The Real Deal New York

NYC sales volume hits record $20.8B in Q1: report

Three $1B-plus deals “dominated” market: CushWake
By Rey Mashayekhi | April 14, 2015 03:00PM

Investment sales transactions in New York City hit a record $20.8 billion in the first quarter of 2015, Cushman & Wakefield said in its quarterly capital markets overview Tuesday.

The first quarter saw a 26 percent increase in transaction dollar volume from the previous quarter. If investment sales were to continue at the same pace, they would hit $83.1 billion for 2015 in total — a 44 percent jump from sales volumes of $57.7 billion in 2014.

But Bob Knakal, chair of the brokerage’s New York investment sales division, said he does not expect the first quarter’s tearaway pace to continue over the remainder of the year. Instead, Cushman forecasts a total dollar volume of $65 billion for 2015.

Three transactions valued at $1 billion-plus “dominated” sales activity in the first quarter, with the firm noting only four deals over $1 billion in all of 2014. Such transactions – including Ivanhoe Cambridge’s $2.2 billion acquisition of 3 Bryant Park and Anbang Insurance Group’s $1.95 billion purchase of the Waldorf Astoria – mean dollar volumes have “already exceeded” the 2014 total for the $1 billion-plus segment.

Knakal noted a “fantastic” investment market in Manhattan that saw $16.8 billion in first quarter sales across 316 property transactions – a 17 percent increase in transactions from the previous quarter. He added that a lack of “large ticket” retail transactions are among the factors that led to a 4 percent drop in price per square foot in the Manhattan market.

The firm also pointed to a Brooklyn market that continues to be highly active after exceeding 2,000 properties transacted for the first time ever last year. Brooklyn set an all-time quarterly record with $2.3 billion in sales in the quarter – including five transactions above $90 million – representing 61 percent of all outer borough activity.

All other outer borough submarkets are trending below 2014 levels, however, and Cushman & Wakefield’s vice president of research Adrian Mercado said that outer borough transactions valued between $1 million and $10 million are on pace to decline by 15 percent this year.