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REBNY: ’16 Investment Sales Stayed the Course

John Banks III Banks: “Investment sales activity was resilient in 2016 with healthy transaction volume across  the five boroughs.”

NEW YORK CITY—Last year’s investment sales market here turned in a performance on par with 2015, according to the Real Estate Board of New York’s investment sales report. The city recorded strong activity throughout the boroughs, though a moderate dip in total consideration was seen in the second half of the year.

Staten Island and Queens recorded gains in closed transactions, while citywide sales of garages, gas stations, and vacant land rose 28% in the second half of 2016. Office buildings dominated the highest-priced transaction rankings while multifamily rental properties without an elevator registered 1,080 sales, the largest number of transactions recorded for any property category.

The total number of transactions closed throughout the five boroughs in the second half of 2016 remained stable at 2,880—1% less than the 2,901 closed last year. Total citywide consideration for the sale of multifamily rental, office, industrial, hotel, and retail properties—in addition to commercial condominiums, garages, gas stations, vacant land and other assets—was $26.8 billion in the second half of 2016, a 22% decline from the $34.3 billion recorded in the second half of 2015.

This difference is attributable to the historic high, multi-billion dollar sales that closed in the second half of 2015, including the sale of Stuyvesant Town–Peter Cooper Village and the office building at 11 Madison Ave.

“Investment sales activity was resilient in 2016 with healthy transaction volume throughout the five boroughs,” says John Banks, REBNY president. “The year-over-year consistency in overall sales was bolstered by growing interest among the city’s diverse asset types.”

The top three, highest-priced transactions closed in the second half of 2016 were for office buildings. These included the $1.15 billion sale of a minority stake in the office building 1095 Ave, of the Americas; the $707 million sale for a portion of the office building 501 W. 30th St., also known as 10 Hudson Yards; and the $652 million sale for a 50% stake in the Olympic Tower at 641 Fifth Ave., including two adjacent retail buildings at 647 and 649 Fifth Ave.

Investment property trading in Manhattan outpaced the other boroughs in the second half of 2016, accounting for 63% of total citywide consideration. Total consideration for Manhattan was $17 billion, a 28% decline from $23.8 billion in the second half of 2015, while activity dipped 6% year-over-year to 652 transactions from 612. The number of hotel trades in Manhattan rose 50% to 24 in the second half of 2016.

Staten Island experienced the greatest nominal and proportional growth closing 273 transactions in the second half of 2016, a 31 % rise year-over-year, while the borough’s total consideration more than doubled to $492 million. The bump in sales volume was driven by trades in the category of garages, gas stations, and vacant land.

Queens investment activity increased 6% to 649 completed transactions from 612 in the second half of 2015, while its dollar consideration remained steady at $3.5 billion. A notable 56% of citywide industrial property sales took place in Queens, while the number of completed transactions for garages, gas stations, and vacant land in the borough grew by 59% year-over-year to 183 in the second half of 2016.

Brooklyn sales of garages, gas stations, and vacant land accounted for 37 % of citywide consideration in this property category and rebounded in total consideration rising 23 % to $802 million from $653 million in the second half of 2015. The number of transactions for this property type in Brooklyn increased by 11% year-over-year to 198 from 179, while Brooklyn’s overall transaction volume for all property types declined six % to 954 from 1,019. The borough’s total consideration dropped 13 % to $4.4 billion from $5.0 billion in the second half of 2015.

Bronx investment sales activity slowed by 3% overall, but posted significant gains in the categories of garages, gas stations, and vacant land as well as industrial and office properties.  The borough’s overall consideration dropped 19 % year-over-year to $1.4 billion from $1.8 billion, while its consideration totals more than doubled in the categories of industrial properties and office buildings along with garages, gas stations, and vacant land.

For the full report, click here.

 

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