INSIGHTS | What Investors Need To Know About The New York City Housing Market For Q2
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What Investors Need To Know About The New York City Housing Market For Q2

May 18, 2020 – By Shimon Shkury, President, Ariel Property Advisors

As multifamily investors look for data and insights on the industry in the midst of uncertainty, 2020 Q1 data and the effects of the early stages of the pandemic are shedding some light on what to expect. There will be greater clarity in Q2 on just how much the lockdown and high unemployment rates are affecting sales transactions and other important figures, such as rent collections, but for now the Q1 data from my firm—Ariel Property Advisors—is actually showing greater stability in some areas than many may have thought. Here’s what you need to know.

Shimon Shkury,
President and Founder,
Ariel Property Advisors


Early Returns on Covid-19

Remember that the New York State on PAUSE order went into effect on March 22, so any Q1 data you see anywhere for real estate transactions is not going to be greatly affected by the pandemic. That stated, there’s no getting around the fact that transaction volumes in the New York City multifamily market will be significantly affected by Covid-19 in Q2, and we’ll see the full picture by the end of Q3. Already in April, there is minimal activity for this asset class and the same will likely be true in May and June into Q4, as buyer hesitancy is to be expected in a recovering economy.

There are some encouraging numbers, though. During the month of April, the multifamily sector has seen better collections compared to any other asset class. Free market multifamily units across the board reported high collection levels of 80% to 90%, while rent-stabilized units ranged anywhere from 50% to 75% and Section 8 (i.e. government subsidized housing) collections were not affected, as the majority of the payment comes from the government and relief is available, even during normal times.

In Q1, the New York City multifamily sector grossed $1.71 billion across 74 transactions including 116 properties, a 30% decrease in dollar volume from 2019 Q4. However, the numbers are skewed by Brookfield Properties’ East Harlem Portfolio, which sold for $1.16 billion in October 2019. With that deal removed, sales dollar volume actually rose by 35% and transaction volume rose by 19%, while building volume decreased by 24%. Year-over-year metrics (i.e. 2019 Q1 vs. 2020 Q1) dollar volume and transaction volume have remained relatively flat, showing stability.

Manhattan Below 96th Street

Manhattan below 96th Street achieved the highest dollar volume in 2020 Q1, grossing $707.6 million. This accounts for 41% of total dollar volume traded across all geographical submarkets in the city. Dollar volume rose by 232% compared to last quarter, while transaction and building volume dropped 6% and 23% respectively. Invesco’s sale of Midtown luxury high-rise 10 East 29th Street for $380.6 million ($934 per square foot) did skew that dollar volume upward, though.

Year-over-year, the dollar volume was flat as transaction volume fell by 29% and building volume fell by 43%. There was a dearth of small to mid-size deals for fewer than $40 million. In 2019 Q1 there were 19 such transactions, but only 9 in 2020 Q1.

Northern Manhattan

Northern Manhattan demonstrated stability, reaching $250.6 million in dollar volume, a stark 630% increase year-over-year. Accounting for the Brookfield Properties sale, dollar volume was actually flat compared to 2019 Q4. Northern Manhattan recorded 10 transactions, which is consistent with 2019 Q4 and 6 more than 2019 Q1.

The most notable sale was the 14-building Irgang Group Portfolio, nine of which were in East Harlem. The assemblage sold for $74 million to the Neighborhood Restore Housing Development Fund, which partnered with the City of New York in an effort to use the 235 units to provide housing for the homeless.


The Bronx was also stable, seeing a rise in dollar and transaction volumes compared to last quarter. The borough grossed $115.7 million across 15 transactions, a 9% and 50% rise in dollar volume and transaction volume, respectively, from Q4. Year-over-year, however, dollar volume decreased by 25% and transaction volume fell by 6%. The almost-equal transaction volume suggests that The Bronx followed a similar sales pattern as last year, with the difference in dollar volume stemming from the $35.6 million 2019 Q1 sale of 3240 Henry Hudson Parkway.

The borough’s largest sale was the Morgan Group Multifamily Portfolio of three buildings in Morris Heights. The assemblage sold for $29.9 million ($160 per square foot).


Transactionally, Queens fared the worst this quarter, showing the lowest dollar and transaction volume of all other submarkets, with $83.5 million in sales across 9 properties, a 78% and 31% decrease, respectively, from last quarter. The borough also saw declines across the board when comparing year-over-year metrics: dollar volume fell 56% and transaction volume fell 25%. The only sale greater than $10 million in Q1 was 31-65 29th Street, which sold for $16.7 million ($424 per square foot) in Astoria.


Brooklyn was the most active of the boroughs and accounted for one third of total transactions in New York City. Brooklyn was especially encouraging, showing increases across the board from Q4. Total dollar volume grossed $549.5 million across 25 transactions including 42 buildings, which represents a 74%, 67% and 20% improvement respectively. Year over year figures, dollar volume fell by 10%, but transaction and building volume rose 39% and 75% respectively, indicating fewer institutional sales.

The borough’s biggest transaction was TF Cornerstone’s purchase of 250 North 10th Street in Williamsburg from TIAA-CREF for $137.75 million ($570 per square foot). Notably, TIAA-CREF sold the building at an 18% loss, down from the $169 million it paid for the property in 2015.


Purely from a numbers perspective, even before Covid-19, the New York State multifamily market was experiencing a slowdown, largely due to the Housing Stability and Tenant Protection Act of 2019. Still, the relative stability of the market in Q1 will not last into the Q2, even despite drastic measures, such as the lowering of interest rates to near zero by the Federal Reserve. Though as I wrote in my previous piece on real estate investment capital markets, there is funding available for the right deals, so it’s important to analyze your opportunities on a case-by-case basis and continue to monitor the market.


The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee the accuracy of any information provided herein. As an example, all zoning information, buildable footage estimates and indicated uses must be independently verified. Vacancy factors used herein are an arbitrary percentage used only as an example, and does not necessarily relate to actual vacancy, if any. The value of this prospective investment is dependent upon these estimates and assumptions made above, as well as the investment income, the tax bracket, and other factors which your tax advisor and/or legal counsel should evaluate. The prospective buyer should carefully verify each item of income, and all other information contained herein.