In Northern Manhattan, investment sales spiked by 58 percent in 2012

January 24, 2013 12:00PM

Despite an increase in inventory stemming from the impending expiration of the Bush tax cuts, demand for investment sales opportunities appears to have outpaced supply in 2012. Sales of Northern Manhattan investment properties jumped by 58 percent year-over-year last year, raking in a total $1.17 billion compared to $693 million the year previous, according to a report on Northern Manhattan by Ariel Property Advisors. There were a total of 296 commercial real estate transactions last year, the report shows, 91 more than in 2011.

“[The year] 2012 was by far the most active and aggressive year in investment property sales in Upper Manhattan since the 2008 financial crisis, said Michael Tortorici, vice president of Ariel Property Advisors. “With rents reaching their highest levels since 2007 and with interest rates driven to historic lows, multi-family buildings continued to be a preferred asset class.”

Development sites were a particularly hot commodity in Northern Manhattan last year, according to Ariel’s statistics. There were 35 deals for new development sites in 2012, totaling approximately 810,569 buildable square feet, according to the report, representing a 133 percent increase in transaction volume year-over-year. The dollar value of the deals for these sites also rose — by 127 percent to $116.9 million. The average price per buildable square foot in the area was $87.

Multi-family transactions in the area increased by 60 percent to 150, according to the report, while the dollar value of multi-family deals rose 84 percent to $789.56 million. Average capitalization rates for multi-family assets dropped more than 50 basis points to 6.52 percent and the average price per square foot for a multi-family property rose by 4 percent to $182.

Ariel defines Northern Manhattan as above East 96th Street and West 110th Street. –Katherine Clarke