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New York’s multifamily sales improve in Q3

Deal- and dollar-volume rise from Q2, but rent laws and pandemic still slow market

902 Drew Street and 400 East 58th Street (Google Maps)
902 Drew Street and 400 East 58th Street (Google Maps)

New York City’s multifamily investment sales improved in the third quarter compared to second quarter results, as the number of deals and total dollar volume both rose. But the July through September totals were still far below what they were at the same time last year.

In the third quarter, 56 multifamily sales totaled $738 million in the five boroughs, up from 47 sales for a total of $653 million, according to Ariel Property Advisors’ latest report. Average price per unit fell in Q3, however, to $223,000 from $282,000 in the second quarter.

The most recent numbers compare to Q3 2019, when there were 54 sales that totaled $877 million. Average price per unit in that quarter was $399,000, according to the report.

The pandemic continues to have an effect on the market, along with the state’s sweeping rent laws passed last year.

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“Buildings that are predominantly rent-stabilized units are trading a lot less these days,” said Shimon Shkury, Ariel Property president, attributing that to the year-old legislation. “Their owners are just keeping them for the most part and trying to figure out how to make strategic decisions.”

The fourth quarter could get a big dollar-volume boost from one deal that went into contract in the third quarter. KKR and Dalan Management are teaming up to buy Bruman Realty multifamily portfolio’s 1,275 rental units, which The Real Deal first reported. Bloomberg pegged the price at $860 million.

For the third quarter, major apartment transactions across the city included Preservation Development Partners’ $79 million purchase of Spring Creek Gardens Housing in Brooklyn. That 586-unit complex — 85 percent of the units are affordable — closed in July. The seller was Domain Companies.

Last month, SL Green sold 400 East 58th Street in Manhattan to A&E Real Estate Holdings for $62 million. The 16-story building consists of 126 units and 4,200 square feet of retail, according to PropertyShark.

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Affordable HousingSL Green