Eli Weiss, principal of Joy Construction, expressed skepticism that New York’s commercial properties have retained so much of their value, given the beating they have taken during the past two years, although he said he remains optimistic about a recovery moving forward.
“It’s hard for me to believe with where occupancy rates are for office and hotels and retail that 92% is the correct number, but it’s also a question of where you’re looking at it,” Weiss said. “As somebody who’s bullish on New York, I’d love to think we’d be there in a year from now.”
David Schechtman, managing director at Meridian Capital Group, said he viewed the projections as more reasonable.
“I think you would probably need the market to opine further and do a deeper dive into the income and expenses,” Schechtman said, “but it seems pretty much in line with the data we’re receiving and the valuations we’re providing for private groups.”
Taxes from commercial properties make up a huge part of the city’s budget. Adams projected a tax revenue growth of $726 million for FY23 due to property tax values being higher than expected. He cited property tax growth as “our single largest revenue source” in his budget remarks.
The city valued its properties at about $1.4 trillion in total, a 2.1% increase over pre-pandemic levels.
“The city’s overall property valuations have come in above pre-pandemic highs three years sooner than expected. By any measure, I think that’s a sign of optimism,” said Rahul Jain, deputy state comptroller. “We will know more about whether it was too optimistic as property owners appeal their taxes over the coming months, but it’s a good sign for the resilience of the city’s property market and the desirability of the city.”