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Manhattan office cap rates are now below those of Los Angeles, implying office properties in the Big Apple are overvalued according to a new report by Green Street Advisors.
- A slew of deregulation has increased new office supply in NYC vs. a discouragement of new office construction has lifted rents in LA.
- The report's findings do not bode well for NYC focused office REITS like SL Green (SLG +0.1%), Vornado (VNO +0.8%), and Boston Properties (BXP +0.6%). For the West Coast focused Douglas Emmett (DEI +0.7%) however, the outlook looks rosier.