Tuesday, February 10, 2009

A Comparison Too Far

We talk a lot about how local real estate here is faring compared to other regions. Might be a lesson that you can push those comparisons too far. It's always an extreme case to look at NYC, but just for fun here is an example of a 4 BR - 4,000 sq foot Condo (just a condo) in Manhattan with an asking price of $4.5 million.

Yet here in the resurgent Downtown Pittsburgh, what may be the best plot of real estate in the city other than the Point itself, with 3 acres of prime space to boot, the 16-story, 273,000 sq. foot State office building could not sell even for a nearly identical $4.5 million according to the news accounts today. $4.5 million? So even if you ignore the 3 acres of land, the value per square foot is nearly 70 times higher in NYC. Yeah, it's not the fairest of comparisons. Not really a meaningful comparison at all. The state office building is certainly described as a fixer upper for sure, but it still is an amazing location while that condo in NYC is probably in just a run of the mill Manhattan high rise. As they say: location location location.

The news accounts say that the state received several offers for the building. Does that mean the $4.5 mil that had been on the table had been the highest bid? Wonder if someone was trying to get the whole parcel and structure for... I dunno.. $3mil? What was the lowest bid you have to wonder. Worth noting is that the obviously tax exempt state office building is assessed at over $14 million. Makes you wonder what the actual market value is of the property right now if it had to be sold?


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