattan, including Northern Manhattan. Manhattan saw twice as many walk ups sold in the first six months of 2007 compared to the second half of 2006. Along with the increase in the number of sales, the median price of a Manhattan apartment building showed a sharp increase as well, breaking $500 per square foot for the first time. The median price of a walk-up apartment building in Northern Manhattan also set a record, exceeding $300 per square foot. The outer boroughs were mixed, however, as the price of walk-up apartment buildings in Brooklyn and Queens remained relatively flat, while Bronx saw a decline in price to $100 per square foot. The cap rates for walk-up apartment buildings, which comprise the greatest sample size, illustrated further compression in Manhattan, including Northern Manhattan, and generally remained flat in the Bronx, Brooklyn and Queens. Though the number of sales is up sharply from the second half of 2006, with 2,063 closed sales compared to 1,852, there were nonetheless 13% fewer sales than the first half of 2006, one year ago, which was the most active period of the past four years…

Massey Knakal will distribute over 300,000 hard copies of the report over the next few months.

Massey Knakal New York City Income Property Market Report [pdf]

Report Methodology [Miller Cicero]


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