Report: MF volume hit $3.3B in Q1

NEW YORK CITY—First quarter New York City multifamily dollar volume rose 6% year-over-year to $3.324 billion, with Manhattan and Brooklyn each accounting for more than $1 billion in sales, according to Ariel Property Advisors'Multifamily Quarter in Review New York City: Q1 2015.

Transaction volume rose 7% to 208 and the number of buildings traded declined 13% to 338 in the first quarter 2015, compared to the first quarter of 2014, which saw 194 transactions, 387 buildings sold, and total dollar volume of $3.13 billion. Compared to the fourth quarter 2014, transaction and building volume rose 9% and 1%, respectively, while dollar volume declined 18%.

“New York City multifamily property sales saw a robust kick off to the year as first quarter figures outpaced those seen one year ago,” said Shimon Shkury, president of Ariel Property Advisors. “The quarter ended on a high note as a surge in institutional and portfolio deals in March drove big dollar volume gains in Brooklyn and Manhattan.”

Shkury also noted that pricing continued to advance year-over-year.  In Manhattan, the average price per square foot is approaching $900 while average capitalization rates are coming in under 4%.  Northern Manhattan, Brooklyn, and Queens are consistently seeing cap rates below 5%, and cap rates in the Bronx have fallen below 6%. 

The following is a breakdown of the first quarter 2015 volume by submarket:

Brooklyn. Two massive Brooklyn portfolios in East Flatbush and Brighton Beach drove the borough's first quarter activity, which consisted of 114 buildings trade, among 63 transactions and $1.079 billion in dollar volume. Dollar volume for the quarter almost doubled that of the 4Q14, and was 48% higher than the first quarter of last year. In Crown Heights, 494 Sterling Place sold for almost $800 per foot, and over $600,000 per unit.  

Manhattan. Manhattan showed significant year-over-year gains in the first quarter across the board. For the quarter, the borough saw 42 trades across 69 buildings, totaling $1.333 billion in gross consideration, a 24%, 44%, and 9% increase over last year's totals, respectively. One of the notable sales was a five-building package that sold for over $1,500 per foot in NoLiTa on Elizabeth Street, one of the city's most quickly appreciating areas. Another was the sale of 311-29 West 50th Street, a 104 unit elevatored building that sold for $72 million or $888 per square foot.   

Northern Manhattan. Northern Manhattan was relatively stable quarter-to-quarter, with a strong uptick year-over-year. For the quarter, the borough saw 34 trades across 50 buildings and just over $400 million in gross consideration. Compared to last year, these figures were up 21%, 22%, and 53%, respectively. The average price per foot surpassed $300 in the region this quarter, an all-time high. The submarket's continued growth is evident in the recent sale of 567-69 West 125th Street, which closed for $533 per square foot. Over in East Harlem, a newly constructed elevatored building sold for $465 per square foot.  

The Bronx. The first quarter brought mixed results for The Bronx, showing robust transaction and dollar volume compared to last quarter, but down from a big 1Q2014. The borough in total saw 49 sales across 68 buildings, and $340.240 million in gross consideration. Pricing in the borough continues to climb, reaching $135 per square foot in the last six months. The largest sale in the borough took place at 2001 Story Avenue in Castle Hill, for $66 million, or $156 per foot.  

Queens. Queens made a fair amount of noise this quarter, topping figures seen in 4Q14 but falling short of 1Q14 levels.The 20 transactions, 37 buildings, and $169.237 million in gross consideration which traded represent quarter-to-quarter increases of 54%, 76%, and 21%, respectively. An Astoria portfolio purchased by Kushner Companies in January was the largest sale of the quarter, at $51 million, or $401 per square foot.  

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.