REBNY Report: NYC Investment Sales Consideration and Activity Slows in the First Half of 2017

Monetary value for completed transactions across the five boroughs drops nearly 40 percent to $18 billion; activity dips six percent to 2,419 transactions

New York City investment sales consideration (monetary value for completed transactions) and activity slowed markedly in the first half of 2017 compared to the first half of 2016, according to the Real Estate Board of New York (REBNY) Investment Sales Report. Year-over-year total consideration declined 39 percent to $18 billion, while the total number of transactions declined six percent to 2,419 in the first half of 2017.

Among the driving forces, Manhattan investment sales consideration decreased 49 percent to $10.7 billion in the first half of 2017 from $21.2 billion in the first half of 2016. While transactions in the borough accounted for 60 percent of New York City’s total investment sales consideration, this was the smallest share of citywide consideration Manhattan has accounted for since REBNY started tracking sales in the first half of 2014. Manhattan investment sales activity dipped eight percent to 467 transactions in the first half of 2017 from 508 in the first half of 2016.

Similarly, total sales consideration in:

  • Brooklyn decreased 14 percent, recording $3.6 billion in the first half of 2017 compared to $4.2 billion in the first half of 2016, while total transactions dipped six percent to 849 from 901
  • Queens declined 14 percent to $2.0 billion from $2.4 billion, while the number of transactions slid down four percent to 552 in the first half of 2017 from 576
  • The Bronx decreased 20 percent to $1.2 billion in the first half of 2017 from $1.5 billion, while total transactions decreased 18 percent year-over-year to 361 from 441

Conversely, Staten Island investment sales activity showed strong gains year-over-year. The borough’s sales consideration totaled $300 million, a 61 percent increase, and was comprised of 190 different transactions, a 23 percent increase from the first half of 2016 to the first half of 2017.

“While high value investment sales transactions continued to close across the boroughs this half of the year, uncertainty over rising interest rates and foreign capital has given investors pause,” said John Banks, REBNY President. “Meanwhile, this has created more opportunity for lower-priced parcels with development potential following the extension of the Affordable New York Housing Program, formerly known as 421-a, this year.”

Among property types, the citywide total consideration for:

  • Multifamily rental buildings with an elevator dropped 51 percent to $1.9 billion in the first half of 2017 from nearly $4 billion in the first half of 2016, while transactions decreased 26 percent to 121 from 163 transactions
  • Office properties declined 40 percent to $7.3 billion from $12 billion, while transaction volume dipped eight percent to 185 from 201
  • Garages, Gas Stations, and Vacant land decreased 46 percent to $919 million from $1.7 billion, while activity picked up increasing by 25 percent to 506 from 406 transactions

The three largest investment sales transactions (by sale price) in the first half of 2017 were the:  $2.2 billion sale of the full-block office building at 245 Park Avenue; $1.0 billion sale of the office building at 60 Wall Street; and the $686 million sale for a 50 percent stake in Worldwide Plaza, located on the block bounded by Eighth Avenue, West 50th Street, Ninth Avenue, and West 49th Street.

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