Broker holding a briefcase that says "We are hiring, explore available positions" with a blue arrow pointing to the righ
Client Access icon


Originally Published in

Forbes logo icon

NYC’s Q3 Numbers Show Increasing Clarity For Multifamily Investors

November 4, 2021

By Shimon Shkury, Ariel Property Advisors

NYC’s Q3 Numbers Show Increasing Clarity For Multifamily Investors

New York City’s multifamily market continued along the promising trajectory indicated by 2021’s first half. According to our firm Ariel Property Advisors’ most recent multifamily report, Q3 2021 showed increases of 20% in building volume and 6% in dollar volume despite five fewer transactions overall at 85 across 199 properties. These totaled $2.65 billion in dollar volume, of which the partial interest sale of the Starrett City Portfolio in Brooklyn comprised $1.3 billion alone. This institutional-sized transaction is a major indicator that clarity and confidence is returning to the multifamily market.

Shimon Shkury,
President and Founder,
Ariel Property Advisors


The Fundamentals

Migration to New York City earlier this year was registering at twice the rate of 2019 (looking at January and February)–a continuing trend that is contributing to a 42% increase in multifamily transaction volume, 83% in building volume and 10% in dollar volume when compared to Q3 2020.

August was a standout month this quarter. According to Elliman, there were 8,201 new lease signings, 64% higher than August 2020 and the highest level for one month since 2008. Much of this was due to a surge in demand for luxury housing in Manhattan, where new lease signings rose 63% year-over-year. Similarly, Brooklyn’s new lease signings rose 28% this August when compared to August 2020. The average vacancy rate lowered from 5.10% to 3.2% when looking at Manhattan, Northern Manhattan, Brooklyn, Bronx and Queens combined.

Investors’ underwriting anticipates a significant potential upside in the coming months as median rent has increased to roughly $3,210 from $2,957 in November 2020, though still substantially lower than the 2019 median rent of $3,600 in December 2019.

Manhattan (South of East 96th Street and South of West 110th Street)

Manhattan accounted for 19% of the total dollar volume and 24% of the total building volume in New York in Q3 2021—or $493.4 million and 48 buildings (dealt in 26 transactions over the quarter). Year-over-year figures reflect substantial increases with a 167% increase in property volume, 63% increase in transaction volume and a 199% increase in dollar volume. Following the trends set by the previous two quarters, price per square foot rose nearly 7% from $602 to $644. Cap rates also compressed from 5% to 4.75%, signaling a rise in prices and greater stability.

The borough’s largest transaction was A&E’s $133.5 million purchase of 400 E 57th Street from SL Green, another institutional investor. (400 E 57th spans 290,482 square feet and consists of 269 mixed-use units.)

Northern Manhattan (North of East 96th Street and North of West 110th Street)

Northern Manhattan remained steady this quarter, recording 11 transactions–two more than Q3 2020–and increasing its year-over-year dollar and building volume by 385% and 237% respectively. This dollar volume was positively impacted by Jay Group’s sale of 56 W 125th Street to HUBB NYC. This $105 million sale worked out to approximately $739,437 per uniacross 142 units, 46 of which are income-restricted. Additionally, the building’s retail portion is already fully leased, further bolstering Harlem’s 125th Street as one of the premier corridors in Northern Manhattan. The deal is also further evidence of developers’ and agencies’ renewed interest and confidence in the multifamily sector on the island of Manhattan.


Brooklyn contributed tremendously to the city’s dollar volume this month due to the Starrett City portfolio, a sale that totaled 55% of NYC’s total dollar volume, 88% of the borough’s dollar volume and 32% of the borough’s buildings volume. Rockpoint Group and Brooksville Partners increased their ownership stake, giving them full control of the portfolio, valued at $1.84 billion.

Altogether, Brooklyn saw 20 transactions totaling $1.47 billion, with the dollar volume increasing 479% from Q3. Without including the blockbuster sale, though, year-over-year metrics still reflect increases in building and transaction volume at 26% and 27% respectively, while dollar volume decreased by 35%. When compared to Q2 2021, transaction, building and dollar volume all declined by 14%, 22% and 29% respectively. Price per square foot modestly shifted from $339 to $335 year-over-year and cap rates remained relatively flat.


The Bronx distinguished itself as having the highest building volume among all submarkets at 61 buildings totaling $359.5 million in gross consideration across 20 transactions. Despite pricing metrics remaining level, the Bronx also saw a 135% increase in building volume, 273% increase in dollar volume and 43% increase in transaction volume from Q3 2020.

Increases can still be seen when juxtaposing this quarter with Q2 2021. Specifically, these are increases of 11%, 38%and 49% in building, dollar and transaction volume respectively. The largest and most notable sale in the borough this quarter was the $91 million sale of the Academy Gardens Portfolio in Clason Point, consisting of eight buildings spanning 376,218 square feet and holding 472 units. The sale price equates to $192,797 per unit.

Like Northern Manhattan, the Bronx has traditionally been led by the multifamily asset class and is experiencing a newfound surge in interest in affordable housing. This interest is being further encouraged by tax incentives such as the Lower-Income Housing Tax Credit and Article XI tax credits. Both are significant draws for developing affordable housing in the Bronx and will likely continue to have a significant impact as the city enters Q4.


Queens saw a 5% increase in dollar volume in Q3 2021 year-over-year, grossing $118.2 million over 8 transactions spanning 18 buildings. While dollar volume increased, the borough saw a 20% decrease in transaction volume from Q3 2020, as well as a 22% decrease in building volume. Queens also saw its year-over-year price per square foot increase 23% from $222 to $272 alongside a cap rate increase from 5.29% to 5.39%.

Jackson Heights saw the borough’s largest transaction this quarter with the $58.75 million sale of 35-64 84th Street and 80-01 37th Avenue, two mixed-use properties purchased by A&E Real Estate that was owned and managed by the Joseph Bruno Trust since their development almost a century ago. Totaling 217,262 square feet and housing 222 units, this transaction comprised nearly 49.7% of Queens’ total transaction volume.

Queens has the fewest multifamily buildings of all the boroughs, though recent activity shows that this may be changing as well. Zara Realty, for example, recently secured nearly $83 million in financing for a 233-unit project in Jamaica, while Elite Builders and Management also recently finished a 100% affordable project in the same neighborhood. Going forward, Queens may find itself as a major destination for the construction of more affordable housing, particularly as the city looks to deliver more units to meet demand.

The Takeaway

The multifamily market continued the positive trends of Q2. Looking ahead, Q4 is poised to be even stronger with US economic growth on pace to reach 5.9% in 2021 and 5% in 2022, resulting in the highest levels of growth since 1984, according to Goldman Sachs’ Q3 Investment Update. With higher volume across the board when looking at year-over-year levels and several institutional-sized deals taking place, it is increasingly safe to say that New York City is back and that Q3 represented a tipping point for the market.

More information is available from Shimon Shkury at 212.544.9500 ext.11 or e-mail

Insights Archive


About Us