NYC multifamily market sees drop in deals, spending in Q3

Sales fell to $3.1B: Ariel Property Advisors

Ariel Property Advisors
Credit: Ariel Property Advisors

Multifamily investors purchased fewer New York City buildings and spent less in the third quarter of 2016, according to the latest report from Ariel Property Advisors. Spending on multifamily properties totaled $3.1 billion between July and September, down 15 percent from the second quarter and 18 percent year-over-year.

Sales especially took a hit in August, when the city took in only $575 million in deals and broke a several-month long trend of exceeding $1 billion. Most of the 284 sales and 178 transactions for the quarter consisted of small and mid-sized deals.

Josh Gotlib’s Black Spruce Management [TRDataCustom] struck the largest multifamily deal of the third quarter. The investment firm acquired a 14-building portfolio of rental buildings in Hell’s Kitchen for $110 million, which accounted for more than 10 percent of Manhattan’s total dollar volume for the quarter. Manhattan brought in a total of $972 million in multifamily sales from 71 sales. Dollar volume fell 43 percent year-over-year and and building volume was down 19 percent during this time. The number of sales and transaction volume rose slightly from the second quarter, although the price of those deals was smaller.

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Brooklyn struggled with shrinking sales in both July and August. Multifamily investors pumped more money into Williamsburg than any neighborhood in the borough for the sixth straight month and made the most transactions in Flatbush.Third quarter sales grossed $776.8 million, a 5 percent decline in dollar volume from the second quarter and 5 percent increase over the same period last year. Notable transactions from 80 total sales include 24-30 Rogers Avenue in Crown Heights, which sold for $14.2 million, and 335 Carroll Street in Gowanus, which traded hands for $27.2 million.

Queens continued to show year-over-year improvements, despite a dip in sales compared to the prior quarter. Dollar volume reached $326.6 million and rose 65 percent from the third quarter of 2015. Top deals for the three months include Zara Realty’s purchase of 51-25 Van Kleeck Street in Elmhurst for $21.1 million and the sale 47-46 40th Street for $15 million.

Meanwhile, multifamily sales picked up in the Bronx after a slower second quarter. The borough saw $351.8 million in sales from 54 buildings during the third quarter. Dollar volume rose 25 percent from the prior quarter, although it was slipped 17 percent year-over-year.