Massey Knakal Reports New York City's Commercial Sales Volume Was Up in 2010, but Pricing Remains Weak

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According to Manhattan-based Massey Knakal Realty Services' 2010 commercial building sales report for the greater New York City area (Manhattan, Northern Manhattan/Bronx, Brooklyn, and Queens), 2010 was a year of mixed results.

"While investment activity has increased dramatically from this time last year we are still finding our way along the bottom with regard to pricing," said Massey Knakal Chairman and Founding Partner Robert A. Knakal.

With so much uncertainty surrounding the investment sales market moving into 2010, New York City showed positive signs of stabilization with a total dollar volume of $14.5 billion. This represented an increase of 131% from the $6.3 billion completed in 2009, but was still 77% below the market peak of $62 billion set in 2007.

Fourth quarter rebounded nicely from a disappointing 3Q'10 with $5.6 billion in sales, the highest dollar volume since 3Q'08. This represented an increase of 109% from 3Q'10 and an increase of 237% from 4Q'09. The total number of properties sold citywide in 2010 was 1,667, representing a turnover of 1.01%, an increase of 16% from 2009's turnover of 0.87% of the total stock of properties.

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)

• There were 473 properties sold, a 47% increase over 2009, but still 53% off the market high set in 2007.
• In 4Q'10, there were 125 properties sold, an increase of 12% from 4Q'09 and up 7% from 3Q'10.
• The aggregate sales consideration in 2010 was $12 billion, an increase of 187% over 2009 which produced the lowest dollar volume in the past five years.

Brooklyn

• There were 569 properties sold, an increase of 19% from 2009.
• In 4Q'10, there were 165 properties sold, an increase of 36% from 4Q'09 and an increase of 27% from 3Q'10.
• The aggregate sales consideration in 2010 was $929 million, an increase of 17% over 2009, but still 76% off the market peak of $3.8 billion set in 2007.

Queens

• There were 307 buildings sold, a decrease of 11% from 2009.
• In 4Q'10, there were 78 properties sold, down 19% from 4Q'09, but up 34% from 3Q'10.
• The aggregate sales consideration in 2010 was $557M, down 6% from 2009, and 77% off the market peak of $2.5 billion set in 2006.

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

• There were 127 properties sold, an increase of 43% from 2009.
• In 4Q'10, there were 26 properties sold, down 7% from 4Q'09 and down 26% from 3Q'10.
• The aggregate sales consideration in 2010 was $509 million, an increase of 75% over 2009, which saw the least amount of volume in the last five years of $290 million.

The Bronx

• There were 191 properties sold, down 5% from 2009.
• In 4Q'10, there were 62 properties sold, an increase of 51% from 4Q'09 and a 77% increase from 3Q'10.
• The aggregate sales consideration in 2010 was $485 million, an increase of 21% over 2009, but still 78% off the market peak of $2.1 billion set in 2007.

"While the volume of sales has been impressive, we expect pricing to continue to vary widely across boroughs and product type. The overwhelming demand for quality product continues to outpace the supply and this dynamic will exert upward pressure on values, particularly in Manhattan. However, as the supply of distressed assets continues to climb, this addition to supply will exert downward pressure on value," said Knakal.

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