The Real Deal New York

Dollar volume on multifamily sales nosedived in early 2017

Average price per transaction fell from $29M in Q4 2016 to $13M in January and February: report
By Chava Gourarie | April 20, 2017 08:00AM

(Credit: Ariel Property Advisors)

February was a dismal month for New York City’s multifamily market, with relatively few trades throughout the boroughs and a drop in pricing in Manhattan. The low numbers reflect the uncertainty of the final months of 2016, with few properties going into contract in November and December, according to a report by Ariel Property Advisors.

There were just five multifamily transactions in Manhattan, one in Queens, and zero in Northern Manhattan. Brooklyn led the pack with 15 transactions, and the Bronx held steady at 10. Overall, 48 properties traded hands across 31 transactions in February for a total of $417 million, a 52 percent decline in dollar volume year-over-year.

While the number of transactions citywide dropped relative to the previous month, the average price per trade remained relatively flat at $13.5 million. Still, that’s a decline from an average of $29 million per trade in the final quarter of 2016 In fact, the number of trades in January and February equals the total transactions volume in the final quarter of 2016, but the dollar volume dropped by more than half across those transactions, from $3.5 billion to $1.5 billion.

Brooklyn accounted for just over 50 percent of the month’s dollar volume with 23 properties trading for $211 million, though that’s a 16 percent slide from the previous month. The largest transaction was the sale of an 11-story building at 475 Kent Avenue in South Williamsburg for $56 million. Israel-based Gaia Investment Corp. bought the 103-unit property, which was formerly a pasta factory, from Nachman Brach, paying $372 a square foot.

In Manhattan, the largest transaction was the $52 million sale of a 67-unit building in Kips Bay. Blackstone Group and Fairstead Capital sold the the 18-story building at 312 East 30th Street to Adam and Aaron Daniel’s A.D. Real Estate Investors. The property is one of a 24-building portfolio Blackstone and Fairstead bought from the Caiola family for $690 million in 2015. The transaction represented close to half of the total $108 million dollar volume in Manhattan.

The Bronx was close behind Manhattan in dollar volume, with 10 trades totaling $95 million— a 66 percent increase from the previous month. In the largest transaction, a 100-unit building at 1765 Townsend Avenue in Mount Hope sold to Black Spruce Management for $26 million.

The single Queens transaction consisted of a $3.3 million purchase of two walk-ups in Ridgewood, at 8-68 Woodward Avenue and 18-26 George Street. The properties combine to hold 18 units.

Last month, The Real Deal reported that lenders are growing more cautious over fears that the multifamily sector is overexposed.