New York City multifamily transactions increased 76 percent in January 2014 from January 2013, and the dollar volume generated by those trades jumped 107 percent, according to Ariel Property Advisors’ Multifamily Month in Review for January.
In January, New York City saw 58 transactions comprised of 93 buildings totaling $707.302 million in gross consideration, compared to January 2013, which saw 33 transactions comprised of 70 buildings totaling $341.097 million in gross consideration.
While January multifamily sales declined compared to the prior month of December—down 28 percent in transaction volume and 44 percent in dollar volume—that trend is a somewhat regular occurrence at the beginning of the year since many deals are pushed to close in December for tax purposes.
“The growth in January’s year-over-year numbers suggests that 2014 is going to be a robust year for New York City multifamily sales, in terms of both pricing and volume,” said Shimon Shkury, president of Ariel Property Advisors. “Contract signings and new listing activity we’ve seen during the first quarter back this up.”
The following is a breakdown of the January 2014 multifamily data by submarket:
Brooklyn was the most active in terms of transactions, building, and dollar volume with 22 sales taking place throughout the borough across 40 buildings. Brooklyn also showed positive gains month-over-month in dollar and building volume. All told, multifamily sales in the borough totaled $239.985 million in gross consideration, a large portion of which came from a four-building portfolio in Brighton Beach that traded for $70 million.
Manhattan trailed just behind Brooklyn in January in terms of dollar volume with $235.630 million in gross consideration over 11 transactions and 14 buildings. A single building that sold at 15 Cliff Street in the Financial District netted $95 million, which translates to just under $600 per foot. Also of note in Manhattan, the average cap rate for the six months ended in January fell to 3.95 percent, which is the first time the six-month average has fallen below 4 percent.
The Bronx realized huge increases over a lackluster January 2013, with dollar volume totaling $157.973 million across 14 transactions and 22 buildings. A family-owned portfolio on Pelham Parkway sold for $156 per foot, or over $52 million total.
Northern Manhattan saw eight sales take place, a slight increase both month-over-month and year-over-year, but only $55 million in dollar volume. Of the trades in the area, one stood out at 416 East 120th Street, a new construction rental building that sold for just over $400 per foot.
Queens had a relatively light month, with seven buildings trading at a total of $18.238 million. Pricing, however, remained strong on a long-term basis, with similar metrics to Northern Manhattan and Brooklyn.
Trailing 6-Month Sales Averages: For the six months ended in January 2014, the average monthly transaction volume dropped slightly to 64 transactions per month. The six-month average dollar volume also fell slightly to $852 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 email@example.com. For a copy of the report, please see http://arielpa.com/newsroom/report-MFMIR-Jan-2014.
City agencies are collaborating to find temporary housing for residents displaced by the explosion in East Harlem. The Real Estate Board of New York identified 15 apartments on the East Side for residents to use for up to three months, and is working with city housing agencies to find long-term arrangements. The NY State Association for Affordable Housing also is working to find temporary and long-term housing for those affected by the tragedy.
Nationwide, the construction industry started nearly one million new residential units last year, of which about one in three was a rental unit in a multifamily building. About two-thirds of the housing starts were single-family homes, down from the 1993 peak of 87 percent. The demand for rental units is increasing because as the job market improves, young people are seeking their own apartments but they aren’t buying homes because mortgage credit remains tight, wages aren’t rising, and many are burdened with student debt.
More than 3 million households in NY State pay housing costs that are at or above the affordability level of 30 percent of household income, according to a report by State Comptroller Thomas P. DiNapoli. The percentage of households with rents above the affordability level increased from 40.5 percent in 2000 to 50.6 percent in 2012, while the percentage of homeowners above the affordability level rose from 26.4 in 2000 to 33.9 percent in 2012. As of 2012, nearly 28 percent of the state’s renters and 15 percent of homeowners paid housing costs that were at least half of their household income.
As early as this month, Mayor Bill de Blasio could appoint five new members of the Rent Guidelines Board, while the other four new members would be appointed in December. The mayor is “seeking balanced candidates who understand the needs of low- and moderate-income tenants,” an aide said. The board is scheduled to hold its first meeting on March 27 and vote on rents in June. The mayor promised during his campaign that he would freeze rents if elected.
In February, Brooklyn’s median rents increased 11.6 percent year-over-year to $2,890, and rose 2.1 percent from January, according to the Elliman Report. It was the ninth consecutive monthly increase for the borough. Median rental prices in Manhattan in February fell 2.8 percent year-over-year to $3,100, and declined a slight 0.4 percent from the previous month. It was the sixth consecutive month that Manhattan’s median rental price was lower than the previous year.
More than 70 construction projects are taking place in Lower Manhattan, including 24 apartment buildings with 3,100 units, 14 hotels with 3,000 rooms, commercial spaces, and waterfront revitalization. More than $30 billion in public and private funds have been invested in downtown since 9-11. One of these projects, the World Trade Center Transportation Hub, is scheduled to open in 2015.
Ten new luxury rental or condo developments, which will provide more than 1,000 units of affordable and market-rate housing, are underway in the Prospect-Lefferts Gardens section of Brooklyn, according to a NY Times article about the area. The projects include a 133-unit residential rental at 33 Lincoln Road that is slated to open in 2015, and a 23-story, 254-unit rental planned for 626 Flatbush Avenue.
Several hip-hop pioneers have announced a proposal to open an interactive museum inside the Kingsbridge National Ice Center in The Bronx that would explore the historical and cultural roots of hip-hop. An advisory committee has been created to help raise funds for the Universal Hip-Hop Museum, which has the potential to become a tourist destination. The group hopes to open the museum by 2017.
Forty to sixty businesses located in Willets Point next to Citi Field in Queens have signed a lease to move to a former warehouse at 1080 Leggett Avenue in the Hunts Point section of The Bronx. The businesses, which include auto repair shops and salvage yards, are moving to make way for a mixed-use complex that will include retail space, a hotel, and 2,500 residential units.