Randy Modell, vice president of Ariel Property Advisors, said razor thin vacancy levels are driving up rents and condominium prices are rising sharply as buyer demand meets scarce product.
“Both trends are fueling a tremendous appetite for development site sales throughout Manhattan and are causing prices per buildable square foot to surpass heights achieved during the last cycle,” said Modell.
The findings emerged in Ariel Property Advisors’ Manhattan 2013 Mid-Year Sales Report which tracks activity south of East 96th Street and south of West 110th Street and transactions $1 million and up.
Investment property sales during the first half of 2013 showed a year-over-year jump in dollar volume of 28 percent, but declines in transaction and property volume of 12 percent and 9 percent, respectively.
In Manhattan in the first six months of 2013, there were 274 transactions consisting of 351 properties totaling $10.56 billion in gross consideration, compared to the first half of 2012, which saw 310 transactions comprised of 384 properties totaling $8.199 billion in gross consideration.
Some sites in prime locations are seeing values north of $600 per buildable square foot with one site in West Chelsea selling for as high as $800 per buildable square foot. “While Manhattan multifamily sales volume dipped in the first half of 2013 compared to the first half and second half of 2012, prices for these properties have risen to the highest levels seen since 2007,” said Shimon Shkury, president of Ariel Property Advisors.
“We expect strong pricing to bring more properties to market over the second half, possibly prompting some owners who missed out on the last peak to choose to sell during this cycle.”
