The Five Biggest Numbers From NYC Development In Q4 2015
Last quarter was big for NYC real estate, with a red-hot ultra luxe market in Manhattan delivering strong sales and Brooklyn beginning to turn the corner from a secondary market to a destination in and of itself. Here are the five most impressive numbers from Q4 2015.
5. New Development Sales Up 28% From Q3 In Manhattan
Total new development sales volume shot up to $1.95B from $1.52B in Q3 2015. That’s due in large part to several ultra luxury developments finally hitting the market, like the 104-unit 432 Park Ave tower (pictured), which is slated to finish construction later this year and just started closing units last month.
MNS CEO Andrew Barrocas, who provided Bisnow the data in this piece, says that, in general, the ultra-luxe segment of the market was the driving force behind Manhattan real estate last quarter.
“The last two or three years, most of everything that’s been planned and sold has skewed heavily toward that side of the market,” Andrew says. “So now you’re seeing these exorbitant numbers because it’s really only one asset class that’s gotten all the attention on the residential side of things.”
4. Largest Quarterly Upswing: Gramercy Park
Gramercy Park saw the average price of sales go up from $1,534/SF in Q3 to $2,395/SF in Q4. The median sales price also jumped to $3.2M from $1.2M last quarter.
Andrew attributes those numbers to developments like 400 Park Ave South and The Residences, both of which just went on the market. Gramercy Park’s hot streak is likely to be maintained by projects like Gramercy Square, a four-building, ultra luxe development from Chetrit Group, Clipper Equity and the Read Property Group built on the site of a former hospital, which hits the market later this year.
3. Year-Over-Year Price PSF Up 25.5% In Brooklyn
Andrew says late last year marked a turning point for Brooklyn, with a number of high-profile developments finally bringing the borough into its own as a first-rate destination.
“The level of sophistication, both of buyers and developers, has really increased in the last year or two” in Brooklyn, Andrew says. “Brooklyn is no longer a secondary market.”
Andrew says that while future quarters might not see the same year-over-year jump as Q4 2015 did, he nonetheless expects price per SF to continue ticking upwards as the year unfolds.
2. Upper West Side Has Most New Development Sales
The Upper West Side accounted for 21.5% of all new development sales in Manhattan last quarter. That’s due in large part to Extell’s new One Riverside Park, which sold a total of 85 units at a median price of $2M late last year despite the “poor door” controversy.
The single largest new development sale in the city last quarter was also in the UWS: Apt. 54B at Extell's 157 West 57th St (pictured), which sold for a whopping $34M.
1. Year-Over-Year Median Sales Price Up 25.18% In Manhattan
Again, Andrew sees this as the result of a market awash in ultra luxe units last quarter.
“Certainly for the last year or two, it’s been very lopsided,” Andrew says. “I like to joke and say that, these days, ‘affordable’ in Manhattan means less than $2k per SF.”
Shimon Shkury, founder and president of Ariel Property Advisors, concurs, saying that demand at the ultra luxe level and an influx of equity led to a strong Q4 2015.
Andrew says as more affordable units, especially apartment-to-condo conversions, come online in the months ahead, the median sales price is likely to fall somewhat due to dilution, even if ultra luxe sales stay strong.
Expect that number to drop even further if the Treasury’s new rules on transparency in the ultra luxe market affect sales, as some market watchers have speculated, when they go into effect on March 1.