This week we’re highlighting several positive economic reports out of Washington, the number of national retail stores in New York City, and updates on local development projects.
The U.S. economy added 203,000 jobs in November and the unemployment rate fell from 7.3 percent to 7 percent, the lowest level in five years. An increase of 27,000 manufacturing jobs brought that sector’s employment to above 12 million, the highest level in four years. Analysts pondered the effect the jobs report will have on the Fed’s $85 billion a month bond-buying program because Chair Ben Bernanke has said the central bank will consider a policy change when the unemployment rate falls to 6.5 percent.
The Commerce Department revised third quarter GDP upward to a seasonally adjusted annual rate of 3.6 percent from an earlier 2.8 percent estimate. The revision was the result of increased inventories, which analysts caution could reduce fourth quarter GDP figures. Aside from inventories, real final sales increased 1.9 percent and consumer spending increased 1.4 percent.
Overall construction spending in the U.S. rose 0.8 percent in October from September to a seasonally adjusted annual rate of $908.4 billion, which is the highest level since May 2009. The Commerce Department reported a 3.9 percent increase in public spending on construction in October from September, which is the largest increase since March 2004. Private construction fell a slight 0.5 percent from September.
The number of national retail stores located in New York City increased 0.5 percent to 7,226 stores between 2012 and 2013, which is the smallest year-over-year increase since 2008. Between 2012 and 2013, retail stores in Brooklyn increased 2.8 percent to 1,511; stores in The Bronx increased 1.6 percent to 863; stores in Staten Island increased 1.7 percent to 420; stores in Queens declined 0.4 percent to 1,653; and stores in Manhattan declined 0.7 percent to 2,779 because 24 shops in and around the South Street Seaport closed to make way for a new development.
A Manhattan Supreme Court Justice ruled that the city can proceed with plans to lease land to private developers at Manhattan public housing projects. The New York City Housing Authority conceived the proposal as a way to raise funds for capital improvements in its buildings. Another lawsuit is pending.
The YMCA of Greater New York cut the ribbon on a new 44,000-square-foot facility featuring a lap pool, family recreational pool, full-court gym, and multipurpose rooms at Surf Avenue and 29th Street in Coney Island. The Coney Island YMCA opened next to a new 195-unit affordable housing complex developed by ELH Management and Kretchmer Co., which was the Y’s partner for the new facility. When another YMCA opens in the Rockaways in January, the organization will have 24 locations in the city.
The city has selected TF Cornerstone to build the second phase of the Hunter’s Point South development in Queens. The two housing towers will include 1,193 new apartments—796 affordable, 100 for low-income seniors, and the remainder market rate. Amenities will include a fitness facility, rooftop gardens, and a pre-K.
Urban planners are discussing the future of SoBro, more commonly known as the South Bronx, which been attracting a steady stream of hipsters, luxury loft conversions, and new restaurants. The goal is to support a balanced approach to development before Williamsburg and Long Island City-type towers are built. In the 1970s, the borough lost 21 percent of its population, but added 52,458 residents in the last decade.
The Sunrise Cooperative, which represents 52 auto body businesses slated to be displaced by the Willets Point mixed-use development in Queens, is considering moving the businesses to the Hunts Point section of The Bronx. The group is negotiating with the landlord of a 150,000-square-foot warehouse. The City Council approved the Willets Point redevelopment in October.
Mayor Michael Bloomberg gave a farewell address that highlighted his administration’s accomplishments in the last 12 years. They include the Applied Sciences competition that has attracted world-class universities including Cornell, The Technion Israel Institute of Technology, Carnegie Mellon, and the University of Toronto. Giving the speech in Brooklyn, the mayor pointed out that 40 percent of all the jobs created since 2001 have been in Brooklyn and that “the investments we’ve made to revitalize the waterfront and promote arts and culture have helped turn Brooklyn into an international symbol of urban vitality.”
Archive for the 'Market Watch' Category
This week we’re highlighting several positive economic reports out of Washington, the number of national retail stores in New York City, and updates on local development projects.
This week we’re highlighting reports about the city’s vacant lots and stalled construction projects, mixed signals from the nation’s housing market, and a new development project in The Bronx.
Crain’s published a partial list of the more than 7,000 privately owned vacant residential lots it identified in the city’s five boroughs. Mayor-elect Bill de Blasio has proposed increasing taxes on vacant residential lots to encourage the development of affordable housing. Most of the vacant lots are located in Brooklyn and Queens, while the largest land area is in Staten Island.
