Chris Waggoner Photography

4Q 2019

Block by Block

B6 Real Estate Advisors NYC Market Insights.

A comprehensive data analysis providing macro and micro market trends for NYC commercial real estate.

Chris Waggoner Photography

2019: Year in Review

2019 was a tumultuous year for the New York City investment sales market. There was Amazon’s derailed plan for its HQ2 in Long Island City, which was supposed to be a boon to Queens real estate. Then sweeping rent reform legislation from the state government brought concerns of larger upheaval within the multifamily sector.

With external factors potentially wreaking havoc, the investment sales market finished 2019 with a total dollar consideration of just under $34B — a decline of 7% from 2018 but a slight increase (+2%) from two years ago. Transaction volume, however, did produce fewer than 2,100 transactions for the first time since 2011.

Across New York City, several asset classes outperformed their 2018 results. The office sector saw a 25% increase in dollar volume and retail activity nearly doubled, signaling a thawing of that sector after a tough 2018. And industrial dollar volume rose to a record high, as we discussed in Q3.

Here’s a look at 2019, in a nutshell:

$33.7B
Dollar Volume
7% YoY
1,835
Transactions
33% YoY
$627
Price Per Square Foot
12% YoY

*Numbers shown are year-to-date, 1Q’19 – 4Q’19

4Q19 Update

The fourth quarter of 2019 saw 350 transactions worth $9.2B in activity across Manhattan, Northern Manhattan, Brooklyn, Bronx and Queens.

Here are our key takeaways from Q4:

  • Dollar volume in Q4 surpassed that of the second and third quarter. It was driven by a series of large transactions, which pushed the average sales price to its highest point since 2Q16.
  • Manhattan rounded out the year strong. Both dollar volume and transactions increased quarter-over-quarter.
  • Demand for industrial and mixed use properties dropped in Q4, despite both sectors performing well throughout the year.
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Dollar Volume

Quarterly totals, 2009—2019

Dollar Volume

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Transactions

Quarterly totals, 2009—2019

Transactions

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Price per Square Foot

Quarterly mean $/SF, 2009—2019

Price per Square Foot

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From a dollar volume perspective, it was a strong quarter for Manhattan. Total volume grew by more than 20% quarter-over-quarter, topping $6.2B for the first time since 4Q17. The multifamily sector was a surprising benefactor, primarily due to the closing of The Roosevelt Landing Portfolio by L+M and Invesco in October.

Other markets were a different story. The number of transactions dropped quarter-over-quarter In Queens (86), Bronx (36), and Northern Manhattan (16). Brooklyn’s decline was particularly precipitous, where transactions slumped to their lowest level (150) since 1Q13.

Price per square foot reached $616 in Q4 across core asset types, just below the citywide average ($627) for 2019.

Looking Ahead: B6’s 2020 Predictions

So where’s the market headed in 2020? We asked members of our investment sales and capital advisory teams to give us their takes in a special report we published last week. In it, we answer questions like:

  • How much do we anticipate dollar volume, transactions, and cap rates rising this year?
  • Which borough is the one to watch for increased activity?
  • Will multifamily investors return to the market in 2020?

B6’s 2020 Predictions Report

Special Report

Methodology

All metrics presented in this report — Dollar Volume, Transactions, Price per Square Foot, and Price Per Buildable Square Foot — are based on closed sales that occurred before December 13, 2019. Only portfolios located within Manhattan, Brooklyn, Bronx, or Queens with a sale price of at least $1,000,000 were included in our calculations. We consider the divide between the Manhattan and Northern Manhattan markets to be 96th Street on the eastside and 110th Street on the westside. Data comes from Reonomy, RCA, ACRIS, NYC Open Data, and our own data repositories.

We used the following definitions to record the property type of each transacted building:

  • C1, C2, C4, C5, C9
  • D1, D2, D3, D5, D8, D9
  • K4 and all “S” classes (S0, S1, S2, S3, S4, S5, S9)
  • select “K” classes (K1, K2, K3, K5, K6, K9) / select “R” classes (R5, R7, R8, RK)
  • All “O” classes: (O1, O2, O3, O4, O5, O6, O7, O8, O9) and RB
  • All “E” classes (E1, E3, E4, E6, E7, E9), all “F” classes (F1, F2, F4, F5, F8, F9) and RW
  • G0, V0, V1, and other properties purchased for development

We excluded the following property types from our analysis altogether:

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