New York City’s multifamily market in the second quarter of 2015 was able to continue the momentum of 2015’s first quarter and generate an impressive $3.30 billion in gross consideration. The quarter also saw 364 properties trade over 225 transactions, which is a 33 percent increase in transaction volume compared to the same quarter last year. Boosting significant growth, both Brooklyn and Manhattan saw a number of institutional and portfolio deals again this quarter. Of the trades in Manhattan, the top 10 percent made up approximately 73 percent of Manhattans dollar volume and four of the five largest multifamily transactions to occur in NYC happened in Brooklyn, which contributed to both submarkets ending the quarter with dollar volumes above $1 billion for the second time in as many quarters. Pricing throughout the city continues to evolve by most measures. Gross rent multiples have increased by 1.4 year-over-year and the average price per square foot in Manhattan has eclipsed $900. Compared to last year, average capitalization rates were down 60 basis points in The Bronx, and are down in Brooklyn and Northern Manhattan. These are the signs of solid fundamentals in the market. Institutional caliber multifamily deals had a big second …
Market Reports
The total retail inventory in the Rochester market amounts to 62.5 million square feet. Over the past year, the market has seen an overall decrease in the vacancy rate. The vacancy rate went from 8.0 percent in first quarter 2015 to 7.9 percent in the current quarter. Overall net absorption was positive 182,160 square feet. The general retail sector of the market, which includes all freestanding retail buildings except those contained within a center, reported a vacancy of 4.3 percent at the end of the second quarter 2015. The general retail space in Rochester is 34.3 million square feet. Average rental rates are currently at $12.26 per square foot. The shopping center sector — which consists of 19 million square feet and comprises community centers, neighborhood centers and strip centers — posted 10.9 percent total vacancy and average asking rates of $10.28 in second quarter 2015. Power center space is currently reported to be nearly 4 million square feet with a vacancy rate of 7.5 percent, and a slight decrease in rental rates to $13.46 per square foot. Malls in the Rochester market consist of lifestyle centers, regional malls and super-regional malls. The vacancy rate was 21.2 percent at the …
New York City is booming. The local economy is the strongest it has ever been, with total employment numbers reaching all-time highs totaling over 4.2 million jobs through May 2015. This has led to a strong office market performance during the first six months of 2015, as office-using employment continues to grow, up 2.5 percent over the past 12 months. Demand for space continues to keep availability below 10 percent, and at 9.6 percent, Manhattan availability is down 50 basis points from last year. Despite minimal increases in Manhattan overall asking rents, up only 2.9 percent year-over-year through June, some submarkets are exceeding previous record-high asking rents from 2008. The demand from creative and tech tenants looking for space in Midtown South over the past few years has pushed asking rents up 19.1 percent above all-time highs. Downtown overall average asking rents have reached historical highs this year as well, and at $57.78 per square foot, rents are 10.3 percent higher than the previous highs in 2008. Most of this increase can be attributed to new construction at the World Trade Center site. Despite this, Midtown overall asking rents are still 5.3 percent off historical highs from 2008. Throughout Midtown, …
Seven years after the worst recession this country has seen since the Great Depression, New York City is riding high again. Manhattan has emerged as a vital center for global retail activity where we continue to see dynamic growth — driven by its economic fundamentals, urban migration, and its cultural and lifestyle attractions. Gone are the days when suburban expansion sounded the death knell for high street retail. Since 2010, in the near-aftermath of the economic collapse and for the first time in decades, urban cores are growing at a faster rate than their suburban counterparts. Eighty percent of Americans now live in urban areas, and retailers and property owners in New York City and around the world are scrambling to adapt. Millennials represent 24 percent of the overall U.S. population and are leading this urban charge. They want to live close to work. They’re driven by technology — and they demand an omni-channel retail experience that integrates smartphone and tablet use with a personalized, service-oriented, in-store approach. And importantly, it’s estimated they will represent nearly 30 percent of U.S. retail spending — the total of which was $4.6 trillion this year — by 2020. Manhattan also continues to benefit …
Job growth in New York City is expected to reach a new high in 2015 with the addition of 92,500 jobs. This spike in employment will bode well for retail owners. Drawn by the strong economy, several retailers are expanding in the city, including Lowe’s, which already has two locations in Brooklyn and one in Queens. In the second half of 2015, Lowe’s will open its first two stores in Manhattan. Apple plans to open shop in Brooklyn; they’ve signed a long-term lease for a 20,000-square-foot store at 247 Bedford Avenue at the corner of North Third Street in Williamsburg. As retailers ramp up their presence in the five boroughs, the vacancy rate is going to reach a new multi-year low. Vacancy for retail properties in 2015 will fall to 3.9 percent on net absorption in excess of 2.8 million square feet. Tightening vacancy will allow for operators to increase asking rents for the fourth consecutive year and will encourage builders to start new projects. Currently, builders are on track to deliver 2.5 million square feet of retail space in 2015, increasing stock by 1.2 percent. The most notable project scheduled for delivery is the Westfield World Trade Center, a …
