Manhattan's investment sales were mixed for the first quarter, according to Avison Young, which reports there were 84 transactions for a $2.7 billion volume, representing a 12 percent rise and a 17 percent plunge in the respective categories.
From a volume perspective, the results were driven by shaky starts in the office and the multifamily/mixed-use sector, as they were down 58 percent ($659.8 million), and 31 percent ($444 million), respectively. Retail, meanwhile, saw a 21 percent boost to $604 million, while developments in general surged by 132 percent to $705 million.
Transactions showed some strength in retail and office, which were up by five percent and 15 percent, respectively. But most notably developments in general skyrocketed by 167 percent. But multifamily and mixed-use's struggles carried over to transactions, seeing a slowdown of three percent.
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The largest deal in the first quarter occurred in the retail sector. This involved 666 Fifth Avenue, which was acquired by Uniqlo for $355 million.
Also, retail led the way in terms of pricing per square foot, seeing a 27 percent surge to $1,643. Office and developments were up by seven percent and 11 percent to $541 and $686, respectively. Multifamily tanked by 17 percent to $590 per square foot.
Across asset classes in Manhattan, multifamily averaged the lowest cap rates at 5.80 percent. Multifamily was slightly higher at 5.81 percent, while retail was at 6.66 percent.
Avison Young forecasts that Manhattan's transactions will surge by 26 percent in 2025, while dollar volume will drop by five percent.
"There is confidence that the market will continue to build as 2025 progresses," the CRE firm noted.
Also, it added that investors will want to look out for a few trends this year, which includes the impact of the City of Yes initiative, a zoning reform that aims to provide affordable housing, development sustaining its performance through the full year and whether office conversion purchases will continue.
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