Upper Manhattan multifamily sales jump 42% in 2016

A total of 304 rental properties traded for $2.8B
By Chava Gourarie | February 09, 2017 04:00PM

(Credit: Ariel Property Advisors)

Multifamily property sales in Upper Manhattan climbed an impressive 42 percent year-over-year in 2016, even as the number of deals declined, according to a new year-end report from Ariel Property Advisors.

Sales of multifamily properties totaled $2.8 billion for the year, up from $2 billion in 2015, the report shows. The 9 percent decrease in the number of transactions, from 334 to 304, was offset by several large portfolio deals.

There were six multifamily deals that exceeded $100 million in the area, the largest of which was the Isaac Kassirer’s $357.5 million purchase of the 47-building Dawnay Day portfolio in East Harlem. Fairstead Capital’s purchase of the 1,790-unit rent-stabilized Savoy Park in Central Harlem for $315 million came in at a close second.

The price per square foot climbed 7 percent to $361, while the price per unit rose from $273,000 in 2015 to $361,000 in 2016, a 16 percent jump, according to the report. Capitalization rate dropped for the seventh consecutive year, hitting 3.9 percent compared to 4.3 percent in 2015.

Multifamily sales accounted for 77 percent of investments sales in Upper Manhattan, which totaled $3.7 billion across all asset classes such as office and development sites. That represents a 40 percent increase compared to 2015, despite declines in transaction volume. There were 39 development sales totaling $450,000 in 2016, a 116 percent increase from 2015. Pricing for development sites rose to $228 per square foot.

The report also warns that residential supply entering the market in 2017 could potentially slow sales.