New York City Commercial Investment Sales Dip in First-Quarter 2011, Says Massey Knakal Report

---

According to a new report by Manhattan-based Massey Knakal Realty Services, in the first quarter of 2011, there was $3.9B in NYC property sales, a 45% increase from 1Q10 but 30% off the two year high of $5.6B set in 4Q10. Thus far, there have been 433 properties sold, representing an annualized turnover of 1.06%.

Massey Knakal Chairman and Founding Partner Robert A. Knakal stated, "After remarkable sales volume in the fourth quarter of 2010 caused by lenders wanting to clean up balance sheets by year end and discretionary sellers rushing to beat what they thought would be an increase in capital gains taxes, we fully expected volume to plunge in the first quarter of this year. While it was lower than 4Q10, the $3.9 billion in sales in the first quarter was a very pleasant surprise. It is also indicative of a very strong market due to low interest rates and substantial demand."

Brooklyn has outpaced all markets with 146 property sales through 1Q11, or 34% of total properties sold. Manhattan leads all markets in terms of dollar volume with $3.1B of sales or 79% of the $3.9B sold citywide.

The highlights from each report include the following:

Manhattan (south of 96th Street on the east side and south of 110th Street on the west side)

• 118 transactions occurred, a 48% increase over 1Q10 and an increase of 2% over 4Q10

• 137 properties sold, an increase of 10% from 4Q10 and 34% from 1Q10

• The aggregate sales consideration was $3.1B, an increase of 40% over 1Q10, but 37% off the $4.8B from 4Q10, which produced the highest quarterly dollar volume in the past 10 quarters

Brooklyn

• 124 transactions occurred, a 33% increase over 1Q10 but down 19% from 4Q10

• 146 properties sold, an increase of 40% from 1Q10 but down 12% from 4Q10

• The aggregate sales consideration was $324M, an increase of 103% over 1Q10, and 33% from the $244M in 4Q10

Queens

• 66 transactions occurred, down 8% from 1Q10 and down 10% from 4Q10

• 76 properties sold, down 7% from 1Q10, and nearly level with 4Q10's 78 properties sold

• The aggregate sales consideration was $282M, an increase of 103% over 1Q10, and 34% from 4Q10

Northern Manhattan (north of 96th St. east of Central Park and north of 110th St. west of Central Park)

• 15 transactions occurred, down 42% from 1Q10 and 4Q10

• 25 properties sold, down 4% from 4Q10 and down 29% from 1Q10The aggregate sales consideration was $61M, down 48% from 1Q10, and down 13% 4Q10

The Bronx

• 42 transactions occurred, a 40% increase from 1Q10 and down 9% from 4Q10

• 49 properties sold through 1Q11, an increase of 23% from 1Q10, but still 21% off 4Q10 volume

• The aggregate sales consideration was $147M, more than doubling 1Q10 volume and down 14% from 4Q10

Knakal further commented, "We expect the dollar volume of sales to increase by 40% to 50% in 2011 over 2010 levels. We also expect to see the number of properties sold climb by 20% to 25% over levels seen last year. On the value side, we expect healthy appreciation this year in Manhattan and anticipate values to stabilize in the outer boroughs as fundamentals begin to firm. Right now, everything looking forward is very positive. The only caveat to that outlook is the potential impact of interest rate increases which is just a matter of when, not if."

---