NEW YORK CITY—The Northern Manhattan investment property market experienced an exceptional 2016, with several sizeable deals pushing dollar volume to its highest level on record, according to Ariel Property Advisors' newly released 2016 year-end sales report for the area.

For the year, Northern Manhattan saw approximately $3.74 billion in gross consideration, a 40% surge versus 2015, while transaction and property volume fell 9% and 11%, respectively. The jump in dollar volume and modest decline in transaction volume was due primarily to a string of large-scale deals that took place during the year.

Particularly notable was the sale of the East Side 47 Portfolio, also known as the “Dawnay Day” package. The portfolio of 47 buildings in East Harlem sold for over $357 million, making the transaction one of the largest multifamily deals throughout the city in 2016. The 713,000-square-foot portfolio, which was arranged by Ariel, encompassed nearly 1,200 units.

“The market in 2016 was ripe for sellers to offer up the type of scale that attracted institutional level equity,” says Victor Sozio, EVP at Ariel Property Advisors.

Large deals reigned supreme in the submarket. Of the seven transactions trading for more than $100 million last year, six were multifamily properties located in Central Harlem, East Harlem, and Washington Heights.

In fact, activity in these three neighborhoods captured more than 77% of Northern Manhattan's dollar volume in 2016. Many of the institutional-level deals transacted at high pricing metrics, driving pricing for the sub-market higher across the board, with the price per unit rising 16%.

While transaction volume for development properties dropped 11% to 39 in 2016, dollar volume for this asset class surged 116%, mostly because of two deals that accounted for 43% of total development sales for the year.

These trades include Delshah Capital's $111.5 million purchase of 30 Morningside Dr. and the Durst Organization's $90.5 million purchase of 1800 Park Ave. Overall, development pricing rose nearly 15% to $228 per buildable square foot.

The slowing of development sales last year was partly driven by the expiration of the 421-a tax exemption program in January of 2016. New York Governor Cuomo included a replacement for 421-a, dubbed “Affordable New York,” in his official 2017-18 budget.

“Development pricing in 2016 was largely driven by buyers underwriting sites as condo developments, and we expect the same for most of 2017 until the reinstatement of 421-a comes to fruition,” Sozio notes.

Meanwhile, user properties continued to play a prominent role in 2016, with 92 properties selling for more than $225.2 million in gross consideration, marking a 14% increase in dollar volume.

Looking ahead, the outlook for 2017 is more uncertain than it has been in recent years, with higher financing costs on the horizon. Nevertheless, interest rates remain historically low, which should continue to foster strong demand in the borough. Click here to read the full report.

NEW YORK CITY—The Northern Manhattan investment property market experienced an exceptional 2016, with several sizeable deals pushing dollar volume to its highest level on record, according to Ariel Property Advisors' newly released 2016 year-end sales report for the area.

For the year, Northern Manhattan saw approximately $3.74 billion in gross consideration, a 40% surge versus 2015, while transaction and property volume fell 9% and 11%, respectively. The jump in dollar volume and modest decline in transaction volume was due primarily to a string of large-scale deals that took place during the year.

Particularly notable was the sale of the East Side 47 Portfolio, also known as the “Dawnay Day” package. The portfolio of 47 buildings in East Harlem sold for over $357 million, making the transaction one of the largest multifamily deals throughout the city in 2016. The 713,000-square-foot portfolio, which was arranged by Ariel, encompassed nearly 1,200 units.

“The market in 2016 was ripe for sellers to offer up the type of scale that attracted institutional level equity,” says Victor Sozio, EVP at Ariel Property Advisors.

Large deals reigned supreme in the submarket. Of the seven transactions trading for more than $100 million last year, six were multifamily properties located in Central Harlem, East Harlem, and Washington Heights.

In fact, activity in these three neighborhoods captured more than 77% of Northern Manhattan's dollar volume in 2016. Many of the institutional-level deals transacted at high pricing metrics, driving pricing for the sub-market higher across the board, with the price per unit rising 16%.

While transaction volume for development properties dropped 11% to 39 in 2016, dollar volume for this asset class surged 116%, mostly because of two deals that accounted for 43% of total development sales for the year.

These trades include Delshah Capital's $111.5 million purchase of 30 Morningside Dr. and the Durst Organization's $90.5 million purchase of 1800 Park Ave. Overall, development pricing rose nearly 15% to $228 per buildable square foot.

The slowing of development sales last year was partly driven by the expiration of the 421-a tax exemption program in January of 2016. New York Governor Cuomo included a replacement for 421-a, dubbed “Affordable New York,” in his official 2017-18 budget.

“Development pricing in 2016 was largely driven by buyers underwriting sites as condo developments, and we expect the same for most of 2017 until the reinstatement of 421-a comes to fruition,” Sozio notes.

Meanwhile, user properties continued to play a prominent role in 2016, with 92 properties selling for more than $225.2 million in gross consideration, marking a 14% increase in dollar volume.

Looking ahead, the outlook for 2017 is more uncertain than it has been in recent years, with higher financing costs on the horizon. Nevertheless, interest rates remain historically low, which should continue to foster strong demand in the borough. Click here to read the full report.