NEW YORK, NY – August 4, 2022 – Investment sales dollar volume in Northern Manhattan totaled $433 million in 1H 2022, a 70% decline from 2H 2022 but 79% increase year-over-year, according to a research report produced by Ariel Property Advisors, Northern Manhattan 2022 Mid-Year Commercial Real Estate Trends. Transactions in the first half of the year also declined by 17% to 55 compared to the second half of 2021 but were 72% higher than the first half of 2021.
“Northern Manhattan investment property sales continued to recover on multiple fronts during the first half of 2022,” said Mike Tortorici, Founding Partner, Ariel Property Advisors. “Although dollar and transaction volume were down compared to a very transactional second half of 2021, activity and general sentiment rose significantly on a year-over-year basis.”
Mark Anderson, Director, Investment Sales, added, “Whereas the end of 2021 saw a few institutional-caliber transactions drive dollar volume, this half primarily consisted of small to mid-size multifamily transactions while only nine deals surpassed $10 million in gross consideration.”
The report’s findings include:
Multifamily. Northern Manhattan saw 37 multifamily transactions totaling $301 million in 1H 2022. For two consecutive halves, multifamily transactions in Northern Manhattan have been higher than all the transaction activity recorded since 2019, suggesting that sellers are more accepting of the multifamily pricing post-HSTPA. 1H22 cap rates improved by 30 basis points when compared to 2020 and 2021 figures but remained over 100 basis points above pre-HSTPA levels. Buildings that are predominantly free market that can benefit from the major rent increases are expected to be more resilient. However, rent-regulated properties with limited rent growth are particularly vulnerable going forward.
Development. The first half of 2022, saw relatively light transaction and dollar volume for development assets in Northern Manhattan, with 10 development deals totaling $71 million. The average price per buildable square foot fell to $155—down from the year-end 2021 average of $176, which was attributed to the relatively small sample size. Until it is resolved, the expiration of the Affordable New York (421A) tax abatement program is expected to have a negative impact on development site sales volume in Northern Manhattan, however, improving market fundamentals should lead prices to hold or see modest appreciation over the balance of the year.
To read the full Northern Manhattan report, please click here. To access reports for the other submarkets—Manhattan, the Bronx, the Brooklyn, Queens—and the Q2 2022 Multifamily Quarter in Review report, please click here.
