M A N H AT T A N N E W D E V E L O P M E N T R E P O R T S E C O N D Q U A R T E R

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1 TM M A N H AT TA N N E W D E V E L O P M E N T R E P O R T 2012 SECOND QUARTER 1 MNS E A S T 2 3 RD S T R E E T, N E W Y O R K, N Y INFO@MNS.COM MNS.COM

2 TABLE OF CONTENTS Introduction 3 Market Snapshot 4 Neighborhood Price Trends Harlem 9 Upper West Side 10 Upper East Side 11 Midtown West 12 Midtown East 13 Murray Hill 14 Chelsea 15 Gramercy Park 16 Greenwich Village 17 East Village 18 SoHo 19 Lower East Side 20 TriBeCa 21 Financial District 22 Battery Park City 23 The Report Explained 24 2

3 INTRODUCTION MNS is proud to present the Second Quarter 2012 edition of our New Development Market Report. New Development Sales data, defined as such Arms-Length first offering transactions where the seller is considered a Sponsor, was compiled from the Automated City Register Information System (ACRIS) for sponsor sales that traded during the Second Quarter of 2012 (04/01/12 06/30/11). All data summarized is on a median basis. 3

4 MARKET SNAPSHOT Year-Over-Year no change Quarter-Over-Quarter down 5% Year-Over-Year Median Sales Price down 26% Quarter-Over-Quarter Median Sales Price up 11% Manhattan New Development Sales Inventory up 76% from last quarter Neighborhood with the Most New Dev Sales: Harlem (16% of Manhattan new development sales) Total New Development Sales Volume up 60% to $602M from $375M in 1Q12 Largest Quarterly Up-Swing: Murray Hill : $1,467/SF from $1,267/SF Sales Price: $1.86M from $1.17M Largest Quarterly Down-Swing: Upper West Side : $1,492/SF from $1,681/SF Sales Price: $2.2M from $3.1M Highest New Development Sale: th Ave PH23 - $19,397,662 Highest New Development Sale : th Ave PH23 - $4,149/SF MARKET SUMMARY: The Manhattan new development market is still struggling to find its footing midway through Both sales volume and sales pricing is volatile with inventory shifts throwing the market up one day and down again the next. Each neighborhood has its own story of multi-million dollar penthouse deals, but at the other extreme, inventory releases with discounts tell another side. What does it all mean? MNS digs deeper into each deal to uncover the trends. The second quarter of 2012 had a great amount of activity in the new development sales scene. Units in contract at the start of the second quarter closed at a pace of about 6 units per day, double the amount of closings from the first quarter. Sales volume was up 60% from the first quarter but off 37% from a year ago. Year-over-year Manhattan new development condominium median sales prices are down 26% ($1.1M this quarter versus just under $1.5M in 2Q11). Median price per square foot of these sales remained the same. Compared to last quarter 1Q12, Manhattan new development price per square foot median numbers are down 5% to $1,165/SF from $1,220/SF but median sales prices are up 11% to $1.1M from $990K last quarter. The drop in median sales price per square foot is a surprise considering the past three quarters were all over $1200/ SF. However, this quarter s median of $1,165/SF hovers just below the average of the past 10 quarters of $1,172/SF. 4

5 MARKET SNAPSHOT MARKET UP-SWINGS: $3+ million dollar sales were sprinkled throughout the city this quarter, from the $3.8M sale at 123 Third Ave in the East Village to the $13.2M sale at 170 East End Ave. A ninth floor 5 bedroom condo at 240 Park Ave South closed at $8.3M, just 5% below ask and the winner of the million dollar listing was the 4,675 SF penthouse at th Ave for just under $19.4M. What better metric of price recovery than original sponsor sales from 2008 closing in today s market at the same prices? Four years and several exclusives later, many developments have held on and are finally releasing units at original prices from the height of the condo market. Midtown East had some straggling sponsor sales at 211 East 51st and The Alexander, but the slow absorption has kept prices elevated at a median price of $1.3M, the highest the neighborhood has seen since 1Q10. 29th Park Madison had 6 recent closings close to a median of $1500/SF, and a recent penthouse listing closed at over $2,000/SF and just 4% off its original listing price back in MARKET DOWN-SWINGS: Manhattan median price per square foot has been on a decline for three quarters in a row, and many of the heavy hitting neighborhoods such as the Upper West Side saw both quarter and annual declines in median sales prices. Lack of inventory is certainly the culprit; for example, The Laureate closed just two units this quarter and is over 90% sold. Rapid absorption is the indicator for discounted pricing in the Financial District this quarter. Although the number of sales almost tripled from last quarter, the results had no effect on median pricing but lowered its median price per square foot by 25%. The Setai is selling at a median price of $920/SF and 99 John at $927/SF with prices ranging from $500K - $2.5M. INVENTORY ANALYSIS: Manhattan median sales prices are up 11% to $1.1M from $990K last quarter and the change in median sales price occurred in the shift of unit types sold. This quarter, two-bedrooms had the largest number of closings (33%) at a median sales price of $1,175,000 while last quarter we saw that same 31% made up of one-bedrooms dominating the sales records and at a median sales price of $834, % of the sales inventory this quarter came from new developments located in either Harlem or FiDi, yielding a median price per square foot decline of 5% from last quarter. A similar inventory structure occurred back in 2Q11 which is why there is no change in median price per square foot year-over year. Little inventory in SoHo, the Upper West Side, or even Gramercy Park certainly explains the year-over-year 26% drop in new development median sale prices. In tracking the neighborhoods that sold the most amount of 2Q12 new development inventory per unit size: - Financial District (28%) One Bedrooms - Financial District (16%) Two Bedrooms - Harlem (25%) Three Bedrooms (1500 +) - Upper East Side (27%) 5

