“The value of real estate is controlled by supply and demand” said the legendary Sam Zell, chairman of both Equity Office Properties, the nation’s largest publicly traded owner of office buildings, and of Equity Residential, the nation’s largest residential real estate investment trust. “Today, ownership of real estate is an asset class recognized by the investment community,” he added. “Everyone in the country wants to own real estate.”

When Mr. Zell was asked whether he felt the price of real estate in New York was overpriced, he said “the price of real estate should never exceed the replacement cost.” He and his companies seem to be bullish on New York, based on three acquisitions made over the last few months. In August, Equity Office acquired the 380,796-square-foot office component of 717 Fifth Ave. for $160.5 million, or $422 a square foot. In September, Equity Residential paid $100 million, or $550 a square foot, for the land marked 238-unit residential apartment building at 71 Broadway. That price amounts to $400,000 a unit in a property that was converted to residential in 1997. In August, Equity Residential paid $93.1 million, or $359,000 a unit, for the 259-unit residential rental property, Hudson Crossing, at 400 West 37th St. Based on these recent acquisitions, it seems the purchase prices are in line with the replacement costs of these real estate assets.

“The general market consensus appears to be that commercial real estate will remain an attractive investment alternative in 2005,” according to a market perspective report issued by Prudential Mortgage Capital Company. “Feeling that commercial real estate debt and equity remain safe alternatives to other traditional investments, institutional investors are expected to increase their allocation to commercial real estate by 15% to 20% over the next 12 months.”

Investors continue to have a pent-up desire to own real estate in the region as evidenced by the number of sales. The weak dollar has increased demand by European investors who are actively seeking to invest in real estate. The New York region has a limited amount of quality properties, resulting in bidders from around the world trying to own a piece of the Big Apple and its suburbs.

Today, the principal of SwigBurris Equities, Kent Swig, will close on the company’s latest purchase in Lower Manhattan. It is paying $165 million, or $190 a square foot, to Trizec Properties for the 32-story, 868,000-squarefoot office building at 110 William St., which was built in 1957. Over the last few years, Mr. Swig, who is bullish on Lower Manhattan, has purchased 44 Wall St., 48 Wall St., 5 Hanover Square, and, this past June, 80 Broad St.

Eastern Consolidated, one of New York’s leading sales brokerage companies, has been retained to sell C & K Properties’ 218,000-square-foot office building up the street from Mr. Swig’s latest purchase at 156 William St. According to the trade, the sellers are hoping to get $42 million, or $192 a square foot, for the 12-story building which was built in 1955.

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It is reported that Peter Kalikow, the chairman of H.J. Kalikow as well as the chairman of the Metropolitan Transit Authority, is marketing the land marked 28-story, 877,410-squarefoot building at 195 Broadway, one block from the site of the World Trade Center. According to the trade, the building might fetch as much as $350 a square foot, or $308 million.

On the other side of the Hudson River in Jersey City is the 42-story, 1.2 million-square-foot, class-A office tower at 101 Hudson St.

Early next year, Mack Cali Realty, a New Jersey-based REIT, plans to close on the purchase of the Hudson Street building for $329 million, or $275 a square foot. The building was completed in 1992 on the former site of the Colgate-Palmolive manufacturing site. The seller is a joint venture of LCOR, Merrill Lynch, and the State Teachers Retirement System of Ohio.

In September 2003, the Macklowe Organization paid a record $1.4 billion, or about $790 a square foot, for the General Motors Building located at 767 Fifth Ave. Last month, the Willett Companies announced it is in contract to purchase the 131,633-squarefoot office building at 55 Railroad Ave. in Greenwich, Conn. It will be paying $92.1 million, or $700 a square foot, to National Office Partners, a joint venture between Hines and CalPERS. The selling price at about $700 a square foot is believed to be the highest-ever paid price per square foot for a suburban office building.

The building, which was built in 1975, was recently renovated. It is located a short walk from the train station, a convenient distance to retail, and less than a quarter mile from an I-95 interchange.

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Reader’s Digest Association is the owner of a 114-acre parcel and 700,000-square-foot office complex in Chappaqua. Last month, it agreed to sell its corporate headquarters, and lease back about 230,000 square feet of the property. It will receive $59 million, or $84 a square foot, from the purchaser, Greenfield Partners LLC and Summit Development LLC.

In August, the Fiel Organization, in partnership with Lloyd Goldman and Stanley Chera, purchased the retail portion – the ground and first three floors – of the tower at 717 Fifth Ave. Last month, the Fiel Organization entered a contract to buy the 95,000-square-foot building at 590 Fifth Ave. It agreed to pay about $55 million, or $580 a square foot.

Next week, Murray Hill Properties will close on the purchase of the 25-story, 400,000-square-foot office building at 1412 Broadway, also known as the Fashion Gallery Building. It will be paying $105 million, or $262 a square foot, to JER Partners, which purchased the property from the REIT S.L. Green Realty in 2001 for $91.5 million.

Earlier this month, Murray Hill Properties and its partner Olympus Real Estate Partners announced that they took off the market the 11-story, 387,000-square-foot office tower at 417 Fifth Ave. Last month, it entered into a contract to sell the tower to Hidrock Realty for about $153 million. Murray Hill and Olympus purchased the building in July 2002, when they paid $127 million to EBS Fifth Property Associates, a partnership of Black acre Capital Group and Emmes & Co.

Later this month, Vornado Realty Trust will close on the purchase of two retail condominiums containing 12,000 square feet in SoHo. The purchase price is $21.8 million, or $1,817 a square foot.

In November, the 146-room Sheraton Russell Hotel at 45 Park Ave. and 37th Street was sold. The property will be converted into a condominium. The purchaser paid $40.25 million, or $275,684 a room, or $447 a square foot.

Not everyone is positive about the demand for commercial real estate. At the Real Share Conference this October, some of the participants’ remarks were rather negative. Comments included that “record building prices will come back to haunt the industry.” One attendee even went so far as to say, “We’re about to see some of the worst deals in the industry’s history.”

Nevertheless, based on the relatively low interest rates, high availability of funds from lenders, as well as increase in the number of investors, the outlook seems bright for the continuation of record sales of commercial and residential buildings in the region.

Mr. Stoler is a television broadcaster and vice president at First American Title Insurance Company of New York. He can be reached at mstoler@nysun.com.