New York City multifamily building sales rose 15 percent and the dollar volume of those trades jumped 33 percent in May 2014 compared to May 2013, according to Ariel Property Advisors’ Multifamily Month in Review: New York City for May.
For the month, New York City saw 52 transactions comprised of 102 buildings totaling $645.876 million in gross consideration compared to May 2013, which saw 61 transactions comprised of 89 buildings totaling $484.966 million in gross consideration.
“May figures bolster our expectations that market reports covering the first half of 2014 will show strong year-over-year gains in multifamily pricing and sales volume,” said Shimon Shkury, president of Ariel Property Advisors.
Transaction volume was unchanged month-to-month but building volume declined 8 percent from 111 In May compared to April and the dollar volume of those trades declined 9 percent from $711 million, primarily because of fewer deals in the Bronx and Brooklyn.
The following is a breakdown of the May 2014 volume by submarket:
Manhattan. Manhattan rebounded in May after a slow April with 13 transactions totaling $239.218 million in gross consideration, a 31 percent increase in dollar volume from the previous month and an 88 percent jump in dollar volume compared to May 2013. Despite leading the city in transactions and dollar volume, only one notable portfolio traded in Manhattan as individual properties made up the bulk of transaction volume for the month. Manhattan’s activity was anchored by the $68.167 million sale of 277 West 10th Street, a 144 unit core asset located in the West Village. The transaction represented $495 per square foot and the new owner plans to reposition the asset by reconfiguring the building to larger units.
Northern Manhattan. Northern Manhattan experienced very strong month-to-month and year-over-year gains as it saw 31 buildings trade across 10 transactions totaling $133.478 million. This represents a 107 percent increase in building volume and a 68 percent increase in dollar volume from April, and a 138 percent increase in building sales and an 80 percent increase in dollar volume compared to May 2013. Northern Manhattan can attribute its strong month to portfolio sales, which accounted for 24 of the buildings traded. A notable transaction was the sale of a portfolio of properties owned by Yeshiva University for $72.5 million to Cammeby’s International. The sale represented $192 per square foot and $179,000 per unit.
The Bronx. Although the Bronx saw month-to-month decreases after an unusually strong April, the borough experienced solid year-over-year gains as the number of buildings sold increased 40 percent to 28 and dollar volume of those trades increased 32 percent to $131 million from May 2013. Pricing remained strong as ever in the Bronx, as the average price per square foot for multifamily transactions in May was $129.
Brooklyn. After seeing several very active months, Brooklyn multifamily sales calmed down in May with 12 transactions trading for $107.455 million in gross consideration, a decrease of 20 percent and 52 percent, respectively, from the previous month. The sale of a newly-constructed building located at 76 Meserole Street in East Williamsburg $35.6 million, or $584 per square foot, stands out as a testament to strong pricing throughout the borough.
Queens. With $34.7 million trading across five transactions, Queens’ May multifamily sales picked up from a sluggish April. A 66 unit elevatored building in Kew Gardens sold for $14 million, or $212,000 per unit, demonstrating the region’s strong pricing.
Trailing 6-Month Sales Averages: For the six months ended in May 2014, the average monthly transaction volume remained steady, dropping slightly to 63 transactions per month. For the first time since February, the dollar volume fell below $1 billion and averaged $937.6 million in May.
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-May-2014.
The MTA and labor unions representing the LIRR settled their four-year-old contract dispute and averted a strike. The agreement gives existing LIRR employees a 17 percent wage increase over 6 and a half years, but the contract will have no impact on MTA fares. To ensure the long-term affordability of the wage increases, all employees will for the first time contribute to their health insurance costs, and new employees will have different wage progressions and pension plan contributions.
New York City had a net gain of 94,300 jobs from June 2013 to June 2014, bringing the city’s job count to 4,067,500, the New York State Labor Department reported. The city’s unemployment rate in June remained unchanged at 7.9 percent, while the state’s unemployment rate dropped slightly from 6.7 percent in May to 6.6 percent in June, the lowest level since November 2008. The U.S. unemployment is 6.1 percent.
