NEW YORK CITY—Multifamily dollar volume rose 46% year-over-yearacross the four largest boroughs in the third quarter, reaching$3.258 billion, says Ariel Property Advisors in aquarterly report. It was the sector's best showing citywide sincethe fourth quarter of 2012.

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The jump in transaction volume, while smaller, was nonethelesshealthy at 16%, with 213 deals of $1 million or more completed inQ3 across Manhattan, the Bronx, Brooklyn and Queens, compared to184 in Q3 2013. An even better result was the quarter-to-quarterincrease, with Q3 transaction volume improving on Q2 by 26%, whiledollar volume rose 74%.

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“Third-quarter volume was buoyed by 12 institutional-level dealsin September at prices over $20 million, including threetransactions that were over $200 million,” says ShimonShkury, president of Ariel Property Advisors. Hesays it's unique “in that the summer months were primarilydominated by smaller deals and, consequently, deal flow in thethird quarter exceeded our expectations.”

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Further, Shkury says, “With global instability pushing rateslower and sustained demand meeting constrained supply, we expectthis market strength to carry into the remainder of the year.”

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Propelled by a number of large institutional transactions,Manhattan south of 96th Street was the scene of nearly half thedollar volume in Q3 at $1.4 billion. The borough's pricingcontinues to be stronger than ever, with the six-month trailingaverage price per square foot increasing 31% from a year ago to$844 per square foot from $647 the year prior.

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While dollar volume in Northern Manhattan clearly was lower, itsother Q3 metrics were strong. The submarket saw a 41% increaseY-O-Y in transaction volume to 45, a 29% increase in buildingvolume to 88 and a 36% gain in dollar volume to $508 million.

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Brooklyn did even better in dollar volume, with a Y-O-Y gain of50% to reach $505 million in Q3, while transaction volume rose15% to 54 in from a year earlier. As an illustration of thesurge in pricing, a 52-unit package of walk-up buildings at 107-113Greenpoint Ave. in the Greenpoint section recently sold for $23.75million, or $616 per square foot.

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The Bronx has had a strong year thus far, and Q3 continued thatstreak, with dollar volume increasing 24% Y-O-Y to $415 millionyear-over-year while remaining steady quarter-to-quarter. There wasa slew of transactions over $10 million, including the sale of2230Grand Concourse for $10.2 million, or $166 per square foot, thatsolidified the borough's strong quarter. In terms of pricing, Arielnotes that the Bronx has seen an impressive drop of 128 basispoints in its six-month trailing average cap rate from the yearprior, decreasing from 7.48% to 6.20%.

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Although its dollar volume was the smallest, Queens saw thehighest Y-O-Y and quarter-to-quarter increases: 165% and 355%percent, respectively, to $347.78 million. More than half the totalwas attributable to a single deal, on a $216-million, 1,269-unitportfolio sale in Kew Gardens. Meanwhile, a handful of otherinstitutional transactions over $15 million in Elmhurst, Hollis andMurray Hill helped grow the Queens numbers as well.

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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.