New York’s first-half investment sales numbers are in and they’re not pretty.
Sales volume from January through June totaled $9.65 billion — a decline of 45 percent compared to the second half of 2019, according to a new report by Ariel Property Advisors. Manhattan suffered the biggest dollar dip. It saw $5.6 billion in transactions in the first half of 2020, a 41 percent drop from the previous six months.
The number of transactions across the city fell by 35 percent over the same period, to 653 deals.
Uncertainty surrounding the pandemic “led to a sharp reduction in investment property transactions across most asset classes,” according to the report.
By percentage, Northern Manhattan led decliners. Dollar volume there tanked 77 percent, to $386 million. Queens dropped 63 percent to $744 million.The Bronx also suffered a 44 percent dip, to $436 million.
Brooklyn proved to be the most resilient borough with a sales total of $2.45 billion, a relatively small drop-off at 30 percent when compared to the other boroughs.
The report noted that the biggest deals to close during the first half — including Amazon’s $1 billion purchase of the former Lord & Taylor building and Munich RE’s $900 million buy of 330 Madison Avenue — went into contract before the pandemic hit.
That means the true impact of the Covid-induced economic shutdown on the sales market is likely even more severe than the numbers show.
“Since sales volume is light and since the vast majority of transactions covered in this report were put in contract pre-Covid-19, the length and depth of this downturn is unclear at this time,” the report read.
Before the virus hit, New York City’s investment sales market had already been experiencing several years of decline, after peaking in 2015. Changes to the state’s rent stabilization laws enacted in the middle of last year dealt the market another blow as activity in the multifamily market took a sharp decline.
Contact Rich Bockmann at [email protected] or 908-415-5229