Manhattan Multi-Family Sales Jump in First Quarter

According to Ariel Property Advisors’ “Multi-Family Quarter in Review: New York City” report, New York multi-family sales increased 34 percent in the first quarter of 2012.

Image courtesy Flickr user Erik Daniel Drost

This story originally appeared in Multi-Housing News, the sister publication to Commercial Property Executive.

According to Ariel Property Advisors’ “Multi-Family Quarter in Review: New York City” report, New York multi-family sales increased 34 percent in the first quarter of 2012. The figures are also a substantial change over the fourth quarter of 2011, rising 11 percent.

“Things look positive in New York City in the multi-family market,” Shimon Shkury, president of Ariel Property Advisors, told Multi-Housing News, the sister publication to Commercial Property Executive. “We did a comparison between first quarter 2011 and first quarter 2012 and things have gone up substantially in that 12-month period.”

The report examined transactions in all five boroughs concerning properties over $1 million with 10 units and up.

For the first quarter of this year, there were 145 multi-family transactions in New York City, comprised of 222 buildings totaling $1.15 billion in gross consideration. Last year at the same time, there were just 108 multi-family transactions comprised of 137 buildings totaling $548.9 million in gross consideration.

Manhattan had 36 transactions, comprised of 62 buildings with a total value of $574 million in the first quarter of 2012, compared to 19 transactions, comprised of 23 buildings with a total value at $128 million in the first quarter of 2011. The average price per unit increased 52 percent compared to the first quarter last year.

“What the report shows is that demand is surging for multi-family assets in Manhattan,” Shkury says. “Manhattan’s dollar increases were tremendous, with a 350 percent change.”

Looking at the other boroughs, prices for multi-family buildings in Brooklyn are increasing at a faster rate than any other submarket, bringing in $170 million in the first quarter. Overall, Brooklyn had 41 transactions, consisting of 56 buildings, compared to 24 transactions, consisting of 33 buildings valued at $88.6 million the year before.

“Manhattan normally leads in the total volume of transactions, but this time around Brooklyn was No. 1 in terms of the number of transactions,” Shkury says. “In Brooklyn, first quarter dollar volume for multi-family properties nearly doubled and multi-family building sales were up a healthy 70 percent, compared to the same period of 2011.”

The next best producing submarket is Northern Manhattan, where the report shows that 26 transactions comprised of 42 buildings, valued at $167 million were made, compared to 25 transactions, comprised of 37 buildings valued at $103 million in the first quarter of 2011.

Queens improved significantly from the fourth quarter of 2011 with 16 transactions, made up of 22 buildings totaling $98 million in the first quarter of 2012, compared to eight transactions, consisting of 11 buildings totaling $69 million in the fourth quarter 2011, and 17 transactions, consisting of 17 buildings valued at $122.9 million in the fourth quarter of 2011.

Compared to the fourth quarter of 2011, things weren’t so positive in the Bronx, where its 26 transactions consisting of 40 buildings and $136 million was a decrease from the previous quarter, but still an increase year over year, when it only had 27 buildings totaling $105.7 million.

Shkury says that the first quarter of 2012 also saw four portfolio sales in Upper Manhattan, proving that investors are having more faith in the area and that banks are more comfortable with lending the money for such purchases.

“I think there is more private equity capital and institutional capital that is trying to place equity in risk-adjusted return assets,” Shkury says. “As the market continues to improve, we will see more selling and buying of portfolios. I think that is a trend that will continue.”