New York City’s multifamily market experienced a robust first quarter with dollar volume totaling $2.87 billion, a 451 percent increase compared to 1Q 2021 and well above the five- year quarterly average of $1.90 billion, according to Ariel Property Advisors’ 1Q 2022 Multifamily Quarter in Review. Additionally, transaction volume increased 89 percent to 117 deals year-over-year, and multifamily pricing metrics rose 10-20 percent depending on the borough.
“After an unprecedented $2.45 billion in multifamily transactions in December 2021, transaction momentum continued throughout the first quarter,” said Shimon Shkury, Founder and President of Ariel Property Advisors. “Black Spruce’s $837 million purchase of The American Copper Buildings accounted for 29 percent of New York City’s total dollar volume in the first quarter, however. Therefore, we expect quarterly transaction volume to fall closer to below $2 billion moving forward.”
The report notes that residential rents reached a new high in February due to a lack of supply and higher inflation. Inflation concerns prompted policymakers to put upward pressure on interest rates resulting in an increase in multifamily mortgage rates to anywhere from 75 – 125 basis points between January 1, 2022, and March 31, 2022, the fastest rate hike in recent memory.
The following is a breakdown of key takeaways and performance of the multifamily market by submarket:
● The Manhattan market saw 32 multifamily transactions totaling $1.5 billion in 1Q 2022, a year- over-year increase of 113 percent and 472 percent, respectively.
● The Northern Manhattan market saw multifamily transactions double to 12 in 1Q 2022 compared to 1Q 2021. Dollar volume rose 237 percent to $170 million as well.
● The Brooklyn market saw dollar volume of trades in 1Q 2022 total $627 million across 34 transactions compared to dollar volume of $104 million across 16 deals in 1Q 2021.
● The Bronx market saw transaction volume rise to 21 deals in 1Q 2022 up from 16 in 1Q 2021, and dollar volume rose 404 percent to $270 million.
● The Queens market saw transactions double to 18 deals in 1Q 2022 compared to 1Q 2021 with dollar volume rising year-over-year by 498 percent to $297 million.