Central Harlem and Washington Heights dominating Uptown multifamily sales

Two neighborhoods—Central Harlem and Washington Heights—dominated multifamily sales in Northern Manhattan during the six months ending on April 30, 2012, according to our firm's most recent Multifamily Month in Review: New York City. Central Harlem had 14 transactions consisting of 23 buildings and 714 units valued at $131.5 million. Washington Heights had 13 transactions consisting of 28 buildings with 1,030 units valued at $148.7 million. It's particularly noteworthy considering that the only other New York City neighborhood with more multifamily transactions during this period was the Upper East Side, which saw 16 transactions consisting of 32 buildings with 846 units. In total, there were 40 multifamily transactions in Northern Manhattan in the six months ended April 30, 2012, comprised of 69 buildings with a total value of $333 million. A total of 2,190 units traded for an average of $177 per s/f or an average price per unit of $147,262. By comparison during the six-month period, Manhattan below 96th St. had 72 transactions with 120 buildings valued at $1.69 billion; Brooklyn had 80 transactions and 119 buildings valued at $586.5 million; the Bronx had 48 transactions with 65 buildings valued at $249.4 million; Queens had 23 transactions with 36 buildings valued at $178.7 million. Multifamily sales in Northern Manhattan continued at a brisk pace in April and the area captured 22 percent of the multifamily buildings sold in New York City during the month with nine transactions comprised of 14 buildings with 427 units totaling $60.475 million in gross consideration. Portfolio Sales Are Back A flurry of portfolio sales since the beginning of the year contributed to sales activity in Northern Manhattan and the trend has continued through April, according to data in our most recent April multifamily report. An example of this trend is our firm's closing of 546-52 West 146th St., a three-building package that included 70 units. After the market picked up significantly in the beginning of the year, interest in these properties escalated and the portfolio ended up receiving close to 25 bids. In the end, an international group bought the buildings for $8.9 million, which translated to more than $190 per s/f and a cap rate of less than 6%. Portfolio sales handled by other firms in April included 245 Seaman Ave. and 570 Isham St. in Inwood, which sold for $6.7 million or $160 per s/f; 501 West 169th St. and 255 Audubon Ave. in Washington Heights, which sold for $5.65 million or $125 per s/f; and 550-552 West 174th St. in Washington Heights, which sold for more than $5.1 million or $139 per s/f. Another notable sale during the month included 680 St. Nicholas Ave., a 117-unit apartment building to a local operator for $23.65 million. This $200,000 per unit value reflects the strong demand for such property's subject to program based Section 8 contracts. Public and Private Development Adding Momentum The housing market in Upper Manhattan continues to benefit from institutional and government supported development in the area. We're seeing a great deal of interest in 556-62 West 126th St., two multifamily properties we're marketing near the 17-acre, $6.3 billion Columbia University campus, an area bordered by 125th to 133rd Sts., Broadway, and 12th Ave. When the first phase is completed in just a few years, the campus will be home to the Columbia Business School, the School of the Arts, the Jerome L. Greene Science Center, the University's Mind, Brain, and Behavior Initiative, a magnet middle school, and a competitive high school attracting students from throughout New York City. Nearby, the NYC Economic Development Corp. and Empire State Development recently issued an RFP to redevelop a 42,000 s/f site located in the heart of Harlem's commercial and cultural core at 121 West 125th St., between Adam Clayton Powell Blvd. and Lenox Ave. The site is currently used as a 450 space parking garage. The city and state agencies said the site has the potential to create as much as 363,000 s/f of commercial space, including a visual or performing arts facility. Combined with rising rents and low interest rates, this pipeline of new developments is presenting investors with attractive multifamily opportunities in Upper Manhattan. More information about the Northern Manhattan market is available in the Multifamily Month in Review: New York City for April at http://arielpa.com/research/reports/. Shimon Shkury is founder and president of Ariel Property Advisors, New York, N.Y.