Commercial investment is flooding through the Big Apple. Avison Young reports that Manhattan's property sales for the third quarter skyrocketed by 191 percent from the previous three months to $4.9 billion. That volume marks the highest quarterly volume seen in three years.
The number of transactions increased by 34 percent to 79.
“We’re seeing meaningful momentum return to Manhattan’s investment sales market," Brandon Polakoff, principal and head of NYC Investment Sales, said in a statement.
"The sharp increase in dollar volume this quarter reflects both improved sentiment and a growing willingness among investors to reengage. New York’s fundamentals remain strong, and that stability is driving deal activity across multiple asset classes.”
The office sector showed the highest volume by far, surging 169 percent to $2.4 billion. However, transactions were down by 11 percent, while rents per square foot declined by four percent to $653.
By growth, the development segment wowed, with its nearly 2,000 percent increase to $949.9 million. Transactions are up by 167 percent, whereas rents per square foot slipped three percent to $384.
Multifamily and mixed-use volume was up by an impressive 160 percent to $716.4 million, with transactions rising by 17 percent. Meanwhile, prices plunged by nine percent to $684 per square foot.
Retail volume increased by 14 percent to $356.8 million and transactions rose by 42 percent. Prices per square foot dropped to $1,229, down 35 percent.
The office sector saw the largest property deal in Manhattan during the third quarter, with RXR and Elliott Investment Management buying 590 Madison Avenue for $1.8 billion. Naftali Group had the largest in the development sector, buying 800 Fifth Avenue for $810 million, Ikea in retail with its $213 million purchase of 529 Broadway and J.P. Morgan in multifamily/mixed-use, with its acquisition of 560 West 43rd Street for $243.5 million.
Avison Young going forward lists three trends to watch out for: the impact of more potential rate cuts, large office sales and how the November mayoral election will affect investment sales in Manhattan.
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