The number of stalled construction sites in New York City fell 12 percent to 610 in November 2013 from 690 in November 2012, according to an analysis by the New York Building Congress. Of the projects, 232 sites are residential—115 multifamily and 94 one- or two-family homes. Forty-three percent of the stalled sites are vacant, which means developers have construction permits but haven’t begun work. Year-over-year, stalled projects dropped 26 percent to 90 in Manhattan, and fell 17 percent to 267 in Brooklyn. Stalled projects peaked at 709 in November 2010.
The number of building permits issued nationwide increased 6.2 percent in October from the previous month to 1,034, the highest level in more than five years, according to the Commerce Department. Permits for multifamily units increased more than 15 percent and single-family permits increased slightly. Additionally, the S&P/Case-Shiller index showed that in the country’s 20 major cities, home prices increased 1 percent in September from August, and 13.3 percent year-over-year.
Pending home sales in the U.S. declined for the fifth month in a row, according to the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator based on contracts not closings, fell to 102.1 in October from 102.7 in September, and 103.8 in October 2012. Reasons for the decline included the government shutdown in October, limited inventory, and falling affordability. Job creation and a relaxation of mortgage lending criteria, however, were seen as positive factors going into 2014.
The 30-year fixed-rate mortgage averaged 4.29 percent the week ending November 27th, up from the previous week when it averaged 4.22 percent. Last year, the 30-year fixed-rate mortgage averaged 3.32 percent.
Developers broke ground on Soundview Family Housing, an eight-story building that will house 120 families in 24 one-bedroom, 78 two-bedroom, and 18 three-bedroom affordable apartments in the Soundview section of The Bronx. The proposed second phase of the project, Soundview Senior Housing, will include 86 new units of affordable senior housing, and the proposed third and final phase of development will create 16 two-family market-rate townhomes. The development is a joint venture by CPC Resources, Inc. (CPCR), L+M Development Partners, Lemle & Wolff, and The New York Housing Partnership.
Gov. Andrew Cuomo praised the city’s unions for helping the city during the 1970s fiscal crisis and urged them to adjust their expectations when negotiating new contracts with Mayor-elect Bill de Blasio. The city has 152 union contracts that need to be negotiated along with demands for back pay. Gov. Cuomo also agreed with the mayor-elects’ goal of universal pre-k and afterschool programs, but opposes tax increases to pay for them.
This week we’re highlighting the October jobs report, latest Federal Reserve developments, the city’s balanced budget, and several new projects planned throughout the city.
New York City boasted a record 3.98 million jobs in October and the number of jobs in the city is expected to surpass four million by year-end, the State Labor Department reported. Since the depths of the recession, the city has added 313,000 jobs, an increase of 8.5 percent and more than double the number of jobs lost in the downturn. The city added 82,800 new private sector jobs in the last year alone. New York City’s unemployment rate rose to 8.7 percent in October, however, from 8.6 percent in September.
The Senate Banking Committee approved the nomination of Janet L. Yellen as the next chair of the Federal Reserve Board. She has served as the Fed’s vice chairwoman since 2010. If approved by the full Senate, Ms. Yellen is expected to support the policies created under current chair Ben S. Bernanke, who will step down as chair at the end of January. The Fed is reviewing how much longer it will continue its $85 billion a month bond-buying program, which has kept interest rates at record lows.
Mayor Michael Bloomberg announced a balanced budget for the remainder of FY 2014 and into the next Fiscal Year, which will begin on July 1, 2014. “Today – for the first time in the city’s history – the budget for an upcoming fiscal year already has been balanced for an incoming mayor, before he steps into office,” said Mayor Bloomberg. “This historic accomplishment is the result of New York’s continued economic growth, our administration’s fiscal discipline, and the significant savings we have achieved in recent months. And let me add that we have reached a balanced budget without proposing any tax increases or cutting essential services.”
The Manhattan Borough Board approved the joint venture between Hunter College and Memorial Sloan-Kettering Cancer Center to build a 1.15 million-square-foot, state-of-the-art Science and Health Professions complex along the FDR between East 73rd and 74th Streets. Hunter College will build a 400,000-square-foot structure to house its nursing and physical therapy schools and science research labs, and Memorial Sloan-Kettering will building a 750,000-square-foot, 23-story outpatient treatment center.
