Queens has been at the forefront of New York City’s development boom, with major new megaprojects rising from Astoria to Flushing. And with Amazon’s official selection of Long Island City for half of its so-called HQ2, the appetite for large scale developments in Queens is likely to accelerate even further.
But one segment of the local market that has remained consistently slow is deals for multifamily buildings, where activity almost always lags behind the other boroughs. During the third quarter of the year, Queens saw just 11 deals across 14 buildings for $93.33 million, according to data from Ariel Property Advisors.
During the second quarter, the borough saw 18 deals across 25 buildings for about $283 million, and just 13 deals across 18 buildings for about $178 million during the first quarter. Throughout 2017, Queens saw 43 deals across 115 buildings worth $849 million, making it the only borough not to break the $1 billion mark in annual sales. These were the lowest number by borough in every instance and every category, with the sole exception of dollar volume during 2018’s second quarter (the Ariel reports examine every part of the city except Staten Island).
Michael Tortorici, executive vice president at Ariel, said Queens has had a slow multifamily market for as long as he has been analyzing the borough. He generally sees somewhere around 60 trades per year.
“The demand is there. The supply often isn’t,” he said, “and I think that fact is seen in the pricing, which is consistent and has been, compared to other parts of the city, also very competitive.”
Part of the reason for Queens’ slow multifamily market could be the relatively small amount of multifamily buildings it has compared to the other boroughs. Ariel identified just 3,371 tax lots in the borough that have one or more multifamily or mixed-use building on them with 10 or more units. This number was 6,057 in the Bronx, 7,361 in Brooklyn and 12,726 in Manhattan.
There is also more of a general reluctance among multifamily owners in Queens to sell their properties, given that they tend to be very secure investments, Tortorici said.
“Queens multifamily owners are very loyal to Queens and to their holdings, and many of them are very stable in value with appreciation,” he said. “They’re stable in terms of collections. The income growth is steady and consistent.”
Because of the stability, owners are more likely to commit to longterm holds and pass it on generationally, he said.
What a shame that the multifamily buildings aren't being traded back and forth! In the meantime, one- and two-family homes are torn down and replaced with crap on a regular basis.
