Though the number of deals dropped slightly last year, the value of multifamily property sales in Queens jumped an impressive 39 percent year-over-year, according to a report from Ariel Property Advisors.
Sales of multifamily properties in 2016 totaled $1.9 billion, up from 2015’s $1.4 billion, the report shows. That increase is despite the minor drop in the number of deals done year-over-year— from 329 to 312 — is evidence that demand is significantly outpacing supply in the borough, the report notes.
Another notable deal was the sale of 41-29 41st Street, a 50-unit building in Sunnyside. Carlo Coco’s J.C. Management sold the six-story building to Astoria-based landlord Harry Ottoman of Nocor Management for $14.7 million.
Rents have been on the rise since 2012, and saw a 15 percent increase overall in 2016. The price per square foot jumped from $282 to $346, while the price per unit rose from $235,030 in 2015 to $283,588 in 2016, according to the report. The capitalization rate dropped to 4.3 percent last year, compared to 4.7 percent in 2015. The report posits that rents will continue to climb along the 7-train line due to the impending L-train shutdown and the continued growth of Hudson Yards.
Investment sales on the whole saw an 11 percent increase in dollar volume, rising to $4.9 billion. The number of transactions dropped 9 percent to 643 in 2016, but the higher number of sales above $20 million helped make up the difference.
“It was a big year for big deals,” Michael Tortorici, executive vice president at Ariel Property Advisors, said in a statement. “This trend should continue as more and more institutional investors acknowledge the significant upside potential offered by properties in the borough.”
Looking ahead, the report warns that the threat of possible interest rate hikes and more residential supply entering the market could potentially slow sales.