Outer Borough Investment Sales Mixed
For the past two weeks, the focus has been on the overall investment-sales activity for the third quarter of 2011 along with the market performance on a year-to-date basis. A healthy increase in the dollar volume of sales occurred with $19.2 billion thus far in 2011, up from the $14.2 billion in 2010 and significantly higher than the anemic $6.1 billion in 2009. For some perspective, the volume in 2007, at the peak of the market, was $62.2 billion.
In terms of the number of properties sold, there have been 1,548 traded thus far in 2011. Therefore, the market is on pace for over 2,000 sales this year, which would be up about 22 percent from the 1,690 sales last year and 46 percent ahead of the 1,410 sales that occurred in 2009. Once again, for perspective, there was 5,018 properties sold in 2007 at the peak.
In last week’s column, the focus was on the Manhattan submarket, in which the strongest recovery out of all of the city’s submarkets occurred. This is not unexpected, as Manhattan has always led New York City out of cyclical downturns.
In Manhattan, a significant increase in dollar volume occurred with $16.8 billion of sales thus far in 2011, compared to $11.6 billion in all of last year. The dollar volume of sales in Manhattan is on pace for $22.3 billion this year, a whopping 440 percent increase from the $4.1 billion that occurred in 2009. In terms of the number of properties sold, in the Manhattan market there have been 473 thus far in 2011, approaching the 488 properties sold in all of 2010. The market is on pace for 631 sales in Manhattan this year, more than double the 305 sales that occurred in 2009, but 37 percent below the 999 properties that were transferred at the peak in 2007..
This week, the focus turns to the outer boroughs, as well as Northern Manhattan, to see how each of these individual submarkets is performing.
In Northern Manhattan (north of 96th Street on the East Side and north of 110th Street on the West Side) through the first three quarters of this year, there have been $262 million in investment-sales transactions. If the figure is annulized, the projected volume this year becomes approximately $350 million, which represents a 35 percent reduction from the $534 million in sales last year. This represents the largest drop in any of the city’s submarkets. This 2011 pace is scheduled to be about 28 percent higher than the $273 million that occurred at the low point in the market in 2009. However, the $350 million projected for 2011 will still be 76 percent below the $1.5 billion in sales that occurred at the peak of the market in 2007. This drop also represents the largest decline in any of the submarkets.
With regard to the number of buildings sold, there were just 28 sales in the third quarter, the lowest total for the year and the third straight quarterly drop for the region. There have been 101 sales in 2011 thus far, on pace for 135 for the year. This is exactly the same number that occurred in 2010. This figure is 60 percent above the 84 sales that occurred in 2009 but remains nearly 60 percent below the 327 buildings that were sold at the peak in 2007.