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Deals & Dealmakers

Multifamily market takes end-of-year breather as supply runs dry

New York City’s multifamily sales volume overall took an end-of-year breather, according to Ariel Property Advisors.

In its Multifamily Month in Review for October 2015, the firm noted that although Brooklyn and the Bronx saw notable sales increases, the cty’s multifamily sales volume overall slowed.

Manhattan and Northern Manhattan had particularly light months, with the majority of transactions coming in at prices under $35 million.

For the month, New York City saw 51 transactions comprised of 85 buildings totaling $782,662,000 in gross consideration. This represents a 27 percent decrease in transaction volume, a 28 percent decrease in building volume and a 58 percent decrease in dollar volume compared to October 2014, which saw 70 transactions comprised of 118 buildings totaling $1,863,000,000 in gross consideration.

Shimon Shkury
Shimon Shkury

“While the multifamily market got off to a slower 4Q start in October, we believe this results from the lack of supply, not demand,” said Shimon Shkury, resident of Ariel Property Advisors.

Brooklyn led all sub-markets in October with 23 buildings trading across 12 transactions totaling $231,958,000 – a 23% increase compared to October 2014. A portfolio of four buildings spanning Clinton Hill, Crown Heights and Fort Greene made up the largest transaction, selling for $60,200,000, or $453 psf.
New York REIT continued to sell off its non-core assets, as they disposed of 163 Washington Avenue, a 16-story, 40,000 square foot rental building constructed in 2009. The building traded for $38,000,000, or $914 psf.

Manhattan saw 15 trades consisting of 19 buildings totaling $210,448,000.
Benchmark Real Estate Group sold a pair of mixed-use rental located at 246 and 248 10th Avenue in Chelsea for $26,500,000, or just over $1,300 psf. Benchmark paid $14,400,000 for the buildings just last year.

152 East 22nd Street
152 East 22nd Street

The sub-market’s largest transaction occurred in Gramercy, where 152 East 22nd Street sold for $33,500,000, or $1,367 psf.

The Bronx experienced a year-over-year spike of 132% in dollar volume with $167,290,000 in gross consideration.
One key highlight was the $90 million sale of the Continental Portfolio, a package of 13 buildings containing 612 units. The sale translates to a sub-5% capitalization rate and is, to date, the largest multifamily sale of 2015.
In the Bronxdale neighborhood, a pair of elevatored buildings sold for $30,600,000, or $135 per square foot.
Pricing continues to rise throughout the Bronx, as the trailing 6-month average gross rent multiple has topped 10, hitting 10.14 times.

Northern Manhattan had a sluggish month with 11 buildings trading across eight deals totaling $105,325,000.

Queens’ multifamily figures were bolstered by two large trades which accounted for roughly 84 percent of the borough’s dollar volume in October. The larger of the two trades was 83-30 Kew Gardens Road, an elevatored building with 52 units which sold for $35,000,000, or $390 psf. In Jackson Heights, 94-02 35th Avenue sold for $22 million, or $200 per square foot.

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