For the month, New York City saw 38 multifamily transactions comprised of 47 buildings totaling $687.16 million in gross consideration. On a month-over-month basis, transaction and building volume increased 23% and 18%, respectively, while dollar volume slipped 8%.
Manhattan was a stand-out during the month, with the borough’s dollar volume accounting for a remarkable 60% of the City’s tally. The Bronx, meanwhile, registered across-the-board increases, while Northern Manhattan and Queens experienced light volume. Brooklyn, meanwhile, saw broad weakness, registering its second worst month of the year in terms of dollar volume.
In terms of pricing, The Bronx notched the largest gains when compared to the same period last year, with prices per square foot jumping 9.9% to $200 and prices per unit increasing 14.7% to $182,415. Also of note were Manhattan and Brooklyn cap rates, which compressed 0.3% and 6.4% respectively.
From a macroeconomic perspective, the Federal Reserve, as widely expected, raised short-term interest rates in December and is forecasting three more rate hikes in 2018. Unless U.S. growth picks up considerable steam and inflation firms, the Fed will likely continue on its slow-but-steady approach to interest rates increases.
Submarket Overview
Manhattan:
Manhattan had a banner month in October and led the City in dollar volume by a wide margin, registering $420.87 million in gross consideration. The borough’s 16 transactions and 22 buildings were the most for the sub-market this year, representing significant gains, both on a month-over-month and year-over-year basis.
While Manhattan dollar volume fell 12% month-over-month – coming off the biggest month of the year in September – it climbed 41% against the same period last year. The largest transaction during the month took place in Hell’s Kitchen, where a 152-unit elevator, mixed-use project-based Section 8 building located at 341-363 West 50th Street sold for $110.25 million, representing $735 per square foot and $725,329 per unit.
Northern Manhattan:
Northern Manhattan experienced light volume in October as just four transactions consisting of six buildings traded for $59.51 million This activity represented the second lowest dollar volume total and a tie for the lowest transaction volume of the year.
The sub-market saw across-the-board declines on a month-over-month basis, but managed a 9% gain in dollar volume when compared to last year. The largest sale of the month in Northern Manhattan took place in Washington Heights, where RCR Management purchased an 87-unit elevator building located at 825 West 187th Street for $33.48 million, or $426 per square foot.
The Bronx:
The Bronx saw stellar activity, registering large across-the-board increases as dollar volume nearly doubled from the previous two months combined. For the month, the borough saw seven transactions consisting of eight buildings totaling $107.48 in gross consideration, a month-over-month increase of 133% and 193% in transaction and dollar volume, respectively. On a year-over-year basis, dollar volume rose 96%.
A West Farms elevator building at 2103 Honeywell Avenue was the largest transaction of the month. The 196-unit building purchased by FBE Limited for $44.38 million translates to $245 per square foot, and more than $226,000 per unit.
Brooklyn:
Brooklyn underperformed in October, registering steep and broad month-over-month and year-over-year declines. The borough was the only sub-market that failed to see dollar volume gain against the same period last year. For the month, Brooklyn saw eight transactions consisting of eight buildings sell for a combined dollar volume of $58.43 million, ending five consecutive months with north of $100 million in gross consideration.
Notable sales included the $13.25 million sale of a 23-unit elevator building located at 218 25th Street in Sunset Park to Joel Weiner’s Pinnacle Group, a price that equates to $400 per square foot, and the $12.85 million sale of a 52-unit elevator building in Crown Heights, where the price for the building at 959 Saint Marks Avenue represented $255 per square foot and $247,000 per unit.
Queens:
Queens experienced another sluggish month in October, with only three transactions consisting of three properties that sold for a gross consideration of $40.87 million. Notwithstanding the weak activity, these numbers were substantially ahead of the prior month which saw only a single transaction take place.
The only sale of note during the period was a 113-unit elevator mixed-use building in Rego Park that sold for $31.5 million or $321 per square foot.
To view the full report, please click here: http://arielpa.com/report/report-MFMIR-Oct-2017
