New York City sales market showing consistency

REBNY’s Investment Sales Report for the first half of 2016 recorded a dip in both total consideration and number of transactions compared to the first half of 2015, which posted the largest total consideration and greatest number of transactions since REBNY began tracking activity in 2014.

Total consideration, or the monetary value for completed transactions, for all five boroughs was $29.5 billion, a decrease of 20 percent from the first half of 2015. The number of total transactions also dipped to 2,581, compared to 3,174 in 2015’s first half, a 19 percent decline.

What is important to note is that the decline in consideration and transaction in this period was based on a comparison of the first half of 2015 activity which was at a historic high.

Looked at over time, the numbers in our latest report are more consistent with the results REBNY has seen since we first began tracking investment sales two years ago. In that time, the average citywide investment sales consideration per half year has totaled $29.6 billion, and transactions have averaged 2,604 per half year.

Of the citywide investment sales considerations, office buildings had the largest share at 41 percent, or $12.1 billion. In fact, the five largest sale prices were for office buildings: the $1.9 billion sale of 787 Seventh Avenue, formerly the AXA Equitable Center; the $1.8 billion sale of 390 Greenwich Street; the $1.4 billion sale of 550 Madison Avenue, The Sony Building; the $1.3 billion sale of 1285 Avenue of the Americas; and the $900 million sale of a 49 percent stake in 1211 Avenue of the Americas, the News Corporation Headquarters.

Another key finding of the report was that Manhattan investment property trading continued to outpace the other boroughs in total consideration, totaling $21.2 billion – 72 percent of total citywide consideration.

However, in terms of greatest year-over-year percentage change, the Bronx showed the greatest increase, rising four percent from $1.5 billion to $1.55 billion. Activity was particularly notable in the Bronx, which not only posted increases in consideration, but also accounted for more than a quarter of multifamily sales.

Multifamily rental building sales accumulated $4 billion in consideration for elevator buildings and $3.9 billion for non-elevator buildings – slight dips of 14 and 11 percent, respectively. The highest priced individual multifamily rental building sales in the first half of 2016 were for elevator buildings in Manhattan: the $390 million sale of a 325-unit rental at 420 East 54th Street, Sutton Place; the $270 million sale of the 310-unit rental at 760 Third Avenue in East Midtown; the $211 million sale of the 214-unit rental at 229 Seventh Avenue in Chelsea; and $200 million sale of the 915-unit rental complex at 2225 Fifth Avenue in Harlem.

Garages, gas stations, and vacant land saw a 48 percent decline in consideration, while the number of transactions declined 34 percent. The top sales in this category were the $390 million sale of 163 Front Street in Manhattan, the $158 million sale of the vacant lot at 625 Fulton Street in Downtown Brooklyn, and the $101 million sale of the garage at 145 West 47th Street in Manhattan.

Hotel consideration declined 64 percent year-over-year, with Manhattan accounting for 91 percent of citywide hotel sales consideration, for a total of $1.5 billion in the first half of 2016. A significant portion of this drop was attributed to the $1.95 billion sale of the Waldorf Astoria that drove consideration in the first half of 2015. The highest priced hotel transactions this half of the year were the $170 million sale of the 211-key hotel at 138 Lafayette Street in SoHo, and the $149 million sale of the 596-key hotel at 440 West 57th Street in Hell’s Kitchen.

For REBNY’s full First Half 2016 NYC Investment Sales Report, including a borough-by-borough breakdown, please visit www.rebny.com.