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Manhattan isn’t the only borough that’s experiencing an uptick in multifamily pricing. The 1Q11 Queens pricing improved for both elevator and walkup apartment buildings over the previous quarter. Their cap rates compressed to averages of 5.2% and 6.3% respectively. These caps were within 100 basis points of the 1Q11 Manhattan caps.

One might ask why an investor would go outside Manhattan for this small increase in yield. For starters, you can buy three times the amount of bricks in Queens. The Queen’s average $/SF in 1Q11 was $171 for elevators and $168 for walkups, whereas Manhattan’s  was $518 and $592.

 However, rents can be almost triple in Manhattan. In a prewar building, Manhattan rents can range from $60-$75/SF, whereas Queens rents are generally in the mid $20s/SF. With similar operating expenses, the future upside case for Manhattan is pretty strong; but if you want stability, Queens product is hard to dispute.

Read More of James Nelson's blog at NYInc

Neighborhoods: Kew Gardens/ Agents: Paul Massey Jr.