NEW YORK CITY—Queens real estate had a tremendous 2013 as the borough saw major multifamily transactions and a resurgent market for development sites drive big gains in sales and dollar volume, according to Ariel Property Advisors' Queens year-end sales report.
The borough saw 519 transactions consisting of 702 properties valued at approximately $2.8 billion. This translates to a 58% increase in transaction volume, a 66% increase in property volume, and a tremendous 46% increase in dollar volume compared to 2012, which saw 328 transactions comprised of 423 properties worth $1.9 billion. Nearly two-thirds of these transactions took place in Northwestern Queens.
In particular, the multifamily market took off in 2013, soaring 166% year-over-year to $1.4 billion and capturing a 49% share of the borough's investment property sales volume. There were 223 multifamily transactions in Queens comprised of 287 properties, a 39% increase in transactions and a 51% increase in the number of properties sold compared to 2012.
“Multifamily sales represented 2.5 times the amount of dollar volume seen in 2012 and nearly 3.5 times the dollar volume seen in 2011,” says Michael Tortorici, VP of Ariel Property Advisors. “As throughout the rest of the city, portfolio transactions played a major role in this jump. Multifamily buyers paid prices with capitalization rates as low as 4.5% for assets in stable neighborhoods with accessible transportation.”
For the year, average cap rates fell to 5.21% from 6.06% in 2012; average gross rent multiples rose to 11.16 from 9.29; the average price per square foot rose to $217 from $179; and the average price per unit increased to $185,408 from $136,918.
Development site sales took a 35 percent share of both the investment property transaction and dollar volume in Queens in 2013. Transactions of development sites in Queens increased 78 percent to 180 in 2013 compared to 2012, the number of development sites traded rose 55 percent to 249, and the dollar value of those trades increased 59 percent to $987 million.
“The end of the year saw the sale of several newly constructed, market rate residential rental properties in Astoria and Long Island City,” Tortorici continues. “Values for these assets reflected capitalization rates around 5 percent and prices per square foot exceeding $400. Such pricing metrics are in line with new construction transactions that took place in Brooklyn before the borough saw explosive pricing growth.”
Queens has several development initiatives in the pipeline that should add to this momentum and spur more development borough-wide. These include the recently announced Willets Point project near Flushing Meadows-Corona Park, Hunters Point South, Astoria Cove and the Five Points project in Long Island City.
Many investors also are beginning to search for medium-long term opportunities that are well positioned to benefit from the new Cornell Tech campus on Roosevelt Island.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
