Multifamily Sales Up in New York in Q2

By Dees Stribling, Contributing Editor

New York—The number of New York City multifamily building sales increased 18 percent in the second quarter of 2014 compared to the same quarter in 2013, but the dollar volume of those trades rose a modest 1 percent, according to the most recent Ariel Property Advisors quarterly report on the city’s multifamily market. During Q2 2014, 328 multifamily buildings traded citywide in 174 transactions totaling $2.137 billion, compared to 277 buildings selling in 174 transactions totaling $2.106 billion in Q2 2013.

Not all of the boroughs saw an uptick in sales. Trading activity in Manhattan south of E. 96th St and south of W. 110th St. declined in Q2 2014 year-over-year to 31 transactions involving over 50 buildings, totaling $666.6 million, a transaction drop of 26 percent and a dollar volume drop of 32 percent. Ariel posits that owners are withholding assets from the market because they cannot find suitable replacements for Manhattan assets, which many consider to be among the safest investments in the world.

Nonetheless, several large Manhattan transactions did take place during the quarter, such as a 144-unit asset located on 10th St. in the West Village, which sold for $68.17 million. The new owner plans to reposition the asset by increasing the size of the units.

Considered as a separate entity, Manhattan north of E. 96th St. and W. 110th St. saw 70 buildings sell in 33 transactions totaling $327.9 million, which is a 6 percent increase in transaction volume, and a 26 percent increase in dollar volume compared to a year earlier. Of note, Yeshiva University sold a 10-building portfolio to Cammeby’s International for $72.5 million, which represents roughly 22 percent of the dollar volume that traded in the second quarter.

Portfolio and institutional sales in Brooklyn drove the 86 percent increase in multifamily dollar volume to $578.8 million, and the 34 percent increase in building volume to 95, during the second quarter of 2014 compared to a year ago. Notable sales included two newly constructed buildings located in Bushwick and East Williamsburg that sold for $58 million and $35.6 million, respectively. These sales illustrate the borough’s appeal, according to Ariel, because both sold for well over $550 per square foot.

In Queens, multifamily transactions declined year-over-year by 13 percent to 13 trades, and the dollar volume declined by 71 percent to $81 million in Q2 2014. A newly constructed 56,000 square foot mixed-use property in Jamaica sold for $15 million, or $268 per square foot. The area surrounding Downtown Jamaica appears to be gaining positive momentum in the wake of BRP Cos. announcement of a $225 million investment in the area.

As for the Bronx, the borough had more transactions and buildings trade in the second quarter 2014 than any other submarket, the report noted, with large portfolio sales continuing to drive most activity and single-asset trades also picking up. Transactions increased by 49 percent to 52 in Q2 2014 compared to Q2 2013, and the dollar volume jump 77 percent to $483 million. One mixed-use asset, 1770 Grand Concourse, sold to Goldfarb Properties for $27.75 million, or $207 per square foot, demonstrating the submarket’s strong pricing.