Real estate sales in Manhattan south of 96th Street decline 36 percent in the first half of 2008 compared to the comparable period in 2007, according to the Massey Knakal New York City Income Property Market Report.
The decline reflected "the impact of the widely talked about 'credit crunch,'" According to the report, which was prepared by Miller Cicero, a commercial real estate appraisal and advisory firm.
"The turnover rate citywide during this period was 1.1%," the report maintained, "down from 1.4% during the second half of 2007."
"We are encouraged that the market for medium sized investment properties has not been as adversely affected as the larger institutional quality property sector," Robert Knakal, chairman of Massey Knakal declared, adding that "Demand continues to be healthy and sellers are starting to adjust their expectations to meet current market conditions. We believe the short supply of product that we have experienced will loosen as sellers begin to understand the realities of the market."
"Given rapidly rising expenses in multifamily properties, investors are starting to rely more heavily on cap rate analysis," he continued, and "the value of in-place income has increased recently and has made financing more feasible."
The consolidated median price per square foot across markets declined to $222 per square foot, down 5% from the prior six month period, the report noted. Accordingly, the median cap rate across all sectors inched up slightly to 5.8% from 5.5% from the prior period, and the gross rent multiple slipped from 12.4 to 11.5.
Specifically in Manhattan, cap rates stayed the same across all sectors as compared to the second half of 2007 at 4.8% for walk-up and mixed-use buildings and 3.8% for elevatored apartment buildings.
According to the report, Northern Manhattan saw the steepest drop in the number of sales - 63 percent - and values began to slide, while the number of sales in the Bronx declined 42 percent. "Even with a 22% drop in sales, Brooklyn remained the most active sales market while its values stabilized," the report found, adding that "Queens saw the lowest sales decline and most stable values."
The number of sales in the report were based on all closed sales in the public record over $500,000 as reported by propertyshark.com.
The decline reflected "the impact of the widely talked about 'credit crunch,'" According to the report, which was prepared by Miller Cicero, a commercial real estate appraisal and advisory firm.
"The turnover rate citywide during this period was 1.1%," the report maintained, "down from 1.4% during the second half of 2007."
"We are encouraged that the market for medium sized investment properties has not been as adversely affected as the larger institutional quality property sector," Robert Knakal, chairman of Massey Knakal declared, adding that "Demand continues to be healthy and sellers are starting to adjust their expectations to meet current market conditions. We believe the short supply of product that we have experienced will loosen as sellers begin to understand the realities of the market."
"Given rapidly rising expenses in multifamily properties, investors are starting to rely more heavily on cap rate analysis," he continued, and "the value of in-place income has increased recently and has made financing more feasible."
The consolidated median price per square foot across markets declined to $222 per square foot, down 5% from the prior six month period, the report noted. Accordingly, the median cap rate across all sectors inched up slightly to 5.8% from 5.5% from the prior period, and the gross rent multiple slipped from 12.4 to 11.5.
Specifically in Manhattan, cap rates stayed the same across all sectors as compared to the second half of 2007 at 4.8% for walk-up and mixed-use buildings and 3.8% for elevatored apartment buildings.
According to the report, Northern Manhattan saw the steepest drop in the number of sales - 63 percent - and values began to slide, while the number of sales in the Bronx declined 42 percent. "Even with a 22% drop in sales, Brooklyn remained the most active sales market while its values stabilized," the report found, adding that "Queens saw the lowest sales decline and most stable values."
The number of sales in the report were based on all closed sales in the public record over $500,000 as reported by propertyshark.com.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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