The Real Deal New York

NYC i-sales down 16% during the first half of 2016

The Bronx showed resiliency while Manhattan, Brooklyn and Queens dipped

July 12, 2016 03:10PM
By Rich Bockmann

From left: 787 Seventh Avenue in Midtown, 388 Greenwich Street in TriBeCa, 1285 Sixth Avenue in Midtown and the Sony Building at 550 Madison Avenue in Midtown

From left: 787 Seventh Avenue in Midtown, 388 Greenwich Street in Tribeca, 1285 Sixth Avenue in Midtown and the Sony Building at 550 Madison Avenue in Midtown

At the year’s halfway mark, total dollar volume in the New York City investment sales market was down about 16 percent year-over-year, according to an analysis of CoStar data by The Real Deal.

But one borough did buck the trend: Led by a strong multifamily market, the Bronx saw investment saw a slight climb of about 3 percent.

Manhattan, Brooklyn, Queens and the Bronx saw a total of $31.6 billion worth of investment sales over the first six months of the year — a drop of slightly less than 16 percent compared to the same period last year, TRD’s analysis shows. The number of transactions was down about 24 percent, to 2,938.

The dip in dollar figures hit each side of the East River roughly equally, despite some high-profile deals.

Manhattan logged four billion-dollar-plus transactions, all involving office towers: CalPERS’ $1.95 billion purchase of the Equitable Building at 787 Seventh Avenue, Citigroup’s $1.77 billion buy of its headquarters at 388 Greenwich Street in Tribeca, RXR Realty TRData LogoTINY and partners’ purchase of 1285 Sixth Avenue for $1.65 billion, and Olayan America’s deal to buy the former Sony Building for $1.4 billion.

Not surprisingly, office sales made up about 55 percent of the total dollar volume in Manhattan during the first half. But the borough’s multifamily market had a strong first half, as investors seek out strong risk-adjusted returns, said JLL’s Stephen Shapiro.

“I think what’s been happening is that investors who traditionally only invest in office, a lot of these folks have shifted to multifamily, which I think will possibly outperform last year,” Shapiro said.

Manhattan saw $23.6 billion worth of sales during the first six months, down nearly 17.5 percent.

Across the East River, dollar volumes dropped about 15 percent in both Brooklyn ($4.53 billion) and Queens ($2.08 billion).

In Kings County, where Russian billionaire Mikhail Prokhorov bought the remaining 20 percent stake in the Barclays Center for $453.75 million, both the multifamily and retail sectors performed best, combining for nearly 60 percent of total sales.

Brooklyn saw the biggest drop in the number of deals, down about 25 percent to 1,160 transactions.

Multifamily also led the way in Queens, where Weiss Realty bought the 130-unit Crescent Club in Long Island City for $97 million.

Yet despite the fact that that the number of deals were down across the four boroughs, the Bronx still managed to see a boost in total dollars. The number of transactions fell less than 10 percent (the most resilient among the submarkets) to 422 deals, while total dollar volume rose a hair under 3 percent to $1.34 billion.

That most likely is attributable to the strength of the multifamily market, which makes up 60 percent of total sales. The Bronx’s big deals during the first half include SentosaCare’s deal to buy 100 West Kingsbridge Avenue for $110 million, and Brooklyn investor Joel Gluck’s $66.7-million purchase of the 470-unit Academy Gardens complex in the South Bronx.

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