NYC Multifamily Picks Up In Q3 As Dollar Volume Hits 2017 High At Over $2B
The New York City multifamily market picked up considerably in Q3, with dollar and transaction volume reaching 2017 highs as investors became more enthusiastic about the asset class. While sales volume remained lower on a year-over-year basis, the climb in activity positions the market to end 2017 strong.
After a tepid start to the year, the positive momentum that began late Q2 accelerated in Q3, with the market topping $2B in sales for the first time since Q4 2016.
“The multifamily investment sales market has noticeably bounced back from a sluggish start to the year, and appears to have turned an important corner,” Ariel Property Advisors founder and President Shimon Shkury said. “All signs indicate the market will close out the year stronger.”
From July through September, NYC had 122 multifamily transactions encompassing 188 buildings that totaled $2.22B. This represents a 14% increase in dollar volume, a 4% rise in transaction volume and a 32% decrease in building volume compared to the previous quarter. When compared to the same quarter in 2016, however, Q3 dollar, transaction and building volume declined 24%, 24% and 27%, respectively.
Ariel Property Advisors gave us a borough-by-borough breakdown of the Q3 NYC multifamily data.
Manhattan was a standout submarket in Q3, registering its strongest quarter of the year, and recording nearly as much dollar volume as the rest of the NYC multifamily market combined. In Q3, Manhattan had a dollar volume of $1.08B, a quarter-over-quarter gain of 120%. The number of transactions held steady at 30.
Several institutional level deals made up the bulk of these transactions. This included 980-996 Sixth Ave., the largest multifamily sale of the year so far. The 400K SF mixed-use building, known as The Vogue, sold for $320M, representing $800/SF and $944K/unit.
The Northern Manhattan market also posted impressive gains across all metrics. It was the only submarket to register increases in the number of sales year-over-year, with 24 transactions spanning 31 buildings.
Five sales above $20M helped propel dollar volume to $365M, the highest total in Northern Manhattan since Q4 of 2016. The largest sale of the quarter took place in Washington Heights, where Sugar Hill Capital Partners purchased a 95-unit building at 200 Haven Ave. for $41M, or $329/SF.
The Bronx had a mixed Q3, with gains in transaction and building volume, but declines in dollar volume. In total, the borough saw 24 transactions consisting of 49 buildings totaling $250M.
Paradise Management sold its eight-building, 232-unit portfolio for $34.7M, which translates to $158/SF and nearly $150K/unit.
Brooklyn’s 36 transactions in Q3 are the highest the borough has posted since Q3 of 2016, and a 29% increase from its previous quarter. But the borough’s $444M in dollar volume fell short of its Q2 total of $468M, and substantially lower than the $689M it had in Q3 of 2016.
In Bushwick, Cayuga Capital sold a recently completed 99-unit building at 626 Bushwick Ave. to Wildenstein & Co. for $51M, translating to $700/SF and over $515K/unit.
Queens’ activity was lackluster in Q3, showing sharp declines across the board. The submarket’s eight transactions were the fewest in a quarter since Q4 of 2011, and dollar volume fell below $100M for the first time since Q2 of 2014.
The most noteworthy sale was an 83-unit, two-building portfolio at 88-22 Parsons Blvd. and 89-21 153rd St. in Jamaica that sold for $20M.