James Kinsey Principal, Senior Director of Tri-State Investment Sales

Transcription

1 3Q18 Property Sales Report For more information please contact: James Nelson Principal, Head of Tri-State Investment Sales James Kinsey Principal, Senior Director of Tri-State Investment Sales Erik Edeen Director of Operations Ethan Bidna Analyst Manhattan Investment Sales AVISON YOUNG NEW YORK 1166 Avenue of the Americas, 15th Floor New York, NY avisonyoung.com 218 Avison Young New York, LLC. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

2 3Q18 Investment Sales Investment Sales Summary TOTAL DOLLAR VOLUME BY ASSET CLASS 16% 6%.3% $8.3B NUMBER OF SALES BY ASSET CLASS 16% 12% 6% 17% 81 Sales Elevator Apartments Walk-Up Ap artments Mix ed-use Office Buildings Office Condos Retail 6% 21% Develop ment 12% 9% Conversion/User 1% 2% 45% 15% 15% Manhattan saw a blockbuster third quarter with $8.3 billion in total investment sales, which is almost double the first two quarters combined. Major transactions powered growth in the third quarter including the $1.286 billion sale of the office portion of 666 Fifth Avenue, the $1.155 billion sale of the ABC studio campus on the Upper West Side, the $9 million sale of th Avenue, currently under contract, and the $65 million sale of a development assemblage consisting of five commercial buildings in Hudson Square. Additionally, the predicted number of sales remain on track to hit about 385 sales this year. While this number is lower than the previous 1 years, it is still a dramatic uptick from the recent past. In all, 218 annualized sales are expected to reach nearly $23 billion, right around the 1-year average, suggesting the market is normalizing. Multi-Family Pricing and Activity Continue Divergence Multi-family dollar volume remained low with 31 sales for a combined $1.28 billion, but pricing remained strong at a $94 per square foot or a 3.67 percent cap. The number of sales increased sharply this quarter over last, rising from 26 percent of quarterly transactions to 38 percent of the total. This disconnect between low sales numbers and high pricing is a continuation of the trend prominent from the second quarter. Retail Less of More Retail demand remained high with this year expected to double the amount of sales from last year at an average of $2,415 per square foot or a 4.33 percent cap. 218 has seen an overall rise in asset pricing, while the number of transactions has decreased this year down to 12 percent of total sales this quarter, relative to 2 percent in the previous quarter; likewise, the annualized expected sales of 68 is half of the 1-year high of 12 sales in 212. This confluence of factors suggests that as the retail market continues its correction, sales will be dominated by fewer and higher priced assets. Office and Office Condo Large Sales Boost the Asset Class Office and office condos led this quarter with 46 percent of the Manhattan dollar volume. The dominance of this asset class is in line with the 1-year average of office product comprising 54 percent of Manhattan dollar volume. Office building pricing held strong at $975 per rentable square foot or a 4.75 percent cap on average. Alternatively, office condo units traded for an average of $91 per rentable square foot. Office properties were powered by nine properties or portfolios of sales over $1 million, including the sale of the office portion of 666 Fifth Avenue and the pending sale of th Avenue. Development Developer Confidence Grows, Location Is King Development sites continued to show signs of life with the 13 sites traded amounting to almost two million buildable square feet at an average of $74 per buildable square foot. This number obscures the fact that development site pricing is heavily dependent on locations with pricing ranging from the $4 to over $1,5 per buildable square foot. The trades included a number of portfolios, most notably Disney s purchase of a five-parcel site for $65 million that will be redeveloped into a new headquarters at 4 Hudson Square. Conclusion As we look toward the end of 218, the strength of the investment sales market suggests optimism across asset classes. Some investors, such as multi-family and retail owners, are waiting to see what the future holds, while developers and office owners are confidently forging ahead. Real estate investors, while aware of the long-time horizons of their investments, continue to demonstrate their confidence in the market in the assets they buy and sell. 2

3 ALL TRANSACTIONS IN MANHATTAN Year Number of Sales 29 $3,69,, $11,26,, $19,99,, $27,75,, $27,3,, $38,84,, $55,5,, $36,44,, $17,75,, (Annualized) $23,269,72, Year Average $26,151,97, Type Conversion/User Development Multifamily Office Building Office Condo Retail Methodology Avison Young s Tri-State Investment Sales group tracks confirmed transactions above $5 million ($1 for retail properties and office condominiums) sold in Manhattan south of 96th Street. Transaction Volume and Number of Sales by Year $6 $5 $4 $3 $2 $1 $ (Annualized) Detailed sale information is available on page 1 3

4 3Q18 Investment Sales Multi-Family/Mixed-Use $1.3B % $97 Total Dollar Volume Number of Sales Average Cap Rate Average Price PSF Transaction Volume & Number of Sales by Year $14 Multifamily 6 $12 5 Dollar Volume $1 $8 $6 $ $2 1 $ (Annualized) Largest Transactions 11 West End Avenue $416,, 34 Desbrosses Street $25,, 52 West 43rd Street $193,, 62 Avenue B $85,, Amsterdam Avenue $33,, 4