6 MARKET SNAPSHOT 2Q12 MEDIAN BY NEIGHBORHOOD $2,050 $1,850 $1,650 $1,450 $1,250 $1,050 $850 $650 $450 $250 Harlem Upper West Side Upper East Side Midtown West Midtown East Murray Hill Chelsea Gramercy Park Greenwich Village East Village SoHo Lower East Side TriBeCa FiDi BPC 2Q12 MEDIAN SALES BY NEIGHBORHOOD $4,700,000 $3,200,000 $1,700,000 $200,000 Harlem Upper West Side Upper East Side Midtown West Midtown East Murray Hill Chelsea Gramercy Park Greenwich Village East Village SoHo Lower East Side TriBeCa FiDi BPC 6

7 MARKET SNAPSHOT % OF TOTAL NEW DEVELOPMENT SALES BOROUGH-WIDE 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Harlem Upper West Side Upper East Side Midtown West Midtown East Murray Hill Chelsea Gramercy Park Greenwich Village East Village SoHo Lower East Side TriBeCa FiDi BPC 2Q2012 AVERAGE MONTHLY ABSORPTION RATE Harlem Upper West Side Upper East Side Midtown West Midtown East Murray Hill Chelsea Gramercy Park Greenwich Village East Village SoHo Lower East Side TriBeCa FiDi BPC 7

8 MARKET SNAPSHOT 2Q12 UNIT MIX OF NEW DEVELOPMENT SALES 3Q11 UNIT MIX OF NEW DEVELOPMENT SALES 2Q12 Unit Mix of New Developmen 27% 19% 20% 34% 3 Beds MANHATTAN MANHATTAN QUARTERLY QUARTERLY TRACKING TRACKING $1,300 $2,400,000 $1,900,000,000,000 $400,000 8

9 NEIGHBORHOOD TRENDS HARLEM HARLEM BY UNIT SIZE ($628/SF Median) $700 $600 $500 $400 $300 % OF SALES WITHIN HARLEM 5% 52% 27% 16% HARLEM QUARTERLY TRACKING $700 $600 $500 $400 $300 $700,000 $650,000 $600,000 $550,000 $500,000 $450,000 $400,000 9

10 NEIGHBORHOOD TRENDS UPPER WEST SIDE UPPER WEST SIDE BY UNIT SIZE ($1,492/SF Median) $1,500 $1,300 % OF SALES WITHIN UPPER WEST SIDE 54% 13% 33% UPPER WEST SIDE QUARTERLY TRACKING $1,800 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000,000 $500,000 10

11 NEIGHBORHOOD TRENDS UPPER EAST SIDE UPPER EAST SIDE BY UNIT SIZE ($1,197/SF Median) $1,700 $1,500 $1,300 $700 $500 % OF SALES WITHIN UPPER EAST SIDE 48% 16% 24% 12% UPPER EAST SIDE QUARTERLY TRACKING $1,500 $1,300 $3,000,000 $2,500,000 $2,000,000 $1,500,000,000 $500,000 11

12 NEIGHBORHOOD TRENDS MIDTOWN WEST MIDTOWN WEST BY UNIT SIZE ($1,323/SF Median) $2,200 $2,000 $1,800 % OF SALES WITHIN MIDTOWN WEST 5% 52% 15% 28% MIDTOWN WEST QUARTERLY TRACKING $1,700 $1,500 $1,300 $700 $2,300,000 $2,050,000 $1,800,000 $1,550,000 $1,300,000 $1,050,000,000 12

13 NEIGHBORHOOD TRENDS MIDTOWN EAST MIDTOWN EAST BY UNIT SIZE ($1,171/SF Median) $600 $400 0% % OF SALES WITHIN MIDTOWN EAST 62% 13% 25% MIDTOWN EAST QUARTERLY TRACKING $1,300 $2,000,000 $1,750,000 $1,500,000 $1,250,000,000 $750,000 $500,000 13

14 NEIGHBORHOOD TRENDS MURRAY HILL MURRAY HILL BY UNIT SIZE ($1,467/SF Median) $2,000 $1,800 % OF SALES WITHIN MURRAY HILL 17% 49% 17% 17% MURRAY HILL QUARTERLY TRACKING $1,700 $1,500 $1,300 $700 $1,900,000,000,000 $400,000 14

15 NEIGHBORHOOD TRENDS CHELSEA CHELSEA BY UNIT SIZE ($1,236/SF Median) $1,800 $600 % OF SALES WITHIN CHELSEA 31% 38% 12% 19% CHELSEA QUARTERLY TRACKING $1,500 $1,300 $2,700,000 $2,200,000 $1,700,000,000 $700,000 15

