NEW YORK, NY – March 1, 2012 – (RealEstateRama) — Strong fundamentals backed up strong investment sales in Northern Manhattan during 2011, according to Ariel Property Advisors’ Northern Manhattan Fundamentals Report, an overview of residential and retail markets that gives investors a better understanding of today’s revenue drivers affecting investment property values uptown.
According to the report, average residential rents and condominium prices in Northern Manhattan in 2011 reached their highest levels since 2008 and 2007, respectively, while retail rents also improved.
Residential Rents
Free market rents in Northern Manhattan averaged approximately $28.73 per square foot in 2011, nearly 10 percent higher than 2010 levels, the report noted.
“After hovering around $26 per square foot for several years, this figure is the highest the uptown market has seen since 2008 and reflects a broader trend of rental increases throughout the city,” said Shimon Shkury, president of Ariel Property Advisors. “Rising rents have been driven by low vacancy rates, potential first-time home buyers opting to rent instead of buy, and the unemployment rate slowly but steadily declining.”
According to the report, however, that the majority of units throughout Northern Manhattan continue to be rent regulated and on average, uptown rent regulated apartments operated at approximately $17.13 in 2011. With market rents currently at nearly $29 per square foot, there is an implied ‘upside’ of approximately 40 percent for regulated buildings throughout Northern Manhattan.
Condominiums
Average condominium prices in Northern Manhattan increased to $631,624 per unit in 2011, the highest level since 2007.
In 2011, Northern Manhattan condominiums sold for approximately $564 per square foot, a 5.5 percent increase from 2010’s $537 per square foot average. Velocity ticked down a bit as there were 375 transactions in 2011 versus 437 in 2010. However, this could be attributed to the fact that there was less new construction online in 2011 and that many of the sales are re-sales.
Although the report noted that 30 condominium projects were stalled in 2011, developers have been buying up more development sites in anticipation of higher demand to come.
Retail Rents
Upper Manhattan retail rents also made progress in 2011 as the broader economy improved and more residents purchased high-end condominiums in the area.
“We’re finding that residents moving to the area are supporting the new retail businesses opening uptown like wine bars, yoga studios, and florists,” Mr. Shkury noted.
On average, the asking price for retail space uptown increased to $67 per square foot during the second half of 2011, up from $62 per square foot during the first half and higher than asking rents from 2008-2010. Most of the retail rent increases were confined to specific corridors like 125th Street, Third Avenue, Frederick Douglass Boulevard and Broadway, while retail rental rates along other corridors ranged from $35 to $50 per square foot.
The Northern Manhattan Fundamentals Report is based on a sample size of residential, retail, and condominium sites in Northern Manhattan neighborhoods, and also highlights major developments in the area.
For more information about Northern Manhattan, please contact Mr. Shkury at 212-544-9500, ext. 11, sshkury (at) arielpa (dot) com. A copy of the report is available at http://arielpa.com/newsroom/report-ArielPA-NM-Fundamentals-2011.
Photo caption:
Shimon Shkury, president of Ariel Property Advisors.
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Northern Manhattan Fundamentals Report (para. )
http://arielpa.com/newsroom/report-ArielPA-NM-Fundamentals-2011
Shimon Shkury (para. 4)
http://arielpa.com/about/team/shimon-shkury/
Ariel Property Advisors ) para. 4)
http://arielpa.com/about/company/
Ariel Property Advisors is a New York City investment property sales firm with an expertise in the multifamily market. The firm also produces a number of research reports including the Multifamily Month in Review: New York City; Northern Manhattan Sales Report; Northern Manhattan Commercial Report; and the Northern Manhattan Residential Rental Report. More information is available at arielpa.com.
Gail M. Donovan
Director of Communications
Ariel Property Advisors
P: (212) 544¬9500 ext. 19
C: (917) 301¬5706
E: gdonovan (at) arielpa (dot) com