Carnegie Mellon University will open its fourth new applied sciences program in New York City as a part of the Applied Sciences NYC Competition, Mayor Bloomberg announced. An agreement between the city, Carnegie Mellon University, and Steiner Studios will create Carnegie Mellon University’s Integrative Media Program at Steiner Studios in the Brooklyn Navy Yard and will provide training in creative industries that integrate technology and the arts. The city’s Applied Sciences NYC initiative was created to expand the city’s top-tier applied sciences and engineering campuses to help spur economic growth and increase the city’s global competiveness.
South Street Seaport developer the Howard Hughes Corporation is proposing a 50-story hotel and apartment tower on the north side of Pier 17 that will serve as the “economic engine” needed to enable the rehabilitation of the Seaport’s historic buildings and piers. The developer also plans a marina between the apartment tower and the Brooklyn Bridge. The proposal will be reviewed by Community Board 1 and must be approved by the Landmarks Preservation Commission and City Council.
The New York State Public Authorities Control Board approved the $225 million proposal to build the National Urban League’s headquarters and the state’s first Civil Rights Museum on 125th Street between Adam Clayton Powell Jr. and Malcolm X Boulevards. Construction could begin in 2015 when leases for the current retail tenants expire.
Appraisals for Long Island College Hospital’s Brooklyn property have come in lower than expected—ranging from $228 million to $278 million, according to a WSJ article. SUNY Downstate Medical Center, which acquired LICH in 2011 and is responsible for its $500 million in liabilities, has been exploring selling the hospital to a new operator or a developer. The week of November 18, LICH had 25 patients and 1,400 paid employees. The hospital is losing $13 million a month, according to SUNY officials.
New York City’s multifamily market showed year-over-year gains across all metrics in September with the number of buildings sold and the dollar volume of the trades jumping 64 percent and 71 percent, respectively, according to Ariel Property Advisors’ Multifamily Month in Review for September.
For the month, transactions rose a modest 6 percent to 53 transactions comprised of 110 buildings totaling $657.281 million, compared to September 2012, which saw 50 transactions comprised of 67 buildings totaling $384.570 million.
Compared to the prior month of August, September showed a 7 percent increase in building volume, a 23 percent increase in dollar volume, and a 21 percent decline in transaction volume.
“Multifamily dollar volume remained strong in September, reflecting the significant number of institutional portfolio sales that took place during the month,” said Shimon Shkury, president of Ariel Property Advisors. “Additionally, we saw solid pricing metrics across all submarkets, particularly in Queens.”
The following is a breakdown of the September 2013 multifamily data by submarket:
Manhattan. With 14 transactions comprised of 43 buildings totaling $323.074 million in gross consideration, Manhattan led the month in transactions, buildings sold and dollar volume. One notable transaction consisted of a $71.5 million sale of seven adjacent buildings in Kips Bay at Third Avenue and 33rd Street. That price translated to nearly $772 per square foot and $464,000 per unit. Another notable trade was the $22 million sale of 357 West 45th Street, which translated to $554 per square foot and $271,000 per unit.
Brooklyn. Brooklyn had an active month with 13 transactions comprised of 20 properties totaling $121.718 million in gross consideration. JDS Development’s sale of 202 8th Street in Gowanus was a notable transaction that sold for $37.75 million, which translates to $669 per square foot at $740,000 per unit. Another was 180 Scholes Street, a 34 unit walk-up building in Williamsburg that sold for $18.5 million, or $352 per square foot.
Northern Manhattan. The multifamily market in Northern Manhattan saw seven transactions consisting of 21 buildings and $107.665 in gross consideration, a year-over-year increase in dollar and building volume, but a decline month-to-month. Portfolio sales continue to account for a significant portion of the activity uptown.
The Bronx. Multifamily transactions in the Bronx totaled 13 in September and the dollar value of those trades totaled $80.99 million. Three elevatored buildings located at 751 Gerard Avenue, 1014 Gerard Avenue and 2675 Creston Avenue sold for $21 million, which translates to $92 per square foot and $103,960 per unit. 283 East 234th Street sold for an impressive $3.825 million, which is $142 per square foot and $159,375 per unit.
