The recent multimillion-dollar sale of a commercial space in the Meatpacking District is the latest in a trend of booming office and retail transactions in NYC that shows no sign of slowing soon.
Financial services group TIAA-CREF closed a contract last month to purchase 837 Washington St. for close to $200 million.
The future of the 63,000-square-foot space is uncertain, but it will likely house new stores and startups that are clamoring for a spot in these buildings.
"People are ready and investors are ready to pay insane amounts of money," said Aleksandra Scepanovic, managing director of the real estate group Ideal Properties.
A report released last week by brokerage firm Cushman & Wakefield said about 5,200 commercial properties were traded in the city last year -- 2,000 more than in 2013.
The properties traded for a total of $55.8 billion in 2014, and the average price per square foot jumped 20% from 2013.
The sales were the highest since 2007, when volume from commercial transactions reached $62.2 billion, according to the report.
Scepanovic said the demand for office and retail reflects similar developments in the city's residential real estate market, which saw rents and sales prices consistently rise to record levels over the past two years.
"There is a spillover that is happening from the residential side of the story," she said.
The Manhattan office market had its strongest year since 2005, with office space availability dropping to 9.3% in 2014, according to the real estate group DTZ.
The building purchases reflect the increase in asking rents for stores and offices, which went from an average of $65 per square foot to $70 per square foot, DTZ said.
"The retail always goes where the higher-end development goes," Scepanovic said.
Hiten Samtani, the managing editor of real estate website The Real Deal, said the surge in commercial prices reflects a booming economy.
Samtani said that retail is in heavy demand for commercial properties.
"They will pull in a lot of high-end tenants who can bring in the money," he said.
At the same time, Samtani noted that developers are conscious of the changing office environment. Startups tend to favor smaller workspaces, he said, so building owners have adapted to fit their needs.
Scepanovic said these purchases are beneficial for the city as a whole because they help quicken the pace of the economic recovery.
"There is a consensus that New York City is a great place to invest your money and start your businesses," she said.
These are some recent big-name commercial sales:
837 Washington St.
The six-story building in the Meatpacking District sold for a reported $3,158 per square foot, making it one of the biggest deals in the history of the neighborhood.
TIAA-CREF wouldn't comment on the purchase. Tech giant Samsung currently has a lease for a marketing center to show off new products. Rent is $125 per square foot for the office space, according to The Real Deal.
461 W. 14th St.
Last week, the nearly 25,000-square-foot retail space sold for about $80 million to the Savanna Fund Real Estate Group, according to The Real Deal. The site has room for three stores and was formerly a gas station.
Savanna declined to comment on details about the purchase.
771-775 Washington St.
The real estate firm The Harch Group made a play for the 22,000-square-foot property in the Meatpacking District last month.
It paid close to $70 million for the two-story building which features a ground floor with 8,000 square feet of shopping.
80 West End Ave.
This West Side building was the site of back-to-back multimillion dollar sales in 2013 and 2014.
The property, which houses offices for the Metropolitan Opera, RCN and United Cerebral Palsy of New York City originally sold for $83 million two years ago to Kushner Companies, according to the real estate firm's website.
In July, it sold the nearly century-old building to Frank Ring for $195 million.
530 Fifth Ave.
In June, a group of real estate investors saw the potential in this 26-story retail and office building near Grand Central. The group, which included Thor Equities, paid $595 million for the 500,000-square-foot property, which already houses several companies.
The previous owners, Jamestown Properties, spent $10 million renovating the lobby and amenities, according to a news release from June.
197-205 Smith St.
A former Cobble Hill supermarket was sold for $18 million in November.
Real estate firm RKF arranged for the deal between the owner and a group of investors who were interested in the 20,000-square-foot property.
A representative for RKF told amNewYork in the fall that there are big plans for an expansion in the future.
"The new ownership will benefit from the strong residential base and the opportunity to grow rents," the company's managing director Brian Segall said in a statement.