New York City Commercial Investment Transaction Values Jump 20% in 2018

Dollar value for 2,200 citywide transactions rise 20% annually to $21.6 billion

According to the Real Estate Board of New York's recently released Investment Sales Report, in the first half of 2018, New York City's investment sales market showed signs of improvement from a slow second half of 2017.

The total citywide consideration (monetary value for all recorded sales) was $21.6 billion, a 20 percent increase compared to $18 billion the first half of 2017. Dollar consideration increased year-over-year in Manhattan, Brooklyn, and Queens, while it dipped modestly in the Bronx and Staten Island.

"Following two consecutive years of decline in citywide investment sales consideration, overall consideration has increased," said John H. Banks, REBNY President. "Investors are making commitments to smart, long-term assets and stoking activity within various property categories."

Among the findings from REBNY's report:

• The 138 citywide sales of multifamily rental buildings with an elevator totaled $4.2 billion in consideration, which was more than double the $1.9 billion sold in the first half of 2017.

• The 15 hotels sold in the first half of 2018 totaled $2.2 billion, an increase of 110 percent from $1.0 billion year-over-year.

• Citywide sales consideration for garages / gas stations / vacant land rose 79 percent to $1.6 billion from $919 million in the first half of 2017.

• Retail property sales totaled nearly $2 billion in the first half of 2018, a 43 percent increase from $1.4 billion year-over-year.

The five largest investment transactions (by sales price) in the first half of 2018 were: the $2.40 billion sale of the office building at 75 Ninth Avenue in Manhattan, the $1.39 billion sale of the hotel under construction at 701 Seventh Avenue in Manhattan, the $870 million 'Starrett City' portfolio of rental apartment buildings with an elevator at 1255 Pennsylvania Avenue in Brooklyn, the $640 million office building at 1065 Sixth Avenue in Manhattan, and the $640 million office building at 1731 Broadway in Manhattan.

Investment Sales by Borough

The total number of transactions across the five boroughs was 2,200 in the first half of 2018, a nine percent decrease compared to 2,419 sales in the first half of 2017.

Manhattan: Sales consideration in Manhattan rose 28 percent to $13.7 billion from $10.7 billion in the first half of 2017. The number of transactions decreased slightly to 420 from 467 year-over-year. A few large transactions of multifamily rental buildings with an elevator, vacant land, and retail boosted total consideration in each of those categories.

Bronx: Investment sales transactions in the Bronx rose nine percent year-over-year to 392 from 361. Meanwhile, the dollar consideration for all Bronx investment sales declined seven percent to $1.2 billion. The Bronx and Staten Island were the only boroughs to observe decreases in total sales consideration compared to the first half 2017.

Brooklyn: Brooklyn experienced robust investment sales consideration posting the highest recorded dollar consideration in the borough since the second half of 2016. Total consideration increased 16 percent year-over-year to $4.2 billion from $3.6 billion, while the number of transactions decreased 15 percent to 720 from 849.

Queens: Queens investment sales consideration increased by seven percent to $2.2 billion in the first half of 2018 from $2.0 billion in the first half of 2017. The number of Queens transactions decreased by six percent year-over-year to 517 from 552.

Staten Island: Investment sales in Staten Island dropped by 21 percent to 151 transactions in the first half of 2018 from 190 in the first half of 2017. This resulted in a slight four percent decrease in total consideration for the borough, which was $287 million compared to $300 million in the first half of 2017.

Investment Sales Highlights by Property Category

Multifamily Rental, No Elevator: In Manhattan, multifamily rentals without an elevator accounted for 161 sales or 38 percent of the borough's transactions. By number of transactions, this was the most active property category in Brooklyn, which registered 331 sales accounting for 46 percent of the borough's transactions. This category also garnered the most activity in Queens with 135 sales, or 26 percent of the borough's transactions.

Office: Sales in this category totaled $5.8 billion, accounting for 42 percent of Manhattan's total investment sales consideration. In Staten Island, office buildings accounted for $57 million, or 20 percent of the borough's consideration. The highest-priced investment sales transaction in Staten Island was the $47.3 million sale of the Clifton office building at 1 Edgewater Street.

Garages / Gas Stations / Vacant Land: The highest-priced transaction in Brooklyn's garages / gas stations / vacant land category was the $115 million sale of the parking lots at 2nd Street, 3rd Street, and 3rd Avenue bounded by the Gowanus Canal. This category was the second most active in Brooklyn and Queens with 114 sales, accounting for 16 percent of all transactions, and 115 sales, accounting for 22 percent of all transactions, in the boroughs, respectively. Similarly, Staten Island's 66 transactions for garages / gas stations / vacant land accounted for 23 percent of the borough's total investment sales.