November Multifamily Sales Significantly Down As Brooklyn Shows Only Positive Signs Per PropertyShark

PropertyShark is continuing to analyze the multifamily sector in New York City and what they have seen is that multifamily sales volume is significantly down in what they deem an ongoing slowdown. The report analyzed sales in Manhattan, Brooklyn, the Bronx and Queens in order to prepare their report with only the borough of Brooklyn showing sales volume activity up during November. Sales volume for the year is down significantly as well. Most believe that the downturn in sales being attributed to the Housing Stability and Tenant Protection Act of 2019.

The overall volume of sales in New York City was down 60% from same time period of a year ago to $412 million. Sales activity only saw 71 transactions close during the month. Transaction were down 35% from a year ago with the amount of units being transferred down 65%. For the year, the city so far has recorded a sales volume of $7.34 billion. This is down $3.83 billion from the period of January 1, 2018-November 30, 2018. Transaction activity in multifamily is down by 316 properties during the same period as only 893 sales have been recorded in the first 11 months of 2019. 2018 saw 1,209 deals close from January to the end of November. Units being transferred via the 893 sales was 20,124 between January 1 and November 30, 2019. This is significantly down from the units transferred in 2018 where 44,308 units were moved.

Here is a breakdown per borough of multifamily sales for November 2019:

Brooklyn: Brooklyn was the only borough that saw positive sign with respect to sales volume. Sales volume was up 26% totaling $146 million for the period and bolstered significantly by the sale of 39 Waverly Place at $67,250,000. Transactions were down in the borough with only 28 recorded which was 20% lower than the same period in 2018. Units transferred was down 29% from 2018 with only 264 units moved. For the overall year 5,617 units have been moved for the year. This is a tremendous 63% drop year over year. Volume has also been down 41% compared to 2018.

Manhattan: Sales volume was down 55% to $156 million for November. Sales transactions were also down 35% with only 22 closings recording during the period. Only 335 units were transferred during the period which is down 64% year over year. With respect to the year of 2019 there were 6,589 units sold during January and November. This was a 54% drop from the same period last year. Sales volume recorded at $3.73 billion, which is $1.64 billion less from the same period last year.

Queens: Queens saw their sales volume drop 83% year over year. The volume totaled $83,862,500 for the month. It should be noted that November of 2018 saw unusual high sales activity with over $500 million. Transactions were only down 7% from a year ago as 14 transactions were recorded for the month. The amount of units transferred equaled 2,797 which is a decreased of 65% from 2018 for the January 2018 through November 2018 period. That number of units transferred for November 2019 was 306 which is a 79% year-over-year drop.

Bronx: Sales volume was down 61% from November 2018 coming in at a little over $23 million. Only 7 multifamily dears were closed in November. Between January 1 and November 30 in 2019 the Bronx saw volume down 21% totaling $867 million. Unit volume transferred during the period was also down 28%.

BJD Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

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Housing Reform Sends NYC Multifamily Sales Tumbling Per PropertyShark Report

A new report from PropertyShark indicates that the Housing Stability and Tenant Protection Act of 2019 (TPA) has adversely affected Multifamily sales in NYC. Per the report, multifamily sales are down 76% in volume year over year totaling only $284 million across Manhattan, Bronx, Brooklyn and Queens. At the same time last year, sales numbers were at $837 million for the time period.

PropertyShark analyzed multifamily sales in Manhattan, Brooklyn, Queens and the Bronx for the month of September to get as they say get “an accurate snapshot of the situation on the ground”. Besides finding that sales were down 76%, they also found that sales activity was down 34% against 2018 and there were only 55 deals during this period. That amount to the slowest period in the last 33 months. The volume of multifamily units also are down significant. The report states that sales of units transferred was halved. They state “only 1,146 multifamily units traded hands last month across the four boroughs, while September 2018 saw 916 units traded in the Bronx alone.” Across the four boroughs being reports units transferred was down 51% during the period. 14,509 multifamily units were sold wherein 25,368 was sold during the same period last year.

Across the 4 boroughs here is what the breakdown is:

Manhattan- The majority of the multifamily loss starts in Manhattan as it makes up more than half of sales for NYC and is the influential borough that affects the others. The report indicates that sales dropped significantly by 81% year over year. Sales amounted to $163 million for the month which is a significant dropoff from the $837 million the year before. Sales activity dropped 71% with only 5 deals closed.

