UPDATED 7:45 a.m., July 16: Even though May was a bit slower than the previous month, New York City’s multifamily market is strong and steady, according to Ariel Property Advisors’ monthly report.
Especially the volume of sales in the first half of 2014 is higher compared to the same period in 2013, according to Ariel’s Michael Tortorici and the firm’s president, Shimon Shkury.
This year, the month of May saw a total of $645.9 million spent on multifamily sales across the city. During the same period in 2013, this number was $485 million. This, however, is a 9 percent drop in dollar volume compared to the month before, when that number was $711.4 million.
This May, the city saw 52 transactions comprised of 102 buildings, compared to 61 transactions divided over 89 buildings during the same period last year.
“There’s high demand,” Tortorici told The Real Deal, especially since multi-family buildings are considered a “safe asset.” Tortorici added that some of the uptick could be explained by general job growth and an increase in achievable rents while interest levels remain relatively low.
April was a particularly strong month for the Bronx and Brooklyn, with the two boroughs outpacing Manhattan on the amount of units sold, transactions and dollar amounts. While Manhattan was back in first place in May, prices remained strong for the Bronx, averaging $129 per square foot.
In Brooklyn, too, sales cooled a bit in May, with 12 transactions totaling $107.455 million. Especially a newly constructed building at 76 Meserole Street for $35.6 million – or $584 per square foot – added to the month’s total numbers.
In May, Manhattan saw 13 transactions totaling $239.218 million, an increase in dollar volume compared to both last month and the same time last year.
In Northern Manhattan, 10 transactions took place in May totaling $133.5 million. Month-over-month, this is a 107 percent increase in building volume and a 68 percent increase in dollar volume since April. That’s a 138 percent year-over-year increase in building volume and an 80 percent year-over-year increase in dollar volume for the area.
The $72.5 million sale of Yeshiva University’s Wilf campus influenced these numbers.
Five transactions were completed in Queens in May, totaling $34.7 million. The sale of a 66-unit elevator building for $14 million – or roughly $212,000 per unit – indicates strong pricing in that borough as well, according to the report.
Total sales fell under the $1 billion mark for the first time since May, according to the report and averaged out at $937.6 million. The average monthly transaction volume was 63 transactions in May, which is slightly below previous months.
While the second quarter of 2014 looked slightly calmer than the first, and numbers from May are slightly lower than April, it’s important to look at the overall year-over-year picture, Tortorici and Shkury said.
Shkury added that the influx of capital – local, national but also international – has also had a positive influence on the market. Shkury said that a lot of capital is being reinvested in the market.
“Money is retained here,” Shkury said, “on top of new money coming in.”