Northern Manhattan commercial real estate property sales up 36% in first half 2012 compared to second half 2011

The number of commercial real estate properties sold in Northern Manhattan increased 36 percent in the first half of 2012 compared to the second half of 2011, according to Ariel Property Advisors' Northern Manhattan 2012 Mid-Year Sales Report. In the first half of 2012 there were 114 transactions comprised of 166 properties totaling $415.902 million in gross consideration, compared to the second half of 2011, which saw 101 transactions comprised of 122 properties totaling $364.684 million in gross consideration. The report tracks multifamily, development, user, commercial, and special purpose property sales over $1 million in the borough. Even more striking are year-over-year comparisons, for first half of 2012 figures represent a 69 percent increase in dollar volume and a 37 percent increase in the number of properties that sold compared to the first half of 2011, which saw 99 transactions, consisting of 121 properties valued at $245.638 million. "Much of the increase in the number of properties sold and higher dollar volume can be attributed to a greater number of portfolio sales taking place in Northern Manhattan, "said Michael A. Tortorici, vice president of Ariel Property Advisors. "Multifamily transactions continue to strengthen, both in volume and pricing, and demand is continuing to exceed supply, pushing prices up. User property values also are showing consistent improvement." Tortorici continued that development site sales are occurring in much greater frequency, as evidenced by the fact that almost as many development sites sold in the first half of 2012 as sold in all of 2011. "As new development remains scarce and new condo supply is running low, we anticipate many new projects to start breaking ground during the second half of the year," Tortorici said. The report points out that real estate fundamentals continued to strengthen for property owners. Unemployment remains high, but many believe this is partially attributed to the rate at which people are moving to New York City outpacing the area's job growth rate. As a result, rents have already shot past pre-crisis levels in prime Manhattan and are expected to do so in Northern Manhattan by the end of the year. Upper Manhattan also becomes a more attractive alternative for residents whenever values soar below 96th Street, as they are now. The report highlighted the following: * Multifamily: During the first half of 2012, Northern Manhattan's multifamily asset class saw 51 transactions consisting of 86 buildings sold for an aggregate consideration of $298.136 million, which was 72 percent of the area's total dollar volume. Compared to the second half of 2011, this activity represents a 9 percent increase in transaction volume, a substantial 18 percent increase in dollar volume and a 37 percent increase in the number of buildings sold compared to second half 2012, which saw 47 transactions consisting of 63 properties totaling $253.208 million in gross consideration. This dynamic can largely be explained by a greater number of portfolio sales taking place. "Several factors are contributing to higher multifamily prices uptown," Tortorici said. "Rents are set to go beyond pre-crisis levels. Interest rates are at historical lows. Global economic wariness has kept a lid on fuel prices. Finally, international demand for New York real estate is insatiable." * Development Sites: Activity appears to be picking up for the Northern Manhattan development site market. While dollar volume is down compared to the 2nd half of last year, transaction volume is accelerating. In fact, our research showed 14 development site transactions taking place in the first half of 2012, a 171 percent increase in transaction volume compared to the second half of 2011, and a 36 percent increase compared to the first half of 2011. "Anecdotally, based on the development sites our company has in contract right now, we expect this uptick to continue in the second half of 2012," Tortorici said. * User Properties: Upper Manhattan saw an increase in the number and dollar volume of user transactions during the first half of the year, which saw 41 transactions totaling $49.126 million in gross consideration. Prices per square foot continue to enjoy slow but steady increases. The average price per square foot was $341 during first half of 2012, a healthy increase from $316 which was recorded in 2011 and the highest level seen since 2008. For more information, please contact Tortorici at 212-544-9500, ext 13, [email protected]. For a copy of the Northern Manhattan 2012 Mid-Year Sales Report, please see http://arielpa.com/newsroom/report-APA-mid2012-Sales-Report. Ariel Property Advisors is a New York City investment property sales firm with an expertise in the multifamily market. The firm also produces a number of research reports including the Multifamily Month, Quarter, and Year in Review: New York City reports, and the Northern Manhattan, Brooklyn, and Bronx Sales Reports. More information is available at arielpa.com.