Has Multifamily Wavered? Where Are Residents Headed Next?
Ariel Property Advisors’ recently released Multifamily Quarter in Review: Q2 2016 showed New York City multifamily sales remained largely stable in Q2 2016, despite global economic turmoil.
The market sustained gains in year-over-year dollar volume despite modest declines in transaction and building volume.
In Q2 2016, New York City saw 174 transactions comprised of 288 buildings totaling $3.7B in gross consideration.
This represents a 17% increase in dollar volume, a 19% decrease in transaction volume and a 23% decrease in property volume compared to Q2 2015, which saw 372 properties trade across 216 transactions totaling $3.2B in gross consideration.
Figures from last quarter were relatively even with Q1 numbers, with dollar, transaction and building volume all trending within 10% of the previous quarter.
Notably, pricing throughout the boroughs either held or showed slight appreciation by most measures.
Six-month trailing averages show gross rent multiples up by 1.47 points year-over-year. The average price per SF in Brooklyn is approaching $400/SF, compared to $300 a year ago.
Average capitalization rates are down 60 basis points in The Bronx, and the average cap rate for each borough sits at 5% or below.
The company’s Investment Research Division also released two Neighborhood Reports.
The first discusses the 7 Line’s transformative effect on Queens and focuses on how residents continually search for the next up-and-coming value neighborhood in which they will be offered better living amenities at a more affordable price point in New York City.
This prospect of neighborhood value is becoming increasingly evident along the Queens-bound 7 train.
“Just as the Brooklyn-bound L train shifted the boundaries of 'cool' from Williamsburg to Bushwick, the 7 line can do the same for Queens,” Aryeh Orlofsky, director of investment research, tells Bisnow.
Aryeh expects residents to be pushed further into Queens in search of less expensive housing as Long Island City continues to mature.
“Riders may potentially begin to tack on an additional two minutes to their commute time in exchange for 20% lower rents in Sunnyside," he adds.
Notably, the spotlight is starting to shine on neighborhoods such as Sunnyside, Woodside, Elmhurst, Jackson Heights and Corona, as well as Flushing.
The second Neighborhood Report, which focuses on the development of Hudson Yards on the Far West Side of Manhattan, reviews plans for 24M SF of new office space and 13,500 new residential units.
“With a projected 47,000 new residents coming to the city each year, the Hudson Yards rezoning has allowed the city to expand capacity for both residential and commercial space in a planned and methodical way,” Ariel VP Howard Raber tells Bisnow.
The report provides readers a reminder of New York City’s constant evolution, technological advancement, and commercial and residential boom.
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