Kuafu Properties and Siras Development have purchased five adjacent parcels on the southeast corner of 38th Street and 11th Avenue across from the Javits Center in Midtown for $62 million, Forbes reports. The investors are planning to build a 20-story, 380,000-square-foot tower that will include 50 luxury condos, a 400-room, high-end hotel, office space, ground-floor retail, and a three-story Shanghai Club. According to the article, Kuafu Properties is a New York-based “full-service development platform established with the vision of bridging Chinese capital with prominent U.S. real estate projects.”
A city proposal to upzone five blocks of the Vanderbilt Corridor north of 42nd Street, which would allow SL Green to build a 67-story tower adjacent to Grand Central Terminal without purchasing 1.3 million square feet of air rights over Grand Central Terminal, would “cause an unconstitutional taking of our client’s property,” Duane Loft, a lawyer for Grand Central Terminal argued at a City Planning hearing. “The development rights above Grand Central are property rights, and the Constitution protects those rights from being taken from their owners without just compensation,” he said, the Commercial Observer reported. The Grand Central legal team has threatened to file a $1 billion lawsuit over the unused air rights.
The Downtown Brooklyn Partnership released a report that chronicles the growth of Downtown Brooklyn in the 10 years since the area was rezoned in 2004. The rezoning and $400 million in public investment has resulted in more than $4 billion of private investment leading to the creation of 5,200 residential units, more than 1,000 new hotel rooms, almost a quarter million square feet of office space, and 625,000 square feet of retail. The original plan anticipated more commercial than residential development so today the vacancy rate of Downtown Brooklyn’s 17 million square feet of commercial office space is close to 4 percent, which means businesses are running out of room to expand.
Ten years after Downtown Brooklyn was transformed by the rezoning, Mayor Bill de Blasio is proposing to redevelop the 21-acre Brooklyn Strand, a series of disconnected parks, plazas, and greenways between Borough Hall and Brooklyn Bridge Park. The mayor’s other downtown initiatives include investing in three new and revitalized spaces at Fox Square at Flatbush and Fulton Street, Willoughby Square, and BAM Park; launching the Brooklyn Cultural District BID; making Jay, Tillary, Adams, and Willoughby Streets safer and more inviting; and creating a consortium of Downtown Brooklyn’s 11 colleges.
Operators of the Mall at Bay Plaza in the Bronx are hoping to attract wealthier Bronx shoppers and even Westchester residents when the $270 million mall opens at the Hutchinson River Parkway and I-95 in mid-August. The mall will be anchored by Macy’s, which last opened a store in the Bronx in 1941, and will house newcomers to the borough H&M, Victoria’s Secret, and Aeropostale. In recent years, suburban residents that previously commuted to Midtown Manhattan for shopping have been staying closer to home and patronizing high-end malls in Westchester.
The Bowery Residence Committee, a provider of social services, is reportedly proposing to build 132-units of affordable housing and a shelter for 200 single homeless adults at 233 Landing Road, between Cedar Avenue and the Major Deegan Expressway in the University Heights section of The Bronx, the Daily News reports. The building would be the first of its kind to offer both affordable housing and a shelter. Three homeless shelters housing 140 families and at least 15 supportive housing developments for people with disabilities and substance abuse or mental health issues are located in Community Board 7, the article said.
The New York City Department of Housing Preservation is seeking proposals to build a mixed-use, mixed-income development with approximately 200 new affordable apartments on a municipal parking lot in the Flushing neighborhood of Queens. The development site is bordered by 41st Avenue, College Point Boulevard, Main Street, and the Long Island Railroad (LIRR) Flushing-Main Street Station. The deadline for the proposal is October 10, 2014.
Young professionals and families seeking affordable housing in a diverse community can find it in the Briarwood neighborhood of Queens, according to the NY Times. Although single-family homes are scarce, one- and two-bedroom co-ops are plentiful. One-bedroom co-ops now sell for around $145,000, compared to $160,000 to $165,000 before the recession. Rentals range from $1,000 to $1,200 a month for studios to up to $2,300 to $2,600 for a three-bedroom. The neighborhood is accessible to Manhattan via a 40-minute commute on the E and F subway lines.