Multifamily Sales Have Biggest Year Since ’15, Not So Much For Rent-Stabilized Assets


Sales of multifamily buildings in New York City marked their biggest year since 2015, especially in the first half of 2022, but rent-stabilized sales did not perform well and total property sales slowed in the second half of the year due to rising interest rates.

Multifamily sales hit $16.2 billion last year and accounted for 42 percent of the $38.9 billion in investment sales in 2022, according to Ariel Property Advisors

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The most comparable year to 2022 for multifamily investment was 2015 when $19 billion in deals had been struck, according to Ariel president and founder Shimon Shkury. But $5 billion of that was from a single transaction — the sale of Stuy Town to Blackstone — which therefore makes 2022 the biggest year for multifamily sales in the last 20 years in Ariel’s opinion.

“In terms of multifamily transactions, I think that the free market is still going to stay a very strong candidate for all capital to invest in,” Shkury said. “I think the pricing of this asset class is going to stay stable although interest rates have gone up, because we still experience some rent growth, although at a lower pace, and the same fundamentals will probably continue this year.”

Overall, the dollar volume of all asset classes was 26 percent more compared to 2021, and the 2,745 transactions represented 15 percent more trades than that year, according to Ariel. 

Rising interest rates “affected the different distribution of trades, but that said, it’s incredible to see that the drop in volume wasn’t as substantial as everybody expected,” Shkury said.

However, while sales of multifamily buildings — especially in Brooklyn — were strong in 2022, 75 percent of those transactions were for free-market buildings, Ariel found. Rent-stabilized buildings only had about $3 billion worth of sales in 2022, nearly half the 2015 high of $6 billion and a bit closer to the 2021 total of $2.6 billion.

The amount of profit in rent-stabilized buildings is static while costs of owning and operating such buildings may rise significantly, Shkury said. Also, laws that allowed landlords to hike the monthly fee for rent-stabilized units if improvements are made between tenants were done away with in 2019, meaning about 42,000 of these apartments are kept vacant by choice of the owner, he said.

“If you think about what’s going to happen in the next five years, this issue is going to be incrementally worse as we move along,” Shkury said. “I think the legislators are starting to notice that, and those who invest in rent-stabilized multifamily today are under the assumption that things will have to change.”

The biggest sale of a multifamily asset in New York City was 8 Spruce Street, another purchase by Blackstone from Nuveen and Brookfield (BN) Asset Management in the early days of 2022 for a total of $930 million, Commercial Observer reported at the time. The sale was finalized in June, according to the Ariel report.

The $837 million sale of 616 First Avenue to Black Spruce Management March 2022 was the second highest. Third was the bundled acquisition of 421 East 60th Street, 1113 York Avenue and both 525 and 530 East 72nd Street for $825 million by Black Spruce.

Mark Hallum can be reached at