The Glass Half Full - Robert Knakal

ROBERT A. KNAKALChairman & Founding Partner

Massey Knakal Realty Services

BACKGROUND:

• Wharton School of Business - 1984

• Began Career 1984 – CB Richard Ellis

• Massey Knakal Established 1988

BROKERAGE:

• Over 1,150 Properties Sold

• $7.4 Billion Aggregate Market Value

• Two-Time Winner – Most Ingenious Deal of the Year

• REBNY Lifetime Achievement Award

INVESTMENT SALES

MARKET OVERVIEWROBERT A. KNAKAL

2. COMMERCIAL REAL ESTATE METRICS

TABLE OF CONTENTS

• Volume

• Value

• Distressed Assets

1. NEW YORK CITY OVERVIEW

4. MACRO CONSIDERATIONS• Economic

• Political

3. OPTIMISM VS. PESSIMISM

• Sector Performance

NEW YORK CITY COMMERCIAL PROPERTY SALES

Top Brokerage Firms 2010Based on # of Transactions (All Sales Over $500,000)

# Transactions

2010

Total $ Volume

2010Massey Knakal Realty Services 215 1,010,466,998$

Marcus & Millichap 65 191,126,513$

Besen & Associates Inc. 63 355,324,408$

GFI Capital Resources Group, Inc. 45 142,516,600$

Rosewood Realty Group 43 392,327,912$

Eastern Consolidated 33 407,713,629$

Prudential Douglas Elliman 27 310,502,475$

CB Richard Ellis 25 5,013,457,500$

The Corcoran Group 19 95,238,237$

Newmark Knight Frank 17 375,817,659$

Greiner-Maltz Company, Inc. 14 54,790,100$

Kalmon Dolgin Affiliates, Inc. 14 51,742,000$

Eastdil Secured 12 3,074,835,000$

Itzhaki Properties 12 85,195,000$

Time Equities, Inc. 10 30,207,899$

Swig Equities, LLC 9 41,348,500$

Angelo, Gordon & Co. 9 8,851,775$

Leslie J. Garfield & Company 8 40,980,473$

Jones Lang LaSalle 6 856,500,000$

Friedman-Roth Realty Corp. 6 18,995,000$

The Halstead Property Company 6 18,882,550$

City One Real Estate & Financing 6 18,755,000$

Winoker Realty Company, Inc. 6 17,215,019$

Murray Hill Properties LLC 5 171,350,000$

Cushman & Wakefield 4 499,800,000$

Total Dollar Volume - (Brokers on Chart) 679 13,283,940,247$

Total Dollar Volume - (All transactions tracked by CoStar Comps in 2010) 1058 16,776,912,620$

NEW YORK CITY COMMERCIAL PROPERTY SALES

Top Brokerage Firms 2001-2010Based on # of Transactions (All Sales)

# Transactions

2001-2010

Massey Knakal Realty Services 2,229Besen & Associates Inc. 599Eastern Consolidated 514Marcus & Millichap 433GFI Realty Services 421Capin & Associates 259CB Richard Ellis 184Prudential Douglas Elliman 167Cushman & Wakefield 153Corcoran Group 145Newmark Knight Frank 142Lee O'dell Real Estate Inc. 138Itzhaki Properties 126Greiner-Maltz Company of Long Island, Inc. 122Kalmon Dolgin Affiliates Inc. 114Sholom & Zuckerbrot Realty Corp. 95Eastdil Realty 93Swig Equities, LLC. 64Solar Realty Management Corp 62Extreme Realty 55WRA Properties 46Rosewood Realty Group 43Grubb & Ellis 40GVA Worldwide, LLC. 37John Anthony Group, Inc. 35NAI Global 27Other Brokerage Firms - Combined 309

Total Transaction Volume (Brokers on Charts) 6,652

CITYWIDE DOLLAR VOLUME(AGGREGATE SALES PRICE)

2005 –2011, ALL SALES (IN BILLIONS)

Source: Massey Knakal Realty Services

$32.6

$44.2

$62.2

$25.3

$6.3

$14.5

$3.9

$0

$10

$20

$30

$40

$50

$60

$70

2005 2006 2007 2008 2009 2010 2011

NYC TOTAL SALE DOLLAR VOLUME

1st Quarter 2011


NYC TOTAL BUILDINGS SOLD


4,443

4,8755,018

3,144

1,4361,667

433

0

1,000

2,000

3,000

4,000

5,000

6,000

2005 2006 2007 2008 2009 2010 2011

% OF TOTAL STOCK SOLD


2.69%

2.96%3.04%

1.91%

0.87%1.01% 1.05%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

2005 2006 2007 2008 2009 2010 2011

AVG. PRICE PER PROPERTY SOLD(IN MILLIONS)


$7.3

$9.1

$12.4

$8.0

$4.4

$7.2

$9.0

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

2005 2006 2007 2008 2009 2010 2011

AVERAGE PPSFMANHATTAN – FROM PEAK TO 2009

-32%

AVERAGE PPSFMANHATTAN – FROM PEAK TO 2010

-38%

Why do people believe values

were rising in 2009?

Why do people believe values

were rising in 2009?

Core vs. Everything Else

Manhattan Leading the Way

Expect:

• +12% PPSF Basis Manhattan

• Stabilization in Outer Boroughs

Why Are Values Rising?


1 Fundamentals Are Improving



2 Supply / Demand Imbalance




3 Interest Rates




3 Interest Rates

4 Financing is Available

2011 vs. 2010

COMMERCIAL PROPERTY TYPES - MANHATTAN

Multi-Family

Elevator +18%

Walk-Up +13%

Mixed-Use - 32%

Retail +92%

Office + 5%

Office Condo +18%

Hotel +15%

Land - 15%

Specialty Use + 7%

As we progress into 2011,

there are many reasons for:

• Optimism

• Pessimism

Half Full or Half Empty?

10 THINGS TO KEEP AN EYE ON:

1. Unemployment

3. Banking

4. Global Implications

5. Supply vs. Demand

2011 and BEYOND

2. Corporate Profits

6. Housing Market

7. Inflation

8. Fed Monetary Policy

9. Deleveraging

10. Deficits, Debt, Pensions

ROBERT A. KNAKALChairman & Founding Partner


[email protected]


275 Madison Avenue

New York, NY 10016