|Q4 stole Q1’s thunder, as banks and special servicers rushed to get deals done by the end of the year and other activity was spurred by an uncertain tax situation. Therefore, the first three months didn’t experience the same rush as the end of the year, we learned yesterday when we visited Massey Knakal’s Madison Ave office for its Q1 overview. Pictured are the firm’s number mavens—Michael Gembecki, Adrian Mercado, and Cory Rosenthal—who gave us the stats for a comparative analysis of where we are: NYC’s Q1 dollar volume was $3.9B, up 45% from Q1’ 10, but down 30% from the previous quarter. Overall, transactions varied market-to-market:|
- Manhattan (Sales $3B, up 40% from Q1 '10 and down 37% from Q4 '10. Majority of sales, by dollar volume: office buildings)
- Queens (Sales: $282M, up 103% from Q1 '10 and up 33% from Q4 '10. Majority: elevatored buildings)
- Brooklyn (Sales: $324M, up 103% from Q1 ’10 and up 33% from Q4 ’10. Majority: walk-up and elevatored apartment buildings)
- Northern Manhattan (Sales: $61M, down 48% from Q1 ’10 and down 13% from Q4 ’10. Majority: mixed-use buildings)
- Bronx (Sales: $147M, more than double Q1 ’10 and up 14% from Q4 ’10. Majority: development properties).
|In Manhattan, appetite for condo conversions are back, as seen at buildings like 607-09 Hudson Street, a former nursing home that developer FLAnk is turning into residential. Retail has been a big surprise, as evidenced by 666 Fifth Avenue’s $324M condo sale of the former NBA Store; we may possibly see trades into the several$1,000s/SF. Other trends to watch for this year: dollar volume of sales increasing 40% to 50% over ’10; a 4% increase in the number of buildings sold; a 50 bps compression in cap rates; an uptick indevelopment and land deals; and a 20% increase in office buildings’ price PSF. Among Massey Knakal’s concerns: direction of interest rates and a significant amount of shadow distress.|