Queens. Queens bounced back from a lackluster August with six sales totaling $23.834 million in gross consideration. Included in this was a prime, corner Astoria multifamily building located at 25-88 28th Avenue that sold for $3.334 million, or $312 per square foot. In Woodside, a 41 unit property sold for $6.25 million, which translates to $202 per square foot and $152,000 per unit.
Trailing 6-Month Sales Averages: The report’s analysis of the six months ended in September 2013 shows that in Queens the average cap rate dropped to 4.98 percent and the average gross rent multiple rose to 10.79 compared to 5.93 percent and 9.62, respectively, for the six months ended September 2012.
Also in this six month period, average monthly multifamily transaction volume ticked up to 60 transactions per month. For the third month in a row, the six-month average monthly dollar volume also went up, reaching $742.582 million in September.
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 email@example.com. For a copy of the report, please see http://arielpa.com/newsroom/report-MFMIR-Sep-2013.
A lack of City Council support prompted the Bloomberg administration to withdraw its Midtown East rezoning proposal. The Mayor’s office said that the failure to proceed will cost “hundreds of millions of dollars in badly needed subway and street improvements and $1 billion in additional tax revenue—as well as tens of thousands of new jobs that would have been created.” Mayor-elect Bill de Blasio supports the rezoning and plans to revisit the more contentious issues in the proposal when he takes office.
New York City’s business leaders are urging Mayor-elect Bill de Blasio to create a workforce development system that addresses the city’s jobs-skills mismatch, noting that in October, 73,000 mostly high-tech jobs were unfilled at the same time 80,000 New Yorkers had been unemployed for more than a year. The city has lost more than 100,000 middle wage jobs in the last decade and only 57 percent of the working-age population is employed compared to 71 percent in London, according to findings in the Partnership for New York City’s NYC Jobs Blueprint report.
New requirements designed to make buildings more sustainable following major storms have been approved by the New York City Council. Residential buildings five stories or higher must add faucets in common areas so that residents will have some access to water if the power goes out, and new and existing hospitals and nursing homes in flood zones must install hookups to enable a quick connection to temporary generators and boilers. The measures apply immediately to new buildings, but will be phased in at older buildings.
Commercial brokers in New York City reported increased confidence in the market in the third quarter, according to REBNY’s Overall Present Situation Index, which rose to 9.77 in the third quarter from 9.28 in the second quarter. The Residential Overall Confidence Index, however, fell to 8.33 in the third quarter from 8.71 in the second quarter because of concerns about the lack of new inventory for middle-class renters and buyers and political gridlock in Washington.
The average price of rentals in Brooklyn rose 12.6 percent to $3,119 and the rental price per square foot increased 25.5 percent to $43.57 in October 2013 compared to October 2012, according to the Elliman Report. In Manhattan, average year-over-year rents were flat at $3,862 in October, and the average price per square foot fell 5.8 percent to $49.71. Overall, the Manhattan vacancy rate was 2.42 percent, with the lowest vacancy rate–0.44 percent–uptown.
The MTA announced plans to sell a 555,000-square-foot site near the intersection of East Gun Hill Road and the New England Thruway in the Pelham Gardens section of the Bronx to developers. Grid Properties and the Gotham Organization responded to an RFP and plan to build 260,000 square feet of retail space and up to 100 units of senior housing provided they receive public financing.
Businesses in the Pelham Bay Merchants Association are working to strengthen the small business environment in Pelham Bay, which is located in the northeast section of the Bronx and borders the 2,772-acre Pelham Bay Park, according to a WSJ profile of the neighborhood. Several new retail storefronts, including a café, restaurants, a fitness studio, tutoring business, and a pet shop have opened in recent years and are filling a void in the community.
A $50 million, two-level retail development is being planned for a parking lot at the corner of 90th Avenue and 168th Street in Jamaica, Queens, by the Blumenfeld Development Group, which developed the East River Plaza shopping mall in East Harlem three years ago. In addition, a 24-story hotel that could open as early as 2016 will be built across from Jamaica’s transit hub. Local officials hope these projects will help revive interest in Jamaica, which was a shopping destination until the 1960s when the new Green Acres and Roosevelt Field Malls siphoned stores and shoppers from the area.
Synapse Development Group announced plans for a 65,000-square-foot complex on a land assemblage at 280 Meeker Street and 646 Lorimer Street in the Williamsburg section of Brooklyn. Plans call for a 65,000-square-foot building that will include a 100-unit hotel, ground floor retail, and a 10-unit residential building.
