Queens I-sales bounced back in 2018 with big institutional deals

The Queens investment sales market spiked up significantly in 2018 from the year before, coming just short of 2016’s dollar volume.

Overall, the borough saw $4.67 billion of activity across 619 deals involving 779 buildings last year, according to a new report from Ariel Property Advisors. This was a 39 percent increase in dollar volume, but just a 7 percent increase in deal volume and a 2 percent increase in building volume from 2017. The dollar volume was slightly less than 2016’s total of $4.71 billion.

A few big deals in the multifamily market helped boost the borough’s dollar total, even as the number of multifamily trades declined.

“Since fewer properties were sold, large institutional-caliber acquisitions were a substantial driver behind these strong figures,” Ariel director Alexander Taic said.

The large increase in dollar volume was driven by a pair of massive multifamily deals, which made up 16 percent of the total. In August, Carlye Group broke the borough’s record for a rental building transaction, paying $284 million for the 1 QPS tower in Long Island City. And a month later, Blackstone acquired the Parker Towers rental complex for $475 million.

The multifamily sector was the most active with 295 sales across 325 buildings for a total of roughly $1.80 billion. This was a 51 percent increase in dollar volume, a 10 percent increase in deal volume and a 7 percent decrease in property volume compared to 2017.

Development sites weren’t far behind, with 197 sales totaling $1.70 billion, a 19 percent increase in dollar volume and a 15 percent increase in deal volume. Development opportunities in the area received a further boost from Amazon’s HQ2 announcement for Long Island City.

Northwestern Queens, which includes Long Island City as well as Astoria and Sunnyside, was once again the most active submarket, accounting for 75 percent of the dollars paid and 60% of the deals made in the borough.

As was the case with the Bronx, Brooklyn and northern Manhattan, Ariel saw mixed signals for Queens in 2019, with Opportunity Zones likely to boost the market on the one hand, and the expiration of New York’s rent regulation laws slowing down deals on the other – though buildings with mostly free market units could also see more demand as a result.

“Queens is primed to reap the benefits of the Opportunity Zone program with 63 census tracts, or regions, located throughout the borough,” Ariel’s Taic said.