Harlem tops Manhattan multi-family sales in Q3: report

Marcus & Millichap downtown data. Click to enlarge
Marcus & Millichap downtown data. Click to enlarge

Harlem had the most multi-family property sales of any neighborhood in Manhattan in the third quarter, more than double year-over-year, according to a quarterly report from commercial brokerage Marcus & Millichap provided exclusively to The Real Deal.

Multi-family deals in Harlem climbed to 25 deals from 12 in last year’s third quarter, when the Upper East Side and Downtown tied for the most active markets, with 13 deals apiece. Overall, the number of Manhattan sales tapered slightly, to 84 from 87 year-over-year, down 3.4 percent. Washington Heights saw 11 deals in the third quarter, while the Upper East Side saw 10.

The average price per square foot below 96th Street was $890, a 2.9 percent drop from $917 the previous quarter. During last year’s third quarter, it was $729. Above 96th Street, the average price also slipped 7.1 percent, to $209 from $225 per square foot.

The four largest property sales were 5 West 91st Street in the Upper West Side for $27.5 million; 34-64 Hillside Avenue in Washington Heights for $26 million; 135-143 Haven Avenue in Washington Heights for $23.3 million; and 3658-3666 Broadway in Harlem for $23 million.

Of the 25 Harlem buildings sold, five were part of a portfolio purchase and three were distressed.

“This year, we are seeing several portfolios that were accumulated five or six years ago being split up,” Peter Von Der Ahe, vice president of investments, told The Real Deal. “People aren’t as timid with their money.”

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Concern over cap rates has not deterred Manhattan investments, Von Der Ahe said.

“Many believe [the rise in interest rates] could instigate a rise in cap rates that ultimately undermines multi-family values and weakens returns,” Von Der Ahe said in the report. “The context of this prediction, however, is far more nuanced than the math may suggest, with many variables other than interest rates influencing cap rate movement.”

Twelve sales that each exceeded $20 million were recorded in the second quarter; this time around, there were 10. Based on contracts Marcus & Millichap has seen so far in the fourth quarter, the number of $20 million-plus sales is expected to increase by at least 35 percent compared to the third quarter, Von Der Ahe told The Real Deal.

The priciest multi-family sale Downtown was 70-72 Franklin Street, a nine-unit mixed-use Tribeca building, for $21.5 million. Also Downtown, a vacant three-unit 3,678-square-foot building at 193 Spring Street sold at $1,958 per square foot, or $7.2 million. In the East Village, an 84-unit building at 508 East 12th Street was sold in a portfolio purchase for $37.7 million.

In the Upper East Side, a nine-unit rental at 21 East 62nd Street and a multi-unit townhouse at 159 East 70th Streetbought by American Realty Capital CEO Nicholas Schorsch – sold at $2,414 and $2,841 per square foot, respectively.