Developers have purchased a former tile company at 68 and 80 Third Street in the Gowanus section of Brooklyn and plan to convert the first two floors of the 80,000-square-foot property into retail hub for local and national stores. The remaining space would house offices. Whole Foods is opening a store several blocks away at the corner of 3rd Street and 3rd Avenue, and Hudson Companies developed condos several years ago across the street at 3rd Street and Bond.
This week we’re highlighting the October jobs numbers, third quarter GDP, New York City’s new mayor, and approvals by the Planning Commission for projects in Brooklyn and The Bronx.
The U.S. economy added 204,000 jobs in October and employment figures for September and August were revised upward by a total of 60,000, bringing average job creation for the last three months above 200,000. The unemployment rate rose to 7.3 percent from 7.2 percent in September, which reflects the 16-day furlough of federal employees during the government shutdown.
Real gross domestic product—the output of goods and services produced by labor and property located in the U.S—increased at an annual rate of 2.8 percent in the third quarter of 2013, according to the Commerce Department’s estimate. In the second quarter, real GDP increased 2.5 percent.
Public Advocate Bill de Blasio was elected mayor of New York City and is expected to adopt a pro-development agenda that would allow for the construction of more affordable housing. The mayor-elect proposes mandatory “inclusionary zoning” but in exchange would allow the construction of larger buildings.
The NYC Planning Commission approved development plans for the long-vacant, 750,000-square-foot Kingsbridge Armory, in The Bronx. The project will now go to the City Council for a final vote. The Kingsbridge National Ice Center is seeking to convert the space into the world’s largest indoor ice skating complex with nine rinks on two levels and one ice skating rink outdoors.
Two, 30-to-40-story residential towers in Greenpoint, Brooklyn, also were approved by the Planning Commission. Developer Park Tower Group received approval to build 700 of the 5,500 residential units (1,300 affordable) planned for Greenpoint Landing. The Chetrit Group received approval to build 720 units (200 affordable) in a separate project at 77 Commercial Street.
The City Planning Commission certified the 11 acre, mixed-use, Domino Sugar development in Williamsburg, Brooklyn, which will kick off the project’s public review process. Two Trees Management is planning to build four buildings and rehab and reuse the landmarked structure. The development will be divided into 2.3 million square feet of residential space, more than 500,000 square feet of office space, and 70,000 square feet of office space. Construction could begin as early as late 2014.
Many Downtown Manhattan landlords plan to erect portable walls as a defense against floodwaters like those Hurricane Sandy unleashed on their buildings last year. Properties at 110 Wall Street, 1 Battery Park Plaza, 80 Pine Street, 17 State Street, 180 Maiden Lane, 2 Water Street, 40 Fulton Street and some Port Authority buildings are planning to use seven-foot-high barriers manufactured by AquaFence, which can be stored when not in use. At 140 West Street, Verizon is planning to erect a nine-foot-high wall designed by Arcadis that will serve as a flood barrier if another storm hits.
The New York City Economic Development Corporation has issued an RFP seeking proposals to redevelop the now vacant 138,000-square-foot Bedford Union Armory at 1579 Bedford Avenue in Crown Heights, Brooklyn, into a financially feasible facility that will serve the community and provide job opportunities to local residents. Community recommendations have included public recreation space or a sports complex. Proposals from developers are due January 23, 2014.
The Huffington Post profiled 17 New York City projects that are planned or currently under development in New York City. Using before photos and architectural renderings of the projects after their completion, the piece highlighted the World Trade Center, Hudson Yards, the Cornell NYC Tech campus, Essex Crossing, and initiatives in Queens, The Bronx, Brooklyn, Staten Island.
This week we’re highlighting the Fed’s recent policy announcement, the latest National Association of Realtors’ report, and several new local developments.
The Federal Reserve voted to continue its monthly purchase of $85 billion in agency mortgage-backed securities and Treasuries and other accommodative policies to keep interest rates low, at least until the unemployment rate falls to 6.5 percent. The policymakers wrote that while labor conditions have improved, the unemployment rate remains high. The announcement also noted that fiscal policy has been a drag on economic growth and that while household spending and business fixed investment has improved, the recovery in the housing sector has slowed in recent months.
