- NYC’s multifamily market has seen a sizeable rebound, with a notable uptick in recent months.
- Transaction volume for multifamily properties reached $2.6B in Q2, three times that of Q1.
- Recent developments, including Albany’s housing deal and Mayor Eric Adams’ City of Yes plan, are boosting investor confidence.
According to Bisnow, NYC’s multifamily sales market is showing strong signs of recovery thanks to recent legislative developments.
Transaction Trends
According to data from Ariel Property Advisors, the Big Apple’s multifamily market dropped dramatically in late 2023 and early 2024, but has since bounced back. Despite persistently high interest rates, deal activity surged in Q2, with around $2.6B in sales, or three times more than in Q1.
For context, a year ago in 2Q23, NYC multifamily sales hit a local high of $3.1B before plummeting to $646M in Q4. Deal activity then recovered slightly, to $858M, in 1Q24.
Significant deals in June, like Breaking Ground’s $172M Upper East Side purchase and two acquisitions by Fetner Properties, propelled the city’s multifamily recovery.
Rebuilding Confidence
The rebound is attributed to recent legislative and political developments. This April, the passage of a new housing deal in Albany, alongside progress on Mayor Eric Adams’ City of Yes plan, created a more favorable environment for CRE investments.
Daniel Ridloff, managing director at Scale Lending, noted that many shelved projects are now being revived, presenting numerous financing opportunities across NYC submarkets.
Helen Hwang of Meridian Capital Group also noted that the state’s recent budget deal boosted lender confidence, particularly regarding Good Cause Eviction. This clarity has helped investors better understand and underwrite deals, contributing to higher deal activity.
Finally, the extension of the 421-a tax break until 2031 for certain projects and the introduction of the 485-x program are also driving interest in development. Although the new 485-x abatement faces skepticism due to its labor requirements, it’s still generating interest in rental site developments.
What’s Next
The city’s multifamily market’s recovery is expected to continue as developers and investors adapt to new legislative frameworks and capitalize on emerging opportunities.
As political uncertainties are ironed out and new incentives take root, the market is poised for a sustained period of growth and innovation.
Developers are also likely to continue exploring creative financing and construction strategies, ensuring that NYC remains a dynamic and attractive hub for multifamily investments.
