New York City multifamily dollar volume in October surpassed $1 billion for the second consecutive month and only the fourth time this year, according to Ariel Property Advisors’ Multifamily Month in Review: New York City for October.
Dollar volume in the multifamily market reached $1.173 billion in October, a 59 percent jump from $735.818 million in October 2013, however, transactions declined 30 percent to 57 from 81 in October of last year, and building volume declined 12 percent to 99 from 113 during the same period. October followed an unusually robust September that recorded 74 transactions comprised of 151 buildings totaling $1.848 billion.
“The New York City multifamily market saw a strong kickoff to the fourth quarter and we’re expecting the year to end on a high note,” said Shimon Shkury, president of Ariel Property Advisors. “We’re aware of a number of major deals that are scheduled to close before December 31st and a multitude of new contract signings suggest that this momentum will carry into 1Q2015.”
The following is a breakdown of the October 2014 volume by submarket:
Northern Manhattan. Northern Manhattan led the city in multifamily volume in October as the sub-market saw 23 buildings trade across 14 transactions totaling $554.773 million in gross consideration. The $465 million sale of a 1,677 unit multifamily portfolio in East Harlem played a major part in October’s activity. The price translates to $245 per square foot and $277,608 per unit. In Washington Heights, an elevatored building located at 672-674 St. Nicholas Avenue transacted for $13.5 million, or $320 per square foot.
Manhattan. Manhattan saw a 19 percent increase in dollar volume year-over-year to $299.440 million as 14 buildings traded across 10 transactions. Of note, two mixed-use buildings located on the corner of 9th Avenue and 14th Street in Chelsea that sold for a combined $105 million, and includes some development rights. Investors are expecting major local attractions such as the High Line and Chelsea Market to continue to drive rents higher.
Brooklyn. Brooklyn experienced a solid month with 18 transactions comprised of 34 buildings totaling $168.079 million in gross consideration. A 46-unit elevatored building located at 1030 Carroll Street in Crown Heights sold for $9 million, which represents $220 per square foot and a cap rate under 4 percent. In East Williamsburg, a portfolio of three contiguous newly-constructed walk-up buildings at 168-172 Meserole Street sold for $15.25 million, which translates to just under $700 per square foot.
Queens. Queens saw 14 buildings trade across seven transactions totaling $116.503 million in gross consideration. The most significant deal was the $88.5 million sale of a newly constructed 214-unit elevatored building located at 12-27 Broadway in Astoria. The building sold for $613 per square foot, which represents a 40 percent increase from similar new construction buildings that sold last year.
The Bronx. The Bronx had a quiet month as it saw eight transactions comprised of 14 buildings totaling $33.875 million in gross consideration. In Bedford Park, a 55-unit walk-up building sold for $6.2 million, which translates to $113 per square foot. Another walk-up building in the Kingsbridge Heights section of the borough sold for $5 million, or $149 per square foot.
For the six months ended in October 2014, the average monthly transaction volume increased to 65 transactions per month. The average monthly dollar volume increased to $997.825 million.
The multifamily transactions included in the analysis occurred at a minimum sales price of $1 million, with a minimum gross area of 5,000 square feet, and with a minimum of 10 units.
More information is available from Mr. Shkury at 212-544-9500, ext. 11, or firstname.lastname@example.org. For a copy of the report, please see http://arielpa.com/newsroom/report-MFMIR-Oct-2014.
NYCHA has agreed to sell a 50 percent stake in nearly 900 Section 8 apartments to L+M Development Partners and BFC Partners, the WSJ reports. NYCHA and the developers will form a partnership that will own the properties but NYCHA will continue to own the land and retain the right to remove the developers from managing the properties if dissatisfied. NYCHA will receive $150 million initially from the developers, another $100 million over the next two years, and an additional $100 million in revenue over the next 15 years. The developers will invest $100 million to renovate the complexes, which are located in the Bronx, Brooklyn, and Manhattan, and will be able to sell tax-exempt bonds and use federal tax credits under a 30-year agreement.
City Planning Commissioner Carl Weisbrod said capital budget requests from city agencies are being reviewed by the de Blasio administration through the lenses of “equity, growth, resiliency, sustainability, and geographic coordination,” Crain’s reports. The goal is to encourage development in underused areas near mass transit and to ensure that the infrastructure including schools, open space, sewers, the transportation network, and libraries can accommodate population growth. The commissioner identified the neighborhoods of East New York, Coney Island, the eastern half of the Bronx, and the Sunnyside rail yards in Queens as possible areas for growth.
