NEW YORK CITY—The Rent Guidelines Board's unprecedented vote this past June for a freeze on rates for one-year leases in rent-stabilized apartments hasn't exactly put a freeze on multifamily investment sales here.  Yet the vote, coupled with mixed signals from Mayor Bill de Blasio's administration on the city's affordable housing policy, has created uncertainty among investors and developers alike, according to experts at last week's RealShare New York conference.

With its mandate of inclusionary housing raising questions of how multifamily projects will pencil out financially, the current administration will have to become “more creative” in persuading developers to do affordable housing, said Karim Hutson, founder and managing member of Genesis Cos., during the “Robust Multifamily Market” discussion. Upzoning in Northern Manhattan would be a helpful step, he pointed out.

Peter von der Ahe, SVP of investments at Marcus & Millichap, said the apartment market has been dividing into two segments: properties that are 70% or more rent-stabilized, and properties that are at least 70% market rate. There's not a clear consensus on how to underwrite either type, he said.

“There are so many variables that haven't been clarified” by the administration, said Woody Heller, executive managing director and group head of the capital transactions group at Savills Studley. During the “Transactions Outlook: Getting the Deals Done” panel, Heller also noted that if Mayor Bill de Blasio—who comes up for re-election in 2017—doesn't win a second term, some apartment investors will see the coming year as “a spectacular time to buy.”

However, James Nelson, vice chairman of the capital markets group at Cushman & Wakefield and a fellow panelist in the “Transactions Outlook” discussion, sees a status quo in this regard. He predicted that the rent regulations enacted in June will be with us for some time, regardless of whether de Blasio is re-elected.

Moreover, Michael Cohen, president of the tri-state region at Colliers International, pointed out a factor that mitigates against any political uncertainty as far as investors are concerned. “The vacancy rate is basically zero” in New York City apartments, Cohen said, notwithstanding a concern raised by moderator Lois Weiss of the New York Post that the political climate could put downward pressure on values.

Across the board, New York City real estate has strong appeal to investors both domestic and foreign. “Less traditional locations are becoming more institutionally accepted,” Heller pointed out. Nelson noted that compared to London and Hong Kong, New York City pricing is still relatively inexpensive. “If we can deliver a 3.5% or 4% yield, we look pretty good,” he commented.

Helen Hwang, senior executive managing director with Meridian Investment Sales, cited Blackstone's mammoth Blackstone Real Estate Partners VIII, all $15.8 billion of it, as speaking to “the volume of capital that's available” to invest in commercial real estate. It also speaks to the lack of appeal among alternatives to real estate, she added.

Nelson observed that year to date in 2015, the New York City market has seen slightly fewer sales transactions and larger deal sizes. “We're seeing the return of the mega-trade,” he said.