16 NEIGHBORHOOD TRENDS GRAMERCY PARK GRAMERCY PARK BY UNIT SIZE ($1,238/SF Median) $600 % OF SALES WITHIN GRAMERCY PARK 25% 19% 25% 31% GRAMERCY PARK QUARTERLY TRACKING $1,700 $1,500 $1,300 $2,250,000 $2,000,000 $1,750,000 $1,500,000 $1,250,000,000 $750,000 $500,000 16

17 NEIGHBORHOOD TRENDS GREENWICH VILLAGE GREENWICH VILLAGE BY UNIT SIZE ($1,781/SF Median) $2,200 $1,700 $700 $200 % OF SALES WITHIN GREENWICH VILLAGE 67% 33% 0% GREENWICH VILLAGE QUARTERLY TRACKING $3,500 $3,000 $2,500 $2,000 $1,500 $7,250,000 $6,250,000 $5,250,000 $4,250,000 $3,250,000 $2,250,000 $1,250,000 17

18 NEIGHBORHOOD TRENDS EAST VILLAGE EAST VILLAGE BY UNIT SIZE ($1,886/SF Median) $2,000 $1,800 $600 % OF SALES WITHIN EAST VILLAGE 0% 100% EAST VILLAGE QUARTERLY TRACKING $3,400,000 $2,400,000,000 $600 $400,000 18

19 NEIGHBORHOOD TRENDS SOHO SOHO BY UNIT SIZE ($1,605/SF Median) $1,700 $1,500 $1,300 $700 $500 $300 $100 % OF SALES WITHIN SOHO 0% 100% SOHO QUARTERLY TRACKING $3,500 $3,000 $2,500 $2,000 $1,500 $11,000,000 $9,000,000 $7,000,000 $5,000,000 $3,000,000,000 19

20 NEIGHBORHOOD TRENDS LOWER EAST SIDE LOWER EAST SIDE BY UNIT SIZE ($1,300/SF Median) $1,500 $1,300 $700 $500 0% % OF SALES WITHIN LOWER EAST SIDE 33% 33% 34% LOWER EAST SIDE QUARTERLY TRACKING $1,750,000 $1,500,000 $1,250,000,000 $750,000 $500,000 20

21 NEIGHBORHOOD TRENDS TRIBECA TRIBECA BY UNIT SIZE ($1,384/SF Median) $600 $400 % OF SALES WITHIN TRIBECA 0% 10% 5% 85% TRIBECA QUARTERLY TRACKING $2,000 $1,800 $6,500,000 $5,500,000 $4,500,000 $3,500,000 $2,500,000 $1,500,000 $500,000 21

22 NEIGHBORHOOD TRENDS FINANCIAL DISTRICT FINANCIAL DISTRICT BY UNIT SIZE ($954/SF Median) $1,800 $600 $400 7% % OF SALES WITHIN FINANCIAL DISTRICT 27% 25% 41% FINANCIAL DISTRICT QUARTERLY TRACKING $600 $1,500,000 $1,300,000,000,000 $700,000 $500,000 22

23 NEIGHBORHOOD TRENDS BATTERY PARK CITY BATTERY PARK CITY BY UNIT SIZE ($910/SF Median) $700 $600 % OF SALES WITHIN BATTERY PARK CITY 27% 27% 18% 28% BATTERY PARK CITY QUARTERLY TRACKING $1,300 $700 $2,400,000 $1,900,000,000,000 $400,000 23

24 m a n h a t t a n n e w d e v e l o p m e n t R EPO R T 2 q 1 2 THE REPORT EXPLAINED Included in this research are walk-up and elevator new development condominium buildings, as well as new conversion condominiums if the sales were applicable sponsor transactions. Excluded from the report are all cooperative sales. Unit types such as studios, one-bedrooms, and two-bedroom units are grouped by square footage ranges. are under 700 square feet, one-bedrooms are under 900 square feet, and twobedrooms are under 1,450 square feet. Added to the report is the over-sized unit type that ranges from 1,500 square feet to 7,000 square feet. Presented with a quarter-over-quarter and year-over-year comparison, both city-wide and by neighborhood, MNS New Development ReportTM tracks the market trends throughout Manhattan and Brooklyn. MNS offers a unique insight into the new development market by tracking stalled construction sites on a quarterly basis, a great indicator of where development in general is moving. MNS is your source to find neighborhood price per square foot analysis, average sale prices, unit type sales trends, overall price movement, neighborhood inventory comparisons, and absorption rates. Can t find what you re looking for? Ask MNS for more information at C ONTAC T US N OW: Note: All market data is collected and compiled by MNS marketing department. The information presented here is intended for instructive purposes only and has been gathered from sources deemed reliable, though it may be subject to errors, omissions, changes or withdrawal without notice. If you would like to republish this report on the web, please be sure to source it as the Manhattan New Development Report with a link back to its original location ( 24 MNS E A S T 2 3 RD S T R E E T, N E W Y O R K, N Y INFO@MNS.COM MNS.COM