New York City multifamily has historically been a darling of the real estate industry — and for good reason. It is arguably the most sought-after investment product type within commercial real estate investment’s most targeted city. It is the perfect demographic storm on the demand side: two-thirds of the population rent versus own; the population is arguably the best educated and includes the highest income generators in the nation; and the market continues to exhibit vast growth in household creation and population. Not to mention, the supply side is both geographically and politically constrained. These limitations are further exacerbated by very high costs to build. However, even with the dual push of supply and demand continuing to be in investors’ favor citywide, there are some areas that are softening. Two areas that seem to be softening are luxury condominiums in Manhattan and rental product in Long Island City (Queens) and the downtown Brooklyn area. Manhattan Luxury Condo Sales Slowing Manhattan is often a trendsetter that is months and years ahead of the rest of the country when it comes to real estate trends, and the return of the luxury condominium market is a prime example of this. Some 2,500 units were …
It’s no longer a secret that Brooklyn is booming, particularly the borough’s retail scene. Retail rents have climbed continuously over the last five years. Retail density has increased almost exponentially. A recent study by CPEX of Brooklyn’s notable retail corridors (meaning areas with rents averaging more than $35 per square foot) found the number of these corridors has increased 80 percent in just two years. But what’s driving Brooklyn’s record pace of retail growth? Several market factors have created a perfect storm for Brooklyn’s retail resurgence. Development in the borough has peaked over the past two years, with permits for new residential developments up 116 percent in that timespan. Nearly 20,000 new units are in the pipeline, almost twice the number of permits in Manhattan and 149 percent more than the other outer boroughs combined. The office vacancy rate has dropped to 4.2 percent in Brooklyn, the lowest in the United States. Tourism continues to spike thanks to the borough’s noteworthy parks, the year-round arts and cultural events in the Brooklyn Academy of Music (BAM) Cultural District, and the Barclays Center’s sporting and concert events. In the meantime, hotel developments are trying to keep pace with the influx of tourists …
The New York Capital Region’s industrial market has experienced strong growth over the past 24 months, and promises a continued pattern of growth for the next 12 to 24 months. As the office market in the central business district struggles to right itself fueled by the State’s tenuous occupancy of numerous privately held properties, the industrial marketplace has flourished with extended commitments from existing users and the entrance of new users. Upstate New York is making a name for itself in the nanotech industry, and a great deal of national and international attention has been drawn to the region. In addition to activity driven by high-tech companies, national distribution and manufacturing groups have committed to the region or have focused their site searches in the Capital District. The most significant job creation mechanism in the region has been the nanotech industry. Billions of private and public sector money has been invested since 2010 into Luther Forest Technology Campus in Malta, N.Y., as well as SUNY Polytechnic Institute (also known as the Colleges of Nanoscale Science and Engineering). These facilities have placed our region firmly on the international map and have transformed the appearance of New York’s Capital Region. The strongest …
Since 2010, the Brooklyn real estate market has been surging. Over the course of the last four years, the total dollar amount of commercial real estate sales in Brooklyn has increased 397 percent with transaction volume up 151 percent. In 2010, $1 billion of commercial sales were completed, compared to more than $5 billion in 2013 — and projections for commercial sales in Brooklyn for 2014 are more than $6 billion. Retail property sales in the first half of 2014 compared to the first half of 2013 have increased 33 percent in dollar volume and have seen a 12 percent increase in transaction volume. Brooklyn has become a true retail destination, with more national retailers than ever opening up shop. Barney’s Co-op is credited as being one of the first upscale retailers in the borough four years ago. J. Crew, Sephora, Nord-strom Rack and Whole Foods are several of the other nationally known retailers to make the move to Brooklyn. Apple is looking to open its first Brooklyn store, and the potential location of the store continues to be a widely discussed topic. Brooklyn offers a dense concentration of consumers for retailers to serve. According to an economic development report …
The Manhattan office leasing market witnessed a substantial amount of activity in 2013. Surprising moves were made as tenants relocated out of traditional submarkets into emerging submarkets throughout the city. Many well-known companies, such as Condé Nast and Jones Day, made big commitments to move from traditional office space in Midtown to Downtown. The low vacancy rate in the Midtown South market forced tenants to look for outside options. Companies such as Nielsen, Shazam Media Services, and Alloy Digital have moved out of the Midtown South market over the past 12 to 18 months. This movement is expected to continue in 2014. This year started off well. However, anecdotal evidence suggests that many early 2014 transactions were carried over from the end of 2013. From January through end of February, a total of 301 lease transactions were signed amounting to 4.4 million square feet of leased space, as compared to 600 transactions closed in the first quarter of 2013. The average Class A vacancy rate throughout Manhattan remained between 9 and 10 percent, while Downtown experienced vacancy in the lower double digits mainly due to new construction. Pockets within the Midtown submarket showed diverging dynamics. For example, the Midtown submarket …