Q2 2012 New York, New York Apartment Property Sales Analysis

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Q2 2012 New York, New York Apartment Property Sales Analysis

Metro Volume and Pricing

Single-property apartment building sales continued to be solid in New York in the second quarter of 2012, according to Reis Transaction Analytics.* A total of 96 buildings changed hands during the quarter for $1.1 billion at a mean price of $319,500 per unit. A total of 22,100 units have sold over the past four quarters, or 13.0% of the total inventory. In the leading second quarter sale, The Zucker Organization sold the 706-unit Rivergate to UDR Rivergate LLC for $443.4 million ($628,050 per unit) in July. A UDR purchase for $630 million had been the leading first quarter sale as well, and is the largest of the past 12 months.

Top Submarkets

The Morningside Heights submarket leads in dollar value sold over the past four quarters at $1.2 billion, and in units sold at 4,250. This less affluent community had also seen a surge of investment sales during the housing bubble. The Upper East Side leads in average price at $739,703 per unit.

Cap Rate Comparisons and Forecasts

The mean cap rate for second quarter sales was 6.3%, about the same as the prior U.S. and Northeast Region averages but down from 6.5% the previous quarter. Apartment cap rates for New York have tracked these broader averages for nearly three years after having been lower previously. The rolling 12-month cap rate is 6.3% for New York City for the second quarter of 2012, unchanged from the prior two quarters. The rate is expected to fluctuate between 6.0% and 6.4% through 2016.