Sales activity in the city’s once high-flying multifamily market haven’t been this slow since the beginning of the decade.
The city saw $2 billion worth of activity across 75 deals and 110 buildings during the first quarter of 2019, according to a report from Ariel Property Advisors. This was a 22 percent drop in dollar volume, a 43 percent drop in transaction volume and a 50 percent drop in building volume compared to the first quarter of last year, and it was the lowest number of transactions in the city since the third quarter of 2010.
Shimon Shkury, president and founder of Ariel, attributed this slump largely to the uncertainty over how the state government plans to change current rent regulation rules when they expire on June 15. Legislators are discussing proposals including an end to vacancy decontrol, along with ending the Major Capital Improvements and Individual Apartment Improvements plans.
“Investors understandably stayed sidelined in the first quarter since some of the proposals could have a big impact on the market, with certain properties more vulnerable than others,” Shkury said in a statement. “We expect the second quarter of this year to be slow as well in anticipation of the new regulations.”
Manhattan saw $801.3 million worth of activity across 21 deals and 29 buildings during the first quarter, declines of 51 percent, 40 percent and 51 percent compared to the fourth quarter of 2018, according to the report. The largest deal was the Related Companies’ $260 million purchase of 450 Washington Street in Tribeca from the Jack Parker Corporation.
Northern Manhattan saw strong declines as well, with five deals across 13 buildings for $94.5 million. This was a 76 percent drop in transaction volume, an 88 percent drop in property volume and an 86 percent drop in dollar volume compared to the fourth quarter of last year. The top deal was the $18.25 million sale of 454 Fort Washington Avenue.
And things were no different in the Bronx, which saw 17 deals across 23 buildings for $140.5 million, respective quarter-over-quarter declines of 11 percent, 44 percent and 46 percent. The borough’s largest deal was the $23.85 million sale of 201 East 164th Street to the Lightstone Group from Sheridan Court Mews Associates L.P.
Brooklyn actually saw an increase in dollar volume with $688.7 million worth of activity, a 44 percent increase compared to last year’s fourth quarter. However, the borough’s transaction and building volume both still declined. Brooklyn saw 18 deals across 27 buildings for decreases of 18 percent and 39 percent. The jump in dollar volume was largely due to the Parkoff Organization’s $95.74 million purchase of five buildings in South Brooklyn, the quarter’s largest overall portfolio sale.
Queens also saw activity go up in one category, with its 14 deals representing a 17 percent increase compared to the previous quarter. The deals took place across 18 buildings and were worth $279.76 million, respective declines of 10 percent and 66 percent. The borough’s largest deal was the $75 million sale of 31-57 31st Street in Astoria from Mega Contracting Group and Treeline Companies to HUBB NYC Properties.