5 Retail $527M % $2,415 Total Dollar Volume Number of Sales Average Cap Rate Average Price PSF Transaction Volume & Number of Sales by Year $4 Retail 14 $4 12 Dollar Volume $3 $3 $2 $2 $ $1 2 $ Largest Transactions (Annualized) 1535 Broadway $442,, 77 Madison Avenue $31,, 9-94 Franklin Street $15,55, 18 Chambers Street $1,, West 14th Street $5,8, 5

6 3Q18 Investment Sales Office $3.8B % $975 Total Dollar Volume Number of Sales Average Cap Rate Average Price PSF Transaction Volume & Number of Sales by Year $25 14 Dollar Volume $2 $15 $1 $ $ Largest Transactions (Annualized) 666 Fifth Avenue $1,286,83, th Avenue $9,, & 235 East 42nd Street $36,, 54 West 26th Street $257,, 183 Madison Avenue $222,5, 6

7 Office Condo $24M 5 $91 Total Dollar Volume Number of Sales Condo Average Price PSF Transaction Volume & Number of Sales by Year Dollar Volume $2.5 $2. $1.5 $1. $ $ Largest Transactions (Annualized) 45 West 31st Street $9,5, 633 Third Avenue $6,987, West 24th Street $4,1, Elizabeth Street $2,138, 17 East Broadway $1,77, 7

8 3Q18 Investment Sales Development $1.3B M $74 Total Dollar Volume Number of Sales Total BSF Average Price BSF Transaction Volume & Number of Sales by Year $12 25 $1 2 Dollar Volume $8 $6 $ $2 5 $ Largest Transactions (Annualized) Disney HQ Portfolio $65,, Northwell/TUFF Portfolio $232,197, West 35th Street $96,, 41 West 57th Street $8,, Avenue of the Americas $52,8, 8

9 Conversion/User $1.4B 5 1.6M $966 Total Dollar Volume Number of Sales Total SF Average Price BSF Transaction Volume & Number of Sales by Year $5 7 Dollar Volume $4 $4 $3 $3 $2 $2 $1 $ $ (Annualized) Largest Transactions ABC/Silverstein Portfolio: 6 Pine Street $1,155,, ABC/Silverstein Portfolio: 147 Columbus Avenue $1,155,, 378 West End Avenue $158,, Leonard Street $24,5, 9

10 3Q18 Investment Sales Sale Details ELEVATOR APARTMENT PROPERTIES Address Price # Units SF $/Units $/SF Cap Rate 11 West End Avenue $416,, ,24 $822,134 $ % 34 Desbrosses Street $25,, ,542 $859,17 $818 Condo Conversion 52 West 43rd Street $193,, ,967 $513,298 $566 4.% 62 Avenue B $85,, 81 8, $1,49,383 $1,63 Not Reported 222 East 56th Street $25,, 6 37,687 $416,667 $ % East 62nd Street $11,, 15 11,9 $733,333 $ % 313 East 61st Street $7,575, 21 8,55 $36,714 $ % WALK-UP APARTMENT PROPERTIES Address Price # Units SF $/Units $/SF Cap Rate Bedford Street $16,, 19 12,349 $842,15 $1,296 2.% 445 West 21st Street $9,35, 1 9,375 $935, $997 High Vacancy 345 East 33th Street $7,2, 18 1,625 $4, $ % 6 West 89th Street $7,1, 9 6,63 $788,889 $1,71 Delivered Vacant 435 West 48th Street $6,625, 4 6,56 $1,656,25 $1,1 4.18% East 3th Street $6,5, 1 6,517 $65, $997 3.% 345 East 92nd Street $6,75, 2 8,54 $33,75 $ % 123 East 39th Street $6,, 8 5,26 $75, $1,141 High Vacancy 319 East 93rd Street $6,, 1 8,648 $6, $694 Not Reported 49 West 94th Street $5,9, 6 6,6 $983,333 $974 Delivered Vacant West 75th Street $5,31,6 17 8,496 $312,356 $625 Not Reported 2 East Seventh Street $5,, 18 1,83 $277,778 $462 Not Reported MIXED-USE PROPERTIES Address Price # Units SF $/Units $/SF Cap Rate East 14th Street $28,25, 51 31,875 $553,922 $886 Not Reported th Avenue/55 West 22nd Street $27,6, 3 22,945 $92, $1,23 3.5% 116 Mott Street $22,5, 4 21,196 $562,5 $1,62 4.4% Hester Street $18,25, 37 25,961 $493,243 $ % West 8th Street $16,64, 16 17,75 $1,4, $ % 228 Thompson Street $14,3, 9 7,128 $1,588,889 $2,6 4.3% Avenue B $1,35, 16 1,588 $646,875 $ % Amsterdam Avenue $33,, 73 44,419 $452,55 $ % 68 East 79th Street $8,9, 9 6,482 $988,889 $1,373 4.% 32 East 12th Street $7,75, 9 6,932 $861,111 $1, % 87 East 4th Street $7,1,5 9 4,729 $788,944 $1, % 932 Eighth Avenue $7,1, 5 5,21 $1,42, $1,363 Assembledge RETAIL PROPERTIES Address Tenants Price Type Cap Rate SF $/SF 1535 Broadway Retail/theatre/signange $442,, Condo 3.8% 14, $4,25 77 Madison Avenue Vacant $31,, Full Building Vacant 6,839 $4, Franklin Street Tracy Anderson, Sweaty Better, Quick Cryo $15,55, Condo 4.5% 7,75 $2,6 18 Chambers Street Starbucks, Vitamin Shop $1,, Condo 4.51% 1,478 $6, West 14th Street Vacant $5,8, Condo Vacant 6,34 $ Rivington Street Ground Floor Vacant $5,3, Full Building Not Reported 3,887 $1, Duane Street Vacant $5,15, Condo Vacant 8, $ Allen Street Zipper Stop $5,75, Full Building Not Reported 3,81 $1, East 1st Street Boilermaker, Lazy Llama, and a juice bar $4,525, Condo 4.5% 2,91 $1, West 26th Street Vacant $2,75, Co-op Vacant 3,5 $786 1

