The New York City investment sales market set an all-time record in quarterly dollar volume in 1Q15 with $20.8 billion sold, surpassing the previous record of $20 billion established in 1Q07. Large ticket sales dominated the first quarter headlines, with three sales over $1 billion occurring in 1Q15 compared to four in all of 2014. These large transactions, which all occurred in Manhattan, meant the borough contributed 81% of total dollar volume for New York City. The city is on pace to record 4,936 building sales in 2015, with 1,234 buildings sold in 1Q15. This year’s total number of buildings sold is expected to fall behind 2014’s record of 5,532 properties sold.
“After an incredible 2014, with more investment properties selling in New York City than ever before, it is remarkable that the market is continuing to roll along. The dollar volume in 1Q15 established a new record and expectations are for this unprecedented level of activity to continue throughout the year. New York real estate has become the hard asset of choice for wealthy investors from across the country and around the globe,” said Bob Knakal, Chairman, New York Investment Sales.
Some highlights include:
· Global capital seeking safety will look towards the U.S. with ‘gateway cities’ its preferred destination – with the US economy set to outperform most of the developed world in 2015, and New York City’s economy expected to outperform most of the nation, New York City is an attractive destination for foreign and domestic capital placement.
· Citywide dollar volume set an all-time quarterly record with $20.8 billion – we expect dollar volume to remain high throughout the year, ending 2015 with $65 billion, an all-time high.
· On a submarket level, Brooklyn also set an all-time record for its dollar volume with $2.3 billion, representing 61% of total outer borough dollar volume.
· Large transactions dominate the headlines with three transactions over $1 billion making up 25% of total dollar volume, led by the acquisition of 3 Bryant Park by Ivanhoe Cambridge and Callahan Capital Properties.
· Price per square foot was down year over year, finishing 1Q15 at $519, mainly due to a lackluster quarter by the retail sector.
· For the first time in history, citywide cap rates fell below 5% to 4.8% with all property sectors in Manhattan recording cap rates below 4%.
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