Geopolitical Turmoil Fails to Derail Multifamily Sales Market

“Manhattan continues attracting investors from all over the world looking to take advantage of the market’s safe-haven status,” Shimon Shkury, president of Ariel Property Advisors, states in his firm’s second quarter report.

NEW YORK CITY—The multifamily market in New York City was robust and prices remained stable in the second quarter, according to brokerage firm Ariel Property Advisors. In fact, despite Brexit and other national and international political influences, investors continue to look for multifamily opportunities here. Multifamily sales experienced gains in year-over year dollar volume, despite modest declines in transaction and building volume. In its quarterly report, Ariel Property Advisors notes that New York City saw 174 transactions comprised of 288 buildings totaling $3.681 billion in gross consideration in the second quarter. That activity represents a 17% percent increase in dollar volume, a 19% decrease in transaction volume and a 23% decrease in property volume compared to the second quarter of last year, which saw 372 properties trade across 216 transactions totaling $3.144 billion in gross consideration. The second quarter results were relatively even with activity posted in the first quarter , with dollar, transaction, and building volume all trending within 10% of last quarter’s results. Pricing throughout the boroughs either held or showed slight appreciation by most measures. The six-month trailing averages show citywide average gross rent multiples up by 1.47 points year-over-year, the Ariel Property Advisors’ report states. “Manhattan continues to attract investors from all over the world, as both institutional funds and small investors alike look to take advantage of the sub-market’s safe-haven status,” Shimon Shkury, president of Ariel Property Advisors states in the second quarter report. “The $1.628 billion in multifamily investment this quarter is nearly equal to that of the first quarter of 2016, but a represents a significant 72% increase compared to the second quarter of 2015.” Manhattan recorded 42 transactions across 68 buildings in the second quarter, a 31% and 51% increase, respectively, compared to three months earlier. The most active neighborhood in the city was the East Village where 13 buildings traded in nine transactions. The Northern Manhattan submarket saw 26 transactions across 42 buildings, totaling $666.387 million in gross consideration, which represents a 45% increase in dollar volume and a 48% decrease in building volume compared to 2Q15. Brooklyn enjoyed an uptick in multi-property portfolios this quarter, as 90 buildings traded across 54 transactions totaling $807 million in gross consideration. In the second quarter, there were three trades of six or more properties, each in the $30-million to $50-million range. The average price per square foot in Brooklyn is now approaching $400 per square foot, compared to $300 a year ago, Ariel reports. The Bronx saw 36 transactions across 62 buildings, and $334 million in gross consideration during the second quarter, which represents a 29% decline in transaction volume, 21% decline in building volume, and 30% in dollar volume from the second quarter of last year. A host of large multifamily property trades helped spark a sharp rise in Queens’ year-over-year multifamily sales dollar volume. The borough recorded 16 trades across 26 buildings, and $245 million in gross consideration. Dollar volume was up 43% year-over-year and the number of units traded nearly doubled, from 577 to 1,088.