The Real Deal New York

Manhattan apartment buildings trading at prices above 2008 peak: new data

New RCA indices track the U.S. apartment, office, retail and industrial sectors
By Adam Pincus | December 05, 2012 06:00PM

It will come as no surprise to those following the Manhattan multifamily investment market that prices are at record levels. Now that’s borne out by Real Capital Analytics’ new commercial property price indices. The RCA data shows that the average sale prices of Manhattan apartment building are higher than they were in the second quarter of 2008.

The RCA repeat-sales statistics are based on a value of 100, which represents sales pricing at the end of the second quarter of 2001. The Manhattan apartment index reached 300 in the last quarter — beating the previous high of 287 in 2008, the company reports.

In addition, the Midtown office figure is creeping closer to the peak, when it hit 278 in the second quarter of 2008. In the third quarter this year, it was at 275. The transaction-based indices track repeat sales above $2.5 million.

One example of the rising prices: Stonehenge Partners’ $76 million purchase of 103 East 86th Street in Carnegie Hill from Abro Management. Abro had purchased the 48-unit apartment building four years ago for about $49 million, data from RCA shows.

Aaron Jungreis, president of Midtown South-based Rosewood Realty Group, said the statistics backed up what he saw on the ground. “It is a rate-fueled market, and [interest] rates are even lower today,” than they were in 2008, he said.

He would not speculate whether prices would continue to rise, “But they are not going to go down.”

Real Capital this month debuted the more than 200 indices, which cover the United States in apartment, office, retail and industrial sectors. The research firm still publishes its Moody’s/RCA indices, which use a different model that does not provide the specificity of the new indices.

RCA formulated the indices to be used by institutional investors in several ways, including to track asset values and analyze portfolio allocation. The figures are not formulated to be used as the basis for derivatives financial trading, the company said.