Investors give NY market a little Valentine’s hug as sales tick up

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In the second half of 2020, investment sales in New York City experienced moderate increases in both sales volume and transactions after declining sharply in the first half of 2020, according to the Real Estate Board of New York (REBNY)’s 2020 Biannual Investment Sales Report, signaling that the market is beginning to recover.

Citywide total investment sales volume increased to $11 billion in the second half of 2020 from $10.5 billion in the first half of 2020, representing a five percent increase in sales volume. Three of the five boroughs – The Bronx, Queens and Staten Island – helped drive this with increased local market activity.

Citywide total investment sales transactions totaled 1,356 transactions in the second half of 2020 up from 1,221 transactions in the first half of 2020, representing an 11 percent increase in transactions.

These numbers still represent large year-over-year declines as the public health and economic crises continue to have lasting impacts on the industry.

Citywide total investment sales volume declined 41 percent year-over-year while citywide transactions declined 21 percent year-over-year. This decline builds upon a 14 percent decrease in investment sales volume from the second half of 2018 to the second half of 2019 and 18 percent decline in transactions over the same period.

“While the moderate increases in sales over the last half of 2020 are encouraging, New York still has a long road to recovery ahead and it will be critical for industry stakeholders and elected officials to work together to rebuild the City’s economy,” said REBNY President James Whelan.

JAMES WHELAN

“To continue building on this spark in activity, we need to secure more state and federal aid, increase rapid testing and vaccination distribution and put in place policies at the local, state and federal levels that will encourage job creation and private investment to stimulate economic activity and bring New York back.” 

Sales volume for vacant land transactions citywide declined 80 percent year-over-year, totaling $251 million. The number of transactions declined 35 percent year-over-year to a total of 195 transactions, with an average price of $1.3 million  representing a  69 percent decline.

“This analysis – especially the sharp decline in vacant land transactions and sales volume – coupled with the news of record low construction activity in 2020, illustrates the urgent need for robust infrastructure investment and a focus on development to help spur the market,” Whelan said. “We need to place emphasis on creating good jobs and rebuilding New York’s economy.”

Additional key findings from the report include:

  • Office sales volume citywide declined 64 percent year-over-year to $2.88 billion. Total transactions declined 43 percent year-over-year to a total of 121 in the second half of 2020, with an average price of $23.8 million. This represents a 37 percent drop in average price year-over-year.
  • Multifamily rental building sales volume citywide decreased 34 percent year-over-year, totaling $2.4 billion. Transactions declined 20 percent year-over-year to a total of 452 in the second half of 2020, with an average price of $20.6 million. This represents a 43 percent drop in average price year-over-year.
  • Retail sales volume citywide decreased three percent year-over-year, totaling $1.3 billion. Transactions declined 18 percent year-over-year to a total of 221 in the second half of 2020, with an average price of $5.8 million. This represents a 17 percent increase in average price year-over-year.

REBNY’s Biannual Investment Sales Report is New York City’s most comprehensive compilation of investment sales data. Created in 2015, the report captures citywide and borough breakdowns of closings data for 10 different property types – multifamily rental elevator, multifamily rental non-elevator, office, garages/gas stations/auto, vacant land, industrial, hotel, retail, commercial condo, and other. All data on recorded sales are provided by the New York City Department of Finance (DOF) Automated Register Information (ACRIS).

Download the complete Biannual Investment Sales Report for the second half of 2020 here.

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