“It was a big year for big deals,” says Michael Tortorici, EVP at Ariel Property Advisors. “This trend should continue as more and more institutional investors acknowledge the significant upside potential offered by properties in the borough.”

Northwestern Queens captured the lion's share of investment sales activity, with 64% of alltransactions, or 411, and 71% of dollar volume. The impending shutdown of the L-train in Brooklyn, and continuing integration of Hudson Yards, has the neighborhoods along the 7-train primed to see a shift in demographics and increase in average rent.

Multifamily properties were primary targets for investment in 2016, with dollar volume 39% higher than 2015, registering $1.95 billion in gross consideration. The increase occurred even as the number of transactions and properties traded fell, exemplifying that supply was unable to meet an insatiable demand for multifamily properties in the borough.

“Due to the room for rent growth, the wealth of transportation options, and overall stability of the neighborhoods, the multifamily asset class continues to play a pivotal role in the success of the borough's investment market,” says Daniel Wechsler, a director.

Noable multifamily transactions in 2016 include Madison Realty Capital's purchase of 62-60 99th St. from Treetop Development for $135.5 million and the sale of 41-29 41st St., a 50-unit elevator building in Sunnyside that sold for $14.5 million.

Queens saw 15% price growth in the multifamily segment overall in 2016, with price per square foot jumping 23% from $282 to $346. Additionally, price per unit rose to $283,588 from $235,030 the previous year.

On a year-over-year basis, the borough's gross rent multiple reached 15.44 compared to 14.27, while the capitalization rate fell to 4.27% from 4.71%.

The development market, meanwhile, continued its downward trajectory in 2016, with transaction volume down 13% from the previous year. The average price per buildable square foot rose to $185 versus $154 in 2015, skewed by the borough's two strongest neighborhoods for development, Long Island City and Flushing, which, along with Jamaica and Astoria, accounted for 51% of all Queens development transactions.

Separately, lack of supply caused commercial dollar volume to drop 19% on the year. The most significant commercial transaction of the year was Jamestown's sale of the Falchi Building to Savanna Real Estate for $257.5 million.

Looking ahead, the outlook for 2017 is more uncertain than it has been in recent years, but the outlook for the Queens multifamily market remains positive as tenants and landlords alike pursue the value offered by many neighborhoods in the borough, according to the report.

Strength in the labor market and gradually rising inflation pave the way for more tightening of monetary policy from the Federal Reserve, naturally leading to higher interest rates, Ariel's research points up.

“Nevertheless, rates remain historically low, the US economy continues to strengthen, and the borough's relative affordability all bode well for the Queens real estate market,” the firm says. “Furthermore, major infrastructure projects, and new demand coming from the 18-month shutdown of L-train, should buoy near-term growth in the borough.”

Tortorici: “Big deals should continue as more institutional investors acknowledge the upside potential offered by properties in Queens.”

NEW YORK CITY—Queens investment property sales jumped in 2016, with dollar volume reaching its highest level on record, and prices appreciating more than any other borough, according to Ariel Property Advisors' newly released Queens 2016 year-end sales report.

The borough's increased rental rates and relative affordability compared with other submarkets contributed to growing demand by investor's seeking prime assets within the “world's borough.” In fact, last year was a banner year for Queens, registering 643 transactions consisting of 897 properties totaling approximately $4.9 billion in gross consideration.

Dollar volume surged 11%, despite a 9% and 6% decrease in transaction and property volume, respectively, compared to 2015. Large transactions led dollar volume gains, with properties above $20 million increasingly captivating the attention of institutional investors.

For example, in 2011 and 2012, there were 6 and 11 such transactions, respectively, while in 2016, Queens more than tripled that amount, with 44 transactions in excess of $20 million.

“It was a big year for big deals,” says Michael Tortorici, EVP at Ariel Property Advisors. “This trend should continue as more and more institutional investors acknowledge the significant upside potential offered by properties in the borough.”

Northwestern Queens captured the lion's share of investment sales activity, with 64% of alltransactions, or 411, and 71% of dollar volume. The impending shutdown of the L-train in Brooklyn, and continuing integration of Hudson Yards, has the neighborhoods along the 7-train primed to see a shift in demographics and increase in average rent.

Multifamily properties were primary targets for investment in 2016, with dollar volume 39% higher than 2015, registering $1.95 billion in gross consideration. The increase occurred even as the number of transactions and properties traded fell, exemplifying that supply was unable to meet an insatiable demand for multifamily properties in the borough.

“Due to the room for rent growth, the wealth of transportation options, and overall stability of the neighborhoods, the multifamily asset class continues to play a pivotal role in the success of the borough's investment market,” says Daniel Wechsler, a director.

Noable multifamily transactions in 2016 include Madison Realty Capital's purchase of 62-60 99th St. from Treetop Development for $135.5 million and the sale of 41-29 41st St., a 50-unit elevator building in Sunnyside that sold for $14.5 million.

Queens saw 15% price growth in the multifamily segment overall in 2016, with price per square foot jumping 23% from $282 to $346. Additionally, price per unit rose to $283,588 from $235,030 the previous year.

On a year-over-year basis, the borough's gross rent multiple reached 15.44 compared to 14.27, while the capitalization rate fell to 4.27% from 4.71%.

The development market, meanwhile, continued its downward trajectory in 2016, with transaction volume down 13% from the previous year. The average price per buildable square foot rose to $185 versus $154 in 2015, skewed by the borough's two strongest neighborhoods for development, Long Island City and Flushing, which, along with Jamaica and Astoria, accounted for 51% of all Queens development transactions.

Separately, lack of supply caused commercial dollar volume to drop 19% on the year. The most significant commercial transaction of the year was Jamestown's sale of the Falchi Building to Savanna Real Estate for $257.5 million.

Looking ahead, the outlook for 2017 is more uncertain than it has been in recent years, but the outlook for the Queens multifamily market remains positive as tenants and landlords alike pursue the value offered by many neighborhoods in the borough, according to the report.

Strength in the labor market and gradually rising inflation pave the way for more tightening of monetary policy from the Federal Reserve, naturally leading to higher interest rates, Ariel's research points up.

“Nevertheless, rates remain historically low, the US economy continues to strengthen, and the borough's relative affordability all bode well for the Queens real estate market,” the firm says. “Furthermore, major infrastructure projects, and new demand coming from the 18-month shutdown of L-train, should buoy near-term growth in the borough.”