New York City’s multi-family property market remained subdued in February following a manic close to 2012 and a subsequently slow January, according to data provided to The Real Deal by Ariel Property Advisors.
There were just 28 multi-family transactions in the city in February, the data show, adding up to a total of $249.11 million. Those figures represent a 28 percent decrease in transaction volume and a 42 percent drop in dollar volume compared to February 2012, which saw 39 transactions totaling more than $428.82 million. Compared with January 2013, the numbers represent a 4 percent increase in transaction volume and a 22 percent decline in dollar volume.
Shimon Shkury, president of Ariel Property, attributed the sluggishness to the after effects of the gross uptick in the market in the last quarter of 2012, when fear over increases in capital gains tax rates led investors to push their deals to close before the end of the year.
“It’s important to note that in a normal market it takes 30 to 90 days to close a deal after a contract is signed,” Shkury said “The expiration of the tax cuts at the end of 2012 changed this dynamic.”
Despite a dip in transaction volume, Shkury noted, multi-family prices are rising thanks to low inventory.
“Bidding wars are back and many offerings are going above asking price as high demand confronts tremendously low inventory,” he said.
Northern Manhattan led February in terms of dollar volume. The majority of the nearly $110.88 million in deals in the area came from the sale of a $75 million portfolio of properties in West Harlem and Washington Heights, Ariel said.
Sales were relatively light in prime Manhattan, with just seven sales totaling $88.8 million. The Kushner Companies’ purchase of seven East Village multifamily buildings for $49 million accounted for the bulk of the activity. – Katherine Clarke