11 OFFICE PROPERTIES Address Price Class Cap Rate RSF $/RSF 666 Fifth Avenue $1,286,83, A Not Reported 1,45, $ th Avenue * $9,, C Partially Vacant 1,129,2 $ and 235 East 42nd Steet $36,, A Sale Leaseback 1,1, $ West 26th Street $257,, A 5.1% 166,81 $1, Madison Avenue $222,5, B Not Reported 274,413 $ West 15th Street $158,5, B Not Reported 98,87 $1, Madison Avenue $151,, A Not Reported 176,53 $ Fifth Avenue $135,, A Not Reported 19,19 $1, West 4th Street $15,, B User Occupied 159,774 $ Broadway $46,75, C Vacant 36,694 $1, Bowery $24,25, A 4.2% 21,38 $1, Bowery $24,25, B 4.2% 26,4 $ East 33rd Street $46,284,126 C 5.5% 7, $ West 56th Street $14,, C Owner Occupied 11,421 $1,226 9 East 89th Street $1,95, B Renovation 1,295 $1, Madison Avenue $1,, C Not Reported 13,2 $ Park Place $9,, C Delivered Vacant 11, $818 OFFICE CONDO PROPERTIES Address Price Class Unit RSF $/RSF 45 West 31st Street $9,5, B 12th Floor/Penthouse 11,75 $ Third Avenue $6,987,55 A 137/138/13th Floor 7,721 $ West 24th Street $4,1, C 8th Floor 4,5 $ Elizabeth Street $2,138, A 2nd Floor - Unit 2C 2,4 $ East Broadway $1,77, B 3rd Floor 1,711 $1,34 DEVELOPMENT SITES Address Price Zoning Assembledge BSF $/BSF Planned Use Disney HQ Portfolio $65,, M1-6, HSQ Yes 86,25 $756 Office Northwell/TUFF Portfolio $232,197,37 C1-9 Yes 185,92 $1,249 Medical Complex 517 West 35th Street $96,, C6-4, M1-5, HY Yes 234, $41 Condo / Office 41 West 57th Street $8,, C5-3, MID Yes 51,21 $1,562 Condo Avenue of the Americas $52,8, C6-3A, C6-2A Yes 63,454 $832 Condo / Retail Broadway $5,, C4-6A, EC-3 No 75, $667 Condo / Retail York Avenue $46,5, R1A, C1-5 Yes 75,95 $619 Assisted Living Seventh Avenue $36,, M1-6 Yes 72,7 $495 TBD East 71st Street / 252 East 72nd Street $3,2, R1A, C1-5, TA Yes 79,26 $381 TBD 2-22 West 3 Street $29,8, M1-6 Yes 51,35 $58 Office rd Avenue $23,, C6-2A Yes 34,838 $66 TBD 19 Mulberry Street $12,8, C6-2G, LI No 22,896 $559 TBD 32 Rutgers Street $2,9, R7-2 No 7,276 $399 TBD CONVERSION/USER Address Price Existing SF $/Existing SF Planned Use ABC/Silverstein Portfolio $1,155,, 1,4,336 $825 TBD 378 West End Avenue/26 West 78th Street $158,, 134,669 $1,173 Condo 6 Pine Street $28,28, 49,197 $ Leonard Street/198 West Broadway $24,5, $834 Condo *Under contract Washington Street $18,5, 12,996 $1,424 TBD 11

12 For more information please contact: James Nelson Principal, Head of Tri-State Investment Sales Erik Edeen Director of Operations James Kinsey Principal, Senior Director of Tri-State Investment Sales Ethan Bidna Analyst AVISON YOUNG NEW YORK 1166 Avenue of the Americas, 15th Floor New York, NY avisonyoung.com 218 Avison Young New York, LLC. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.