New York, NY – In the first quarter of 2021, the Manhattan investment sales market recorded 34 transactions totaling just over $1 billion in dollar volume, according to Avison Young’s Manhattan Property Sales Report for the First Quarter 2021.

The first quarter figures represent a 7 percent increase in sales and 25 percent decrease in dollar volume from the average quarterly volume of 32 transactions and $1.35 billion in the second through fourth quarters of 2020 following the declaration of the COVID-19 pandemic. If annualized based on the first quarter alone, Manhattan investment sales will total $4 billion across 136 total transactions in 2021, a decrease of 53 percent and 15 percent, respectively, from 2020.

“A majority of the first quarter sales were negotiated in late 2020 before the vaccine rollout, which contributed to investor uncertainty,” said James Nelson, Principal and Head of Tri-State Investment Sales. “Recently, the United States surpassed an average of 3 million daily doses administered and New York City surpassed a 20 percent full vaccination rate, both of which will increase the pace of returning to a more normal investment environment. The vaccine rollout and positive market sentiment should boost 2021’s activity levels above those in 2020.”

The following is a break down of the the market in the first quarter by asset class:

Multi-Family/Mixed-Use

The Manhattan multi-family and mixed-use market recorded 13 transactions for just over $667 million in total dollar volume, a 9 percent decrease and 155 percent increase off the 2Q20 through 4Q20 quarterly average, respectively. The average price per square foot decreased by 14 percent to $717, and the average cap rate rose by 43 basis points to 5.28 percent, in comparison to 2020 pricing. The large spike in dollar volume was due to two large transactions, 15 Park Row and 265 Cherry Street, which accounted for 86 percent of total dollar volume. 265 Cherry Street was the leading transaction for the quarter, as The Related Companies purchased the 490-unit, Section 8 building for $435 million, equating to $661 per square foot.

Development

The Manhattan development market recorded 5 transactions for $86.8 million in total dollar volume, a 17 percent and 39 percent decrease off the 2Q20 through 4Q20 quarterly average, respectively. The price per buildable square foot declined by 8 percent to $362, in comparison to 2020 pricing. The leading transaction for the quarter was EJS’s Group purchase of 1303-1309 Third Avenue for $32.35 million, equating to $396 per buildable square foot.

Office

The Manhattan office market recorded 4 transactions for $88.9 million in total dollar volume, which was flat and an 87 percent decrease off the 2Q20 through 4Q20 quarterly average, respectively. The price per square foot rose by 8 percent to $1,112, in comparison to the 2020 pricing. The leading transaction for the quarter was The Kaufman Organization’s ground lease purchase of 135 West 29th Street for $34.6 million, in which the firm entered into a 99-year agreement with MFM Properties with plans to renovate the building.

Retail

The Manhattan retail market recorded 8 transactions for just over $122 million in total dollar volume, a 140 percent increase and 15 percent increase off the 2Q20 through 4Q20 quarterly average, respectively. Out of the 8 transactions, 7 were either vacant or purchased by an end-user. The average price per square foot rose by 30 percent to $1,996 in comparison to 2020 pricing.

To read a copy of the full report, please click here.