However, that total does represent a 23% gain over the fourthquarter of '09, said Knakal, chairman of Massey Knakal RealtyServices. And while the quarterly increases and decreases acrossthe boroughs bear out Ken Krasnow's use of the word"rollercoaster," the general trend has been a steady improvementsince the investment sales market for properties of $500,000 ormore virtually shut down at the midpoint of last year.

|

The Q1 tally also masks what's been happening in Manhattancompared to the outer boroughs: a 51% gain in dollar volume sinceQ4, compared to a quarter-over-quarter dropoff of as much as 41%elsewhere in the city. Year over year, though, Manhattan's growthwas virtually flat: a total of $1.536 billion in Q1 '09, comparedto $1.539 billion in Q1 2010.

|

"The boroughs are a lagging indicator of what's happening in theManhattan market," Knakal said during the media briefing at MasseyKnakal's headquarters. Northern Manhattan had aquarter-over-quarter gain that was similar to that of the swath ofManhattan south of 96th Street, whlle its year-over-year upsurge of197% in dollar volume was the best in the city, said partner ShimonShkury. Yet the Bronx, also in Shkury's bailiwick, saw a 7% declinefrom Q4.

|

Krasnow, managing director of Massey Knakal's Brooklyn office,cited a shutdown of development activity in that borough and inQueens as a major factor in the slump in property sales on ayear-over-year and quarter-over-quarter basis. However, the Q1tallies of $143.4 million and $161.9 million for Queens andBrooklyn, respectively, did represent substantial gains over thedismal results see in Q2 '09. The firm does not track results forStaten Island.

|

Transaction volume citywide at 373 completed sales is stilldepressed by 72% from the Q1 2007 peak of 1,353 deals. With thenumbers still off from the height of the market, Knakal noted that29% of the Q1 dollar volume came from just two completed deals inManhattan, both involving Macklowe Properties: the $305.4-millionsale of a Park Avenue development site to CIM Capital and the$276.5-million sale of two multifamily properties to EquityResidential, with a third apartment tower under contract.

|

Nonetheless, Knakal said expectations are for dollar volume "toincrease significantly this year." He said the firm is projectingannualized turnover citywide to improve from its all-time-low lastyear of 0.87% to 1.2%. Distress will be on the rise throughout theyear, and CEO Paul Massey said incomplete development projects willbe the major contributor to that pool, with either office or retailalso likely to yield more distressed assets. Shkury said mortgageresets will give rise to more distress in the multifamilysector.

|

At the same time, Knakal said there will be more discretionarysellers coming back into the market this year, and institutionalcapital is also more of a factor. The ranks of buyers will includeboth domestic and foreign players, with the latter here in greaternumbers than at any time since the mid 1980s.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.