Brooklyn leads NYC in April real estate transaction volumes

June 17, 2014 From Ariel Property Advisors

Shimon Shkury's Ariel Property Advisors saw a growth in multifamily transactions

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New York City multifamily transactions increased 16 percent and the dollar value of those trades rose 32 percent in April 2014 compared to April 2013,Ariel Property Advisors’ Multifamily Month in Review for April shows.

For the month, New York City saw 50 transactions comprised of 108 buildings totaling $693.875 million in gross consideration, compared to April 2013, which saw 43 transactions comprised of 69 buildings totaling $524.071 million in gross consideration. Month-to-month, however, sales volume declined in April compared to March, which showed 121 buildings sold over 78 transactions totaling $1.36 billion.

“A surge of Brooklyn and Bronx multifamily sales in April drove the year-over-year gains in New York City’s multifamily market,” said Shimon Shkury, president of Ariel Property Advisors. “Rising prices in those boroughs as well as in other submarkets led to several significant portfolio sales during the month, which pushed building and dollar volume higher citywide.”

The following is a breakdown of April 2014 volume by submarket:

· Brooklyn. Brooklyn led the way in April, even outpacing the transaction and dollar volume in Manhattan, with $222.500 million in sales taking place across 16 transactions. Year-over-year, this represents a 273 percent increase in dollar volume. The sale of a newly-constructed 127-unit building at 1207 DeKalb Avenue in Bushwick for$58 million, or $569 per square foot, helped anchor Brooklyn’s strong month.

· The Bronx. The Bronx also outpaced Manhattan across all metrics in April, a rare occurrence with 35 buildings selling over 17 transactions totaling $209.6 million in gross consideration. Several large portfolio sales took place, boosting the number of units sold in the Bronx to 1,638, almost exactly half of all units sold in New York City in April. Notable sales included two Jerome Park portfolios that sold for a combined $84.350 million, representing $150 per square foot.

· Manhattan. Despite a strong average price per square foot of $761 and with average cap rates coming in under 4 percent, Manhattan had a relatively sluggish month with $182.874 million in sales taking place across eight transactions. These figures show modest decreases in both month-to-month and year-over-year figures. A transaction highlight was the sale of a 12-building Upper West Side portfolio comprised of 174 units that sold for $60 million, representing $517 per square foot.

· Northern Manhattan. Northern Manhattan also had a somewhat slow April, as it saw 14 buildings trade across eight transactions totaling $75.425 million. Year-over-year, this marks an 11 percent decrease in transaction volume, a 26 percent decrease in building volume, but a 26 percent increase in dollar volume. Pricing is stronger than ever, however, as seen in the sale of a portfolio on West 111th Street that traded for $24.25 million, or $445 per square foot.

· Queens. Following a transaction heavy March that saw $243 million in sales taking place, Queens had a quiet April, with only one multifamily sale. The lone sale was a 12-unit walk-up building located in Astoria for $3.45 million, representing $357 per square foot.

For the six months ended in April 2014 the average monthly transaction volume slightly decreased to 63 transactions per month. Continuing the trend since the start of 2014, the six-month average dollar volume increased and reached $1.052 billion in April.

The multifamily transactions included in the analysis occurred at a minimum sales price of $1 million, with a minimum gross area of 5,000 square feet, and with a minimum of 10 units.