The city’s proposal to upzone a new Bronx neighborhood called “Cromwell Jerome” and target it for affordable housing development has been met with resistance from some local residents, Next City reports. A recent outreach event conducted by the Department of City Planning was disrupted by protesters concerned that gentrification will price out longtime residents. Other barriers to development include the elevated rail line running down the middle of Jerome Avenue, which has pillars that make it difficult for pedestrians to cross the street, and the possibility that jobs will be lost if auto repair shops along the commercial corridor are forced to close.
Bronx Borough President Ruben Diaz, Jr. said he wants the borough’s housing policy to include new development for professionals and skilled workers who will leave the Bronx and “take their employment status and their salaries with them” if they aren’t offered housing alternatives, citylimits.org reports. “We don’t subscribe to the notion that gentrification has to be about pushing one community out to bring another one in,” he said, adding that there are a handful of people who oppose change and want the borough to stay as it was in the 1990s. Between 2005 and 2013, the share of Bronx households making more than $100,000 a year increased from 15 percent to 20 percent.
The president of the Chamber of Commerce in Sunnyside, Queens, and other local residents are circulating a petition opposing the development of Sunnyside Yards because the local infrastructure (subways and schools) won’t be able to handle the influx of new residents, the Sunnyside Post reports. Former Deputy Mayor Dan Doctoroff has proposed a 3.1 million-square-foot convention center over the rail yards with 14,000 residential units, half of them affordable. The chairman of Amtrak Anthony Coscia also said his company was considering developing sections of the yards.
Travel guide publisher Lonely Planet has named Queens as its top U.S. travel destination for 2015. In an article announcing the ranking, Lonely Planet praised the borough’s emerging hipness; global food culture that has produced a wide array of world cuisines for food lovers; its art scene that includes the Queens Museum and Museum of Moving Image; and the beaches of the Rockaways.
The Landmarks Preservation Commission has designated 40 blocks of Ridgewood, Queens, containing 990 buildings as part of the Central Ridgewood Historic District, Brownstoner Queens reports. “Representing a cohesive collection of speculative urban architecture, the row houses in the Central Ridgewood Historic District retain a high level of architectural integrity and represent an important part of housing development in New York City,” according to the Landmarks Preservation Commission. It is the third historic district for Ridgewood and the 11th for Queens.
Although no longer the domain of the counterculture and punk movement of the 1970s, the East Village still attracts a large share of young people with almost 40 percent of its 72,000 residents between the ages of 20 and 34, according to a NY Times profile of the neighborhood. Destination nightclubs, destination celebrity chef restaurants, and chain retailers have replaced local mom and pop shops in the neighborhood, which is bounded by 14th Street and East Houston, the Bowery, and East River. Rents in the area include studios from $1,850 to $2,300 a month; one bedrooms from $2,300 to over $4,000; and two bedrooms starting at $3,500 but typically more than $4,500.
Apple signed a long-term lease for a store at 247 Bedford Avenue in Williamsburg, Brooklyn, the NY Post reports. Renovations for the 20,000-square-foot store, which will be Apple’s first in Brooklyn, are expected to be completed in April 2015. An opening date hasn’t been announced.
The Elliman Report released its November rental report for Manhattan, Brooklyn, and Queens.
• In Manhattan, median rents rose 4.4 percent to $3,235 in November 2014 compared to November 2013, and average rents increased 2.6 percent to $3,993. Year-over-year, the listing inventory fell 11.4 percent to 5,426 and the vacancy rate fell to 2.31 percent. Year-over-year in the top 10 percent of the market, the number of new rentals increased 19.7 percent to 286, median prices increased 1.9 percent to $8,661, and average prices rose 2.2 percent to $10,585.
• In Brooklyn, median rents rose 5.3 percent to $2,948 in November 2014 compared to November 2013, and average rents increased 6.5 percent to $3,259. The listing inventory jumped 30.2 percent to 1,959 year-over-year.
• In Queens, median rents declined 8.2 percent to $2,525 in November 2014 compared to November 2013, and average rents declined 9.5 percent to $2,681. The listing inventory for November 2014 totaled 242.