The Real Deal New York

$12.6B: NYC multifamily dollar volume in 2014

Closed sales of properties up by 39 percent, says report from Ariel Property Advisors
By Mark Maurer | January 26, 2015 01:10PM

The dollar volume of New York City multifamily sales in 2014 skyrocketed to nearly $12.6 billion, according to a year-end report from Ariel Property Advisors.

Volume increased by 39 percent from $9.1 billion in 2013. The surge is even greater – 50 percent – compared to 2012, when the city saw $8.4 billion in dollar volume. For every borough except Brooklyn, institutional deals exceeding $20 million accounted for more than half of all multifamily deals. In Brooklyn, those transactions comprised 47 percent.

Brooklyn saw more multifamily sales than any other borough, with 222. The market there also saw the biggest spike in dollar volume, which is up by a whopping 88 percent to $2.4 billion from $1.3 billion. Notable deals include 101 Third Avenue, a Boerum Hill rental building for which a private European investor paid $52.2 million, or $746 per square foot.

There were 761 multifamily sales, a year-over-year increase of 8 percent, involving 1,413 properties, a 13 percent year-over-year increase. Neighborhoods such as the Upper East Side, East Harlem, Brooklyn Heights, Kew Gardens and Morrisania dominated.

The number of Manhattan deals dropped slightly, but the dollar volume climbed by 15 percent to $5.1 billion from $4.5 billion. One of the biggest deals was the Chetrit Group and Stellar Management’s purchase of two Upper East Side rental buildings at 1660 2nd Avenue and 160 East 88th Street for a combined $485 million.

“Current owners are choosing not to sell because they cannot find suitable replacement assets that offer the same returns and upside,” the report stated, “and buyers are paying ever higher premiums to own core Manhattan assets.”

Queens and the Bronx also posted strong sales in 2014. The average capitalization rate for Bronx multifamily buildings fell more than 100 basis points year-over-year to 6.1 percent, data showed.