If you thought real estate prices were soaring in the greater Bozeman area, at least you can hang your hat on the fact that New York City will always set the standard for high prices. New York University paid $157 million dollars for two buildings in downtown Manhattan in an effort to expand for their growing university.
708 Broadway and 404 Lafayette St. share approximately 151,000 square feet between them, a respectable expansion. However, in comparison to the price they paid for the two buildings, the cost per square foot comes out to more than $1,000. The properties were vacant at the time of the sale. NYU wants to use the building as a new fitness center and NYU believes the purchase will be cost effective over time.
Unfortunately, the buildings sales history reflects poorly on the school. The price they paid was unheard of right after the crash. These same buildings sold for 39 million in 2005, before the crash even occurred. The sellers were real estate investors, who clearly made a killing on their 2005 purchase. Real estate values have sky rocketed in Manhattan mainly due to the recent demand by offices and retail stores for downtown Manhattan locations. NYU’s timing for their purchase seems questionable, especially because they are an institution that has a buffer from the harsh economic effects of a market crash compared to individuals.
I always enjoy seeing real estate prices and purchases in major cities because they remind me to always stay within reason and educate myself about a market prior to making a major purchase.