First Half 2019 NYC Investment Sales Report

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New York City’s investment sales market reached $22.4 billion citywide in the first half of 2019, which is an increase over 2018, though the number of total transactions sharply dropped, according to the Real Estate Board of New York’s (REBNY) Investment Sales Report.

The total citywide consideration (monetary value for all recorded sales) of $22.4 billion marks a 3% year-over-year increase. This valuation came as a result of 1,750 total transactions, representing a 17% decrease over the same period. The increase in total consideration is due to five large office and retail transactions in Manhattan that collectively totaled $5.15 billion.

Year-over-year dollar consideration increased in the Bronx and Brooklyn and on Staten Island, but decreased in both Manhattan and Queens.

“Although several large transactions buoyed the first half of the year, the total number of transactions in the five boroughs declined significantly,” said James Whelan, REBNY President. “We remain confident in the economic outlook for New York City and hope to see a stronger second half of the year in terms of total investments.”

 Among the other findings from REBNY’s report:

• Sales consideration for multifamily residential buildings decreased 37% year-over-year. Overall transactions of multifamily residential buildings decreased 31%.

• Sales consideration for office buildings ($6.95B) increased 7% from the second half of 2018 and 12% year-over-year. Office buildings represent the majority of citywide total consideration (31%).

• Sales consideration for retail property ($2.56B) increased 46% from the second half of 2018 and 30% year-over-year. However, total retail transactions declined 4.5% from the second half of 2018 and 19% year-over-year.

• Sales consideration for industrial sales ($2.15B) increased 125% from the second half of 2018 and 167% year-over-year.

The five largest investment transactions by sales price, all of which occurred in Manhattan, were as follows:

• The $2.16 billion sale of commercial condos at 500 Hudson Yards in Manhattan.

• A $992 million sale of an office building at 620 Eighth Avenue in Manhattan.

• A $850 million sale of retail space at 424 Fifth Avenue in Manhattan.

• A $592 million sale of an office building at 58 West 15th Street in Manhattan.

• A $566 million sale of an office building at 885 Second Avenue in Manhattan.

INVESTMENT SALES BY BOROUGH

The total number of transactions across the five boroughs was 1,750 in the first half of 2018, a 20% decrease compared to 2,200 sales in the first half of 2018.

Manhattan: Investment sales totaled $14.1 billion, a 3% increase in consideration year-over-year. Similar to the other boroughs, Manhattan had a 22% decline in the total number of transactions year-over-year. Office sales represented the majority of investment sales in Manhattan, with 37% of total consideration in the borough totaling $5.4 billion—a 7% decline year-over-year.

The Bronx: Investment sales totaled $1.33 billion, a 15% increase in consideration year-over-year. The number of Bronx investment sales transactions declined 32% year-over-year. Multifamily rental buildings decreased 45% year over year in total consideration and 47% in transaction volume.

Brooklyn: Investment sales totaled $4.3 billion, a 2% increase in consideration year-over-year. Brooklyn investment sales transactions decreased 20% year- over-year. Brooklyn office consideration increased substantially due to a $928 million office portfolio transfer between Brookfield Properties and Forest City. Consideration for Brooklyn industrial investment sales increased 130% year- over-year, which represent 31% of the total citywide industrial investment sales consideration

Queens: Investment sales totaled $2.41 billion, an 11% increase in consideration year-over-year. The number of Queens investment sales transactions declined 12% year-over-year. Queens industrial investment sales consideration increased 135% year-over-year and represented 42% of the borough’s total consideration.

Staten Island: Investment sales totaled $219 million, a 24% decrease in consideration year-over-year. Garages, gas stations, and vacant lots represent the largest amount of investment sales activity in Staten Island, accounting for 29% of total consideration and 21% of transactions in the borough.

INVESTMENT SALES HIGHLIGHTS BY PROPERTY CATEGORY

Multifamily Rental, Elevator: In Manhattan, multifamily rentals with an elevator accounted for 36 sales or 11% of the borough’s transactions. Those 36 transactions made Manhattan the borough with the most transactions in the five boroughs. Citywide, there were 81 transactions that accounted for 5% of overall transactions.

Multifamily Rental, No Elevator: In Manhattan, multifamily rentals without an elevator accounted for 108 sales or 33% of the borough’s transactions. By number of transactions, this was the most active property category in Brooklyn, which registered 249 sales accounting for 44% of the borough’s transactions.

Office: Sales in this category totaled $6.95 billion, accounting for 31% of the city’s total investment sales consideration. In Manhattan alone, office buildings accounted for 66 transactions, or 38% of the borough’s transactions.

Garages / Gas Stations / Vacant Land: Sales in the garages/gas stations/vacant land category accounted for 18% of the total transactions citywide. This category was the most active category in Staten Island, accounting for 49% of all transactions, and 66 sales.

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