The Real Deal New York

NYC multifamily sales fall below $4B in Q2

Fewer number of multifamily investment sales year-over-year
By Kyna Doles | July 21, 2016 12:45PM

(credit: Ariel Property Advisors)

(credit: Ariel Property Advisors)

There aren’t as many multifamily sales in New York City as there were this time a year ago, but when buildings trade they typically sell for higher prices, according to the latest report from Ariel Property Advisors.

Dollar volume in the second quarter of 2016 on multifamily sales totaled $3.7 billion, a 17 percent increase over the second quarter of last year, all despite a significant decline in the number of sales. In all, 288 multifamily buildings traded across 174 transactions during the second quarter of 2016, compared to 372 building sales over 216 transactions during the same period in 2015.

Ariel Property Advisors TRData LogoTINY noted similar trends in the first quarter of 2016, which saw $4 billion in sales volume but a 24 percent drop in the number of transactions than the same period the year prior. Compared to the first quarter of this year, dollar volume was down 8 percent.

Manhattan accounted for the largest share of dollar volume in the second quarter of 2016, with $1.6 billion in sales from 68 buildings and 42 transactions. The borough, excluding Northern Manhattan, had the greatest increase in dollar volume compared to the second quarter of 2015. Building and transaction volume was nearly identical to the same period last year, and jumped 51 percent and 31 percent, respectively, from the first quarter of this year. The East Village, which had 13 multifamily building sales, was Manhattan’s most active neighborhood in the second quarter.

Brooklyn once again held the largest share of building volume, with 90 sales across 54 transactions. Dollar volume totaled $807 million, below the $1 billion threshold it reached in the same period last year. The number of sales was also down compared to last year.

Williamsburg had more than $300 million in sales, making it the most active neighborhood in the borough in the second quarter of 2016. Notable deals include Equity Residential’s purchase of a newly-built rental building at 239 North 9th Street for $80 million.

Several pricey deals helped bolster Queens’ dollar volume to $245 million. Doug Eisenberg’s A&E Real Estate picked up the La Mesa Verde Apartments complex in Jackson Heights for $72 million and also purchased a five-building portfolio spanning Flushing, Corona and Richmond Hill for $54 million. The borough had 26 sales in 16 transactions, a decrease from both the prior quarter and year-over-year.

The Bronx was the only borough to see declines across all metrics compared to the first quarter and previous year. Multifamily building sales totaled $334 million on 62 sales and 26 transactions in the second quarter. Despite declining sales, the borough continued to show strengthening prices.

Veteran Cushman & Wakefield broker Bob Knakal said this week that today’s investment sales market is the “most confusing” he’s seen in nearly 20 years, noting that the number of overall sales are down but prices are climbing.