Ariel Property Advisors' November Multifamily Report shows jump in dollar volume

The dollar volume of New York City multifamily transactions in November jumped 128% year-over-year and 114% month-to-month due to a number of large, institutional sales, according to Ariel Property Advisors' Multifamily Month in Review for November. This activity suggests that the soon to be released fourth quarter figures will propel 2013 sales beyond the remarkably high levels seen in 2012, which were buoyed by the expiration of the Bush tax cuts. In November, New York City saw 52 transactions comprised of 160 buildings totaling $1.334 billion in gross consideration, the highest monthly dollar volume this year. Year-over-year, transaction volume declined by 13% , and building volume rose 48% compared to November 2012, which saw 60 transactions comprised of 108 buildings totaling $585.028 million. November's figures also showed a 58% increase in building volume despite a modest 29% drop in the number of transactions compared to October, which had 73 transactions comprised of 101 buildings valued at $623.57 million. "Owners are taking advantage of today's very low capitalization rates and buyers are borrowing at historically low rates," said Shimon Shkury, president of Ariel Property Advisors. "We think that some of the recent sales volume, especially on the institutional side, has been driven by both parties trying to take advantage of the attractive financing environment before a possible shift in 2014." The following is a breakdown of the November 2013 multifamily data by submarket: · Manhattan. Manhattan led the city in dollar volume with over $800 million in multifamily sales in November, which is a 410 percent increase compared to the previous month and a 149% increase compared to November of last year. This was made possible by three institutional transactions that saw pricing well above $150 million, the largest of which was 251 Cherry Street which reportedly sold for $280 million. · Northern Manhattan. Led by a single portfolio sale comprised of 84 buildings and totaling $350 million in gross consideration, Northern Manhattan saw a year-over-year 607% increase in building volume to 99, and a 768% increase in the dollar volume of those trades to $424 million. The pricing on that portfolio, which featured properties spread throughout the area, represented $230,000 per unit and $212 per s/f. Another notable transaction was the sale of 556-58 West 126th Street, a 40 unit building located on the cusp of Columbia's new expansion that is currently under construction. The asset sold for $15 million, which represents $410 per s/f and $375,000 per unit - levels that are rarely seen uptown but are reflective of the neighborhood's rapidly rising rents. · Brooklyn. With 11 transactions comprised of 17 buildings totaling $42.865 million in gross consideration, it was a relatively slow month for Brooklyn, which has been a consistent leader in transaction volume throughout the year. Pricing, however, remained strong, as evidenced by two notable sales in Northwest Brooklyn. A property at 139 Joralemon Street in Brooklyn Heights fetched $675 per square foot and almost $400,000 per unit, while 756 Union Street reached $470 per s/f in Park Slope. Brooklyn is now commanding the second highest price per square foot of any borough, with average cap rates closing in on 5% for multifamily properties. · The Bronx. The Bronx this month saw nine transactions comprised of 16 buildings and $36.435 million, a decline from previous levels. Though totals for the borough were on the lighter side this month, it is important to note that none of these sales occurred at lower than $90 per s/f, continuing the borough's positive trend in pricing. · Queens. Queens had a representative month in November--seven transactions for 12 buildings valued at $28 million--after an unusually strong month of October. Transaction volume, building volume, and dollar volume were relatively stable year-over-year. Cap rates for the borough also continue to surprise some, remaining just below 5 percent on average. For the six months ended in November 2013, the average monthly transaction volume dropped slightly to 64 transactions per month. For the fifth month in a row, the average monthly dollar volume rose, reaching $906.876 million in November. The six-month average dollar volume is at its highest point in over a year. The multifamily transactions included in the analysis occurred at a minimum sales price of $1 million, with a minimum gross area of 5,000 s/f, and with a minimum of 10 units.