By Holly Dutton
Sales of multi-family properties have doubled in New York City since the first quarter of the year.
Fueled by rising rents and the shadow of rising interest rates, the market has seen $1.579 billion in sales since the start of April. But lack of inventory has dragged the actual number of sales and dollars made down.
According to a report from Ariel Property Advisors, multi-family sales in second quarter of 2013 jumped 50 percent in transactions from the first quarter, saw a 20 percent rise in buildings sold, and a 63 percent jump in the dollar volume of those trades.
“A lack of inventory in the first quarter created pent-up demand for multifamily assets, which when combined with higher prices led to a substantial increase in activity in the second quarter,” said Shimon Shkury, president of Ariel Property Advisors.
“We believe the market in the remainder of the year will build on this momentum and that rising interest rates also may push more owners to sell versus refinance.”
Year-over-year, 2Q numbers decreased seven percent in transaction volume, four percent in building volume and seven percent in dollar volume from the same time last year, which saw 229 buildings sold for a total of $1.7 billion.
But after a lackluster first quarter, Manhattan saw a 67 percent jump in sales in the second quarter with $839.729 million worth of product sold. Notable deals included a $62 million portfolio sale along the Bowery and the $400 million sale of 400 West 63rd Street and 60 Riverside Drive.
Northern Manhattan, which has seen stunning growth since the beginning of the year, according to a Massey Knakal report, has seen prices rising from $169 to $213 psf and higher prices per unit, to around $142,397.
For the second consecutive quarter, Brooklyn led the New York City submarkets in number of transactions, with 49 sales comprising 69 buildings; a 63 percent increase in transaction volume and 77 percent increase in building volume from the first quarter of 2013. Coupled with June employment reports, the city is recovering from the recession well.
According to an assessment of NYS Labor numbers carried out by Eastern Consolidated, the city added 14,3000 jobs in June, the highest since 2000.
Among other industries, the construction industry had significant job growth in June, adding 4,600 jobs, while securities and real estate both had gains with 400 and 600, respectively.
According to the report, the growth was expected “given the increase in construction permits issued this year,” and recent progress with the Hudson Yards project as well as the World Trade Center site.
In November 2011, Related announced that more than 20,000 construction jobs will be generated by the construction of the first building in the Hudson Yards project, which will house anchor tenant Coach.
More than 100,000 construction jobs will be generated by development of the Eastern Railyard (including over 80,000 direct jobs) and over 10,000 permanent new jobs will be generated upon completion of both yards, which will also serve as home to 30,000 office workers.