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A taxi drives past a vacant development site recently purchased by HFZ Capital Group on W. 17th St. in the Chelsea neighborhood of New York.Victor J. Blue/Bloomberg

Manhattan property owners are cashing out ahead of schedule.

With New York real estate values and rents surging, owners of commercial properties acquired as recently as a year ago are already seeking buyers. In the case of one midtown site, the developer scrapped construction plans to sell an empty plot of land.

There's so much buyer demand that in some situations it's more opportune for landlords to sell rather than follow through on plans for redevelopment or filling buildings with new tenants. A record $29.4-billion (U.S.) of Manhattan property deals were completed in the first half of 2015, according to brokerage Jones Lang LaSalle Inc., part of a five-year real estate rally that has pushed prices to new highs in big U.S. cities.

"For investors who were able to buy early in the cycle, prices have appreciated to a level where they were able to get the business plan started and get a good return without having to fully execute," said Scott Rechler, chief executive officer of RXR Realty LLC, which has about $10-billion of real estate throughout New York, New Jersey and Connecticut.

Take Thor Equities LLC, which acquired two prewar buildings in midtown Manhattan in 2011 and demolished them with plans to build a 71-storey tower. The company in June agreed to sell the vacant parcel at 520 Fifth Ave. for about double the $150-million acquisition price, without even starting a new foundation.

Thor originally was going to hold on to the property through 2018, according to a person with knowledge of the matter, who asked not to be identified. A company spokesman declined to comment.

Institutions from around the world are using Manhattan real estate as an investment haven. Demand "seems to be insatiable," from new investors, and some developers are seizing on the opportunity to profit now rather than moving ahead with construction plans, said Robert Knakal, chairman of New York investment sales at brokerage Cushman & Wakefield Inc.

"There are a lot of new people coming into the market and a lot of people who have raised money to purchase development opportunities," Mr. Knakal said.

The glut of capital is making good deals harder to find. For an office building in Manhattan, the average capitalization rate – a measure of yield for a real estate investment – has fallen to 4.1 per cent, the lowest since December of 2007, according to property-research firm Green Street Advisors LLC.

High-profile deals with record-setting price tags have sparked concern that the well of capital targeting U.S real estate is overinflating values, which have eclipsed 2007 peaks by 29 per cent in major metropolitan areas, according to Moody's Investors Service and Real Capital Analytics Inc.

Federal Reserve chair Janet Yellen flagged rapidly rising commercial-property prices as a cause for concern in a semiannual report to Congress last month.

Retail rents in the neighbourhood around Times Square have more than doubled in the past five years, to about $2,500 a square foot, New York-based Cushman & Wakefield said in a midyear Manhattan update.

"Prices on a per-square-foot basis are higher for every type of property for every neighbourhood in the city," Mr. Knakal said.

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