Demand for Manhattan investment properties fell in the first half of 2016, although buyers were willing to pay a higher price per square foot for multifamily buildings and development sites, according to a mid-year report from Ariel Property Advisors.
Buyers shelled out $19.3 billion for 361 investment properties in the borough, down 13 percent and 24 percent, respectively, from the same period last year. Manhattan saw its lowest number of transactions, with 304 deals inked, since the first half of 2013.
The multifamily market showed strength in pricing, despite a fewer number of sales in the first six months. Dollar volume totaled $4.2 billion, a 12 percent increase over the first half of 2015, while property volume slipped from 239 to 179 this year. Despite a decline in the number of sales, the average price per square foot rose from $936 to $960 year-over-year.
Office buildings and development sites were hit hardest by the drop in property volume. The number of sales for those types fell by nearly 50 percent year-over-year, although office buildings received a major boost in dollar volume from the sale of four properties each priced over $1.4 billion.
Development sites, similar to the multifamily market, saw an increase in price per square foot, even as other metrics fell. The average price per buildable square foot for development sites reached $618 in the first half of 2016, and deals including the $101 million sale of 144-155 West 47th Street exceeded this price.