Pending home sales declined for the fourth consecutive month in September, as higher mortgage interest rates and higher home prices curbed buying power, the National Association of Realtors reported. The Pending Home Sales Index, which is a forward-looking indicator based on contract signings, fell 5.6 percent to 101.6 in September from a downwardly revised 107.6 in August, and is 1.2 percent below September 2012 when it was 102.8. The index is at the lowest level since December 2012 when it was 101.3. The data reflect contracts but not closings.
Chinese investors are buying distressed office buildings, hotels, and other commercial properties in New York City and other major U.S. cities, including Detroit. The Cassa Hotel, which was part of a bankruptcy proceeding, is an example of one of the investments in Manhattan. So far in 2013, Chinese investors have picked up $1.7 billion of property in the U.S., up from $1.1 billion in 2011, according to Real Capital Analytics Inc.
Since 2004, about 6,470 affordable apartments have been built in NYC market-rate buildings that received subsidies through zoning bonuses and tax exemptions, according to a WSJ article. The units make up about 13 percent of the new affordable housing units built as part of the mayor’s housing plan. Many housing advocates object to the benefits, however, the article said.
“A year after Hurricane Sandy… all major markets in the Lower Manhattan Central Business District have recovered and economic growth in the area below Chambers Street has continued to flourish,” according to a report by the Downtown Alliance. Office leasing is 22 percent higher than before the storm and 51 tenants have relocated to Lower Manhattan in the last year, signing deals for more than 1 million square feet. In addition, the asking rent for office space is up 16 percent year-over-year.
The New York City Council has approved a Staten Island waterfront development that will include a 625-foot Ferris wheel and an adjoining outlet mall and hotel. Other planned projects in the borough include converting a former poorhouse and hospital in Willowbrook into a retirement community, and building mixed-use apartments at Homeport, a 35-acre former naval base. In addition, Makerspace, a nonprofit business incubator has opened in the Stapleton section of Staten Island and is offering 16 studios to local craftspeople.
Mayor Michael R. Bloomberg and other officials broke ground on the new home of St. Ann’s Warehouse in Brooklyn Bridge Park, which will transform the vacant space into a venue for theater and community use. Other Brooklyn Bridge projects slated to begin in 2014 include, construction on the Main Street and John Street sections of the park, including new passive and active recreation space; Midtown Equities redevelopment of the the long-abandoned Empire Stores in the DUMBO section of the park; and construction on a new residential building designed by Alloy Development and Monadnock Construction in the John Street section of the park. Toll Brothers City Living has already begun construction on the Pier 1 development site.
New York City multifamily transactions increased 12 percent and the dollar volume of those trades jumped 57 percent in the third quarter 2013 compared to the same period in 2012, according to Ariel Property Advisors’ Multifamily Quarter in Review New York City Q3 2013.
New York City saw 172 multifamily transactions comprised of 329 buildings totaling $2.457 billion in gross consideration in the third quarter 2013 compared to third quarter 2012, which saw 153 multifamily transactions comprised of 213 buildings totaling $1.561 billion in gross consideration.
Third quarter 2013 figures represented a modest 1 percent increase in transaction volume, a 26 percent increase in building volume, and an 18 percent increase in dollar volume compared to the second quarter 2013, which saw 170 transactions comprised of 261 buildings totaling $2.074 billion in dollar volume.
Year-over-year, the six-month trailing averages showed cap rate compression, rising GRMs, and rising prices per square foot in all submarkets covered in this report.
“The third quarter report showed impressive year-over-year gains in volume and pricing,” said Shimon Shkury, president of Ariel Property Advisors. “We believe this momentum will continue through the end of the year, though we do not expect the fourth quarter to be as active as the fourth quarter of 2012, which experienced a selling frenzy due to the anticipated capital gains hike. In addition, the recent decline in interest rates from their summer peak should help sustain building prices in the near term.”
The following is a breakdown of the third quarter multifamily data by submarket:
Manhattan. A handful of institutional transactions, most notably the $600 million sale of a multifamily portfolio owned by Westbrook, pushed Manhattan’s third dollar volume up 36 percent compared to third quarter 2012 levels and up 41 percent from the second quarter 2013. These portfolio sales played a large role in the approximately 3,301 units selling, which is more than 70 percent higher than the number of units changing hands compared to both year-over-year and quarter-to-quarter figures.
