NYC Investment Volume Falls 50% in 2020

New York City investment sales volumes were devastated by the pandemic. At the end of the year, investment volumes fell more than 50% in the market, according to research from Cushman & Wakefield, totaling $22.1 billion. This is the lowest investment activity on record since 2010, the pit of the previous recession. Investment volumes in Manhattan, Northern Manhattan and the Bronx fell the most significantly, down 55% for the year. Investment volumes in Queens were down 43%, while Brooklyn fared the best with investment volumes down only 24% for the year, according to the Cushman report.

Decreased institutional investment was the primary reason for decreasing sales volume. Large sales greater than $75 million decreased 59% in 2020. However, sales activity rebounded at the end of the year. In the fourth quarter investment sales totaled $5.5 billion, up 24% from the third quarter and an impressive 48% from the second quarter.

Fourth quarter sales activity helped to offset losses earlier in the year. Research from Real Estate Board of New York in September reported investment sales volume down 54% for the year and a 32% decrease in transaction volume.

Sales volume was down across asset classes, but industrial, multifamily and land transactions were the most popular. On the other hand, retail transaction sales were down 74.3%, hotel sales were down 69.8% and office properties were down 65.1%.

In terms of leasing, the office space has been among the most impacted during the pandemic. In November leasing activity was down 55% for the month with only .79 million square feet in lease transactions in Manhattan that month. For the year, leasing volumes were down 80%, according to a report from Colliers International.

Transaction volume was also down, but not as significantly. There were 1,679 transactions in the market last year totaling 2,305 properties, a year-over-year decrease of 33%. Transaction volume plummeted in the second quarter with only 409 transactions. Activity increased in the third and fourth quarters with 560 properties sold, up 36.9% from the second quarter, and 571 properties sold in the fourth quarter, up 39.6% from the second quarter.

This illustrates a more significant decrease in pricing than transaction activity. Pricing for core product fell 15.1%, the lowest level since 2015. Multifamily and office pricing fell 7.9% and 13.7%, respectively, the lowest decrease of any asset class. Retail prices fell the most significantly, down 26.5% from year-end 2019.