The Real Deal New York

Google’s Chelsea Market purchase fuels rise in Manhattan I-sales dollar volume

Search company’s roughly $2.4B buy was second largest sale in city’s history
By Eddie Small | July 16, 2018 12:20PM

Sundar Pichai and Michael Phillips with Chelsea Market at 75 9th Avenue (Credit: Twitter and Google Maps)

Manhattan investment sales saw a sharp increase in dollar volume during the first half of 2018 thanks to an uptick in big-ticket deals, notably Google’s roughly $2.4 billion purchase of Chelsea Market.

Investment property sales totaled $11.4 billion across 236 transactions and 273 properties during the first six months of the year, according to a new report from Ariel Property Advisors. Although these represented declines of 1 percent for transaction volume and 4 percent for property volume compared to the second half of 2017, dollar volume shot up by 29 percent. All three metrics saw decreases of 6, 8 and 33 percent, respectively, compared of the first half of 2017.

However, there were more large-scale deals in the first half of this year than last year, with 15 transactions going for more than $100 million compared to nine in 2017.

The trend “demonstrates that while fewer properties have been sold, investors are willing to pay for better quality assets with stronger revenues and achievable upside,” Howard Raber, the director of investment sales at Ariel, said in a statement.

Midtown East has been the most popular neighborhood for property trades so far this year, with 49 transactions across 56 buildings worth $2.79 billion. In terms of dollar volume, Midtown West came in first place, with $4.92 billion across 30 transactions and 35 properties.

Multifamily sales made up 40 percent of transaction volume during the first half of the year, with 92 deals across 103 properties for $2.08 billion overall. This was an 11 percent increase in dollar volume, an 8 percent decrease in transaction volume and a 10 percent decrease in building volume compared to the second half of last year.

Office property trades accounted for roughly $5.5 billion across 15 transactions and 20 buildings during the first half of the year. These were respective increases of 119, 25 and 33 percent compared to the second half of 2017.

Development sites saw 39 deals across 54 buildings worth $1.13 billion during the first half of the year. This was a 37 percent decrease in dollar volume and an 11 percent increase in transaction volume compared to the second half of 2017, while property volume remained unchanged.

In addition to Google’s Chelsea Market deal, other notable sales during the first half of the year included A&E Real Estate Holdings$287 million buy of Stonehenge Village on the Upper West Side and Savanna Partners $640 million purchase of 5 Bryant Park in Midtown.