NYC May Investment Sales Volume Down 93% From Last Year

New York City
New York City

May was the worst month yet for New York City commercial real estate sales amid the coronavirus pandemic.

Investment sales volume was down 93% year-over-year in May, the Real Estate Board of New York’s monthly sales report shows. As a result, the tax revenue the city and state collected from real estate transactions dropped $145M year-over-year.

“This data confirms the unprecedented economic crisis facing our City and State,” REBNY President James Whelan said in a release. “Our local economy must reopen in a healthy way. We also need our public officials to put in place policies that will restart such economic activity rather than deepen the crisis.”

In May 2019, more than $3.3B worth of investment properties changed hands. In May, it dropped to just under $239M, a 59% drop-off from April, at the height of the pandemic in New York, when sales volume was just over $580M, REBNY found.

The state and city have lost a combined total of $160M in real estate tax revenue since the shutdown began in March.

Last month, REBNY released a report that showed the city lost 48% of tax revenue year-over-year in March and 64% of tax revenue year-over-year in April. That number was up 12 points in May, at 76%.

The city has projected that it will lose $7.4B in tax revenue this year with personal income tax taking a hit as well with so many New Yorkers out of work. While asking the federal government for $60B largely to make up for holes in the state budget as a result of the coronavirus, Gov. Andrew Cuomo expects to cut $6.8B of funding to municipalities. Real estate tax revenue makes up 53% of the overall city budget, according to REBNY.

Key economic and real estate players as well as those in city and state policy said that the federal government needs to step in to help New York out of its losses as it fights the coronavirus and loses tax revenue. New York's future relies on federal funding and a strong recovery plans, both of which still appear to be far off at this point, they said.

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