Brooklyn- Brooklyn sales volume was down 68% from the same period last year. There were 21 deals that closed with the volume coming in at $57 million. The units traded were also down substantially. For the first 9 months of the year 3,639 units were transferred. In comparison 14,006 were traded during the same period last year.

Bronx- Bronx sales activity was down 64% with only 8 deals closing in the period. Sales volume came in at $28 million which is down a whopping 82% from 2018. Year to date sales are down 15% at $777 million. The report also indicates that prices were down 27% to $128,041 from 2018.

Queens- Queens was the only borough that showed positive figures. In the borough, there was a 100% increase in sales at $29 million which is up from $14.5 million from 2018. There was an 86% of sales activity as 147 units were transferred in 13 deals.

BJD Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://bjdpropertymanagement.com/housing-reform-sends-nyc-multifamily-sales-tumbling-per-propertyshark-report/

Visit us at www.bjdpropertymanagement.com

Commercial Real Estate Leaders Believe It Is Time To Take A Stand On Government Overreach

A recent article on Bisnow has an interesting article where commercial real estate executives addressed the challenges facing the industry as government continues to enact legislation that adversely affects the industry as a whole. The general consensus of the executives spoken to is that it is now time that the industry acts or there may be negative consequences that may be substantial and permanent.

According to the Real Estate Board of New York (REBNY) there was total of $22.4B worth of commercial properties sold in the first half of the year. It was a 17% drop in the number of transactions. In the multifamily sector the total dollar volume fell 37% between the first half of 2018 and 2019. Transaction also dropped by 31%. According to a Commercial Observer, Robert Knackal of JLL states “Manhattan are on pace for $2.6 billion dollar volume in sales this year, a 42 percent drop from the $4.5 billion which occurred in 2018. This total would be 78 percent below the record $12 billion of sales that occurred in 2015. Taking the $5.46 billion Stuyvesant Town / Peter Cooper Village transaction out of the 2015 statistics is appropriate given the massive size of that transaction. Removing that sale from the data, the present pace is still 61 percent below the activity seen in 2015.” He believes that sales have been disappointing and we do not know the true impact on property values until we see the numbers coming in the next quarters.

REBNY President states “The results were unsettling, REBNY’s analysis indicates the drop has already resulted in a $66M loss in tax revenue for the city. I would like to represent to you that the decline in investment sales was an aberration and won’t be repeated. Our fear, though, is that it’s the start of a trend. There’s been a series of policy decisions at a federal, state and city level, the elimination of [the state and local tax deduction], rent regulation changes and the city’s approach to reducing greenhouse gas emissions that we believe will lead to a significant disinvestment in New York City over time.” Besides the rent reform regulations which has had a chilling effect on the industry, there are also factors that are political in nature at all levels that are affecting investment in multi-family properties. L&L Holding Co. President Robert Lapidus indicated this. He stated “The political environment is the worst I’ve ever seen. I always used to think that the mayor of New York City had a much bigger impact on my business life than the president. And now there’s a situation where they’re both having severe adverse impact. He continued by stating that the impact of legislation and the political climate is a “disaster”. “Whether you look at the regulations up in Albany, you look at chasing Amazon out, there’s a lot of fingers to point. Those are both disasters. They are disasters. And it’s hard to come back from that.”

We are also beginning to see large developers default of their loans. A recent article by the Wall Street Journal indicated that two landlord with large portfolios of rent-regulated apartments have defaulted on $200 million dollars in loans. Besides developers defaulting on loans which will affect NYC’s tax base, the city will also have challenges as to the crumbling infrastructure, homelessness and “crazy” taxes according to Vornado Executive Vice President Glen Weiss. He also believes that the industry has to act in order to save it. “Certainly, we’re not feeling great about the world and the atmosphere by which we’re trying to do business in,” he said. “We’ve really got to take a stance on this for our industry … It has to get fixed. If it doesn’t get fixed, all this talk about all these companies wanting to be New York, the war on talent and building buildings, it’s going to end.”

We are also in agreement with the real estate heavyweight in believing that there needs to be a fight for the industry. Clearly the actions of the political majority here in New York City and in Albany appear to be short-sighted and will have adverse affects leading into the next decade. Hopefully common sense will prevail.

BJD Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

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