Northern Manhattan. Buoyed by a number of institutional sales, this submarket’s dollar volume rose to $364.967 million, the second highest dollar volume during the third quarter compared to other areas covered in this report. Like Manhattan, transaction volume was relatively stable with 32 transactions, but portfolio sales included 62 buildings sold, a 38 percent increase quarter-to-quarter and a 41 percent increase year-over-year, and 2,215 units sold, a 20 percent quarter-to-quarter and a 106 percent increase year-over-year. Clearly, rising rents and ongoing uptown development initiatives are driving greater demand for Northern Manhattan multifamily assets.
Brooklyn. Despite a modest dip in multifamily sales on a quarter-to-quarter basis, Brooklyn saw solid gains year-over-year in transaction volume of 14 percent, building volume of 21 percent, and dollar volume of $67 percent. The borough saw 11 sales north of $10 million, the largest of which was the sale of 202 8th Street in Park Slope for $37.75 million or $740,000 per unit.
The Bronx. Third quarter Bronx multifamily sales showed strong gains on a quarter-to-quarter and year-over-year basis. With 47 transactions, the most of any submarket, comprised of 78 buildings totaling $321.439 million in gross consideration, The Bronx saw a range of portfolio and individual asset sales. Prices also are rising across the borough as investors seek yield lacking in other parts of the city.
Queens. After an exceptionally active second quarter, Queens multifamily sales declined to more normal levels with $110.042 million in sales over 13 transactions comprised of 31 buildings. A $68 million portfolio with more than 550 units made up the bulk of this activity.
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-MFQIR-Q3-2013.
The U.S. economy added 148,000 jobs in September and the unemployment rate for the month fell slightly to 7.2 percent. The relatively weak jobs report led analysts to speculate that the Fed will continue its $85 billion a month bond-buying program through 2014.
Average fixed mortgage rates fell to the lowest levels since the summer amid market speculation that the Federal Reserve will not alter its bond-buying purchases this year, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.13 percent for the week ending October 24, down from the previous week when it averaged 4.28 percent, but still above a year ago when it averaged 3.41 percent.
Existing home sales, completed transactions that include single-family homes, townhomes, condominiums, and co-ops, declined 1.9 percent in September to 5.29 million from 5.39 million in August, but were 10.7 percent above the level in September 2012. The decline was attributed to rising home prices, which has caused affordability to fall to a five-year low. It also was noted that any increase in interest rates will further reduce affordability.
The Tenant Protection Unit, a new state office that audits landlords that remove apartments from the rent-stabilization program, is now issuing subpoenas “covering the entire operations of some building owners,” the WSJ reported. Since being established last year by Gov. Andrew Cuomo, the unit has conducted 1,100 audits and requested documentation on improvements made to vacant apartments. Critics say the unit unfairly penalizes smaller landlords.
A shortage of office space in downtown Brooklyn has prompted the Downtown Brooklyn Partnership to reach out to building owners around Fulton Mall with offers to lease the underused space above their retail storefronts, renovate them, and sublease them to start-up companies. While downtown Brooklyn has been undergoing a building boom, new construction has been limited to residential and hotel development. The office vacancy rate in downtown Brooklyn was 7.8 percent in the second quarter 2013, down from 12.4 percent in the second quarter in 2012.
The City Planning Commission approved the Rheingold rezoning application, which will allow the development of a new residential complex with 977 units on the former site of the Rheingold Brewery in Bushwick. Plans call for 70- and 80-foot towers, retail, additional streets, a school, and open space. Community Board 4 voted to approve the rezoning on the condition that developers add more affordable housing and make other modifications.
A recent study found that Harlem should build 1,500 additional hotel rooms to meet the area’s growing tourist demand, and that the 440 rooms planned for two new hotels won’t be enough, according to a speaker at the Harlem Hospitality and Culinary Conference. The Aloft Harlem hotel opened in recent years on Frederick Douglass Boulevard, a 210-room hotel is planned for the Victoria Theater redevelopment on 125th Street, and a 230-room hotel is planned near the Columbia University expansion in West Harlem.
Mayor Michael Bloomberg approved the establishment of the SoHo Business Improvement District (BID) which will be the city’s 68th BID. With an annual operating budget of $550,000, the SoHo BID will serve more than 130 retail businesses along Broadway between Houston and Canal Streets, and support sanitation and snow removal services, pedestrian and public safety services, and capital improvement projects.