Rental property acquisitions in New York City tumbled 53 percent in May, after reaching a furious pace the prior month.
Throughout the city, 29 buildings with a total of 1,078 apartments sold for a total of $144 million last month, compared with April, when 55 buildings with 2,193 units sold for a total of $308 million, a new report from Ariel Property Advisors shows (see report below). Sales last month were also below May 2010, when 47 buildings traded for a total value of $199 million.
The report covers sales of multi-family properties with 10 or more units above $1 million, of more than 5,000 square feet.
Yet the decline in sales activity was not seen as a broad cooling in the market, Michael Tortorici, a vice president at Ariel Property, said. The dip was instead likely due to investor jitters earlier this year after a rush of buying at the end of 2010.
“There was a period in the first quarter of the year, in which people wanted to see how the market was going and how the economy was going,” Tortorici said. “And I think that resulted in fewer contracts signed at that point.”
Most investment sales close two or three months after the contract is signed, meaning buyers in February and March were more cautious about signing deals.
Queens had the most dollar volume, where just two properties traded for a combined $59.9 million, accounting for more than 40 percent of the total $114 million in sales.
In a positive sign, the average price per foot for Manhattan properties rose from $384 per foot in April, to $429 per foot in May. Two locations, at 212 Eighth Avenue in Chelsea and 245 Mulberry Street in Nolita, averaged more than $625 per square foot, the report says.
The total figure of $144 million last month was also lower than a six-month moving average, which has not fallen below $170 million over the past 12 months.
But speaking anecdotally, Shimon Shkury, Ariel Property’s president, said bidding activity was up.
The multi-family data comes as a contrast to a Crain’s article yesterday that said office building sales for the second quarter (which closes Thursday) were far higher than the first quarter of the year.