According to the Manhattan 2024 Mid-Year Commercial Real Estate Trends report by Ariel Property Advisors, investment sales in Manhattan saw a significant increase in the first half of 2024. The total amount of transactions reached $5.8 billion over 167 deals, showing a rise of 14% and 16%, respectively, compared to the second half of 2023.
The multifamily sector had the highest number of transactions with a total of 90 sales, but it was retail that had a greater dollar volume due to luxury retailers making acquisitions. This shift in investor sentiment from conservative strategies seen in late-2023 was noted by Howard Raber, director at Ariel Property Advisors.
Raber stated that this change led sellers facing mortgage maturities and distress to make tough decisions about their assets while buyers took advantage of lower prices. In particular for multifamily properties, average pricing dropped by15% from $722 per square foot to $611 while cap rates increased from5.24%to6 .19%. Free market buildings were sold for an average priceof just$679 per square foot -the lowest since2013.
Mike Tortorici,founding partner atArielPropertyAdvisors addedthattheoffice market also showed signs improvementin1H2O24due tonumber owner-user purchases.Additionally,the developmentmarket improvedwithapproximately50 %ofManhattan’s$1.lbilliondevelopment salesreportedlyslatedforofficetoresidentialconversions.This trend is attributedto initiatives put forwardby boththecityandthestateto makethese conversionsmorefeasibleinordertohelpcombatNewYorkCity’shousingshortage.
