Q1 2023 Multifamily Real Estate Report: New York, NY
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New York City, known for its vibrant diversity, world-class entertainment, and for being a global center for finance, culture, and the arts, houses the headquarters of major organizations such as JPMorgan Chase, Goldman Sachs, IBM, Verizon Communications, and American Express.
The population of New York City is currently around 18.9 million with a 0.37% growth rate.
New York City multifamily real estate got off to a slow start in Q1 2023 compared to Q1 of 2022 but is slated to produce stable performance as the year progresses.
General Area Overview & Demographics
New York City is a vibrant and iconic metropolis located on the eastern coast of the United States. With its rich history, diverse culture, and towering skyscrapers, the city stands as a global hub of finance, commerce, art, and entertainment. Spanning five boroughs—Manhattan, Brooklyn, Queens, The Bronx, and Staten Island—New York City is the most populous city in the United States.
Culture, Demographics, and Education of New York City
As the financial capital of the world, New York City hosts the headquarters of numerous multinational corporations, stock exchanges, and major financial institutions. The city's iconic skyline is dominated by architectural marvels like the Empire State Building, One World Trade Center, and the Chrysler Building, which symbolizes the city's economic prowess and modernity.
New York City is renowned for its cultural diversity, with residents hailing from all corners of the globe. This diversity is reflected in the city's cuisine, with a vast array of international restaurants offering flavors from around the world. From the vibrant neighborhoods of Chinatown and Little Italy to the bustling streets of Times Square and the trendy art scene of Chelsea, NYC is a melting pot of cultures and experiences, yet the city boasts some of the worst public housing in the country.
Home to some of the world's most prestigious universities, the city offers a wide array of academic disciplines and research opportunities. From Ivy League powerhouses like Columbia University and Cornell University to renowned institutions like New York University and The City University of New York, the city's universities attract top talent, foster intellectual growth, and contribute to groundbreaking discoveries in various fields.
Demographically, New York City is a true mosaic. The population is composed of people from various ethnic backgrounds, including a large number of immigrants. According to the latest data, the city's population is incredibly diverse, with individuals of Hispanic, African American, Asian, and European descent, among others. The city also embraces a wide range of religions, languages, and traditions, making it a truly cosmopolitan city.
Unfortunately, recent data shows that New York City renters still struggle to keep up with rent payments.
Summary of New York City Multifamily Real Estate Performance in Q1 2023
Vacancies for New York City multifamily real estate reached 2.9% in Q1 2023, a quarter-over-quarter increase from Q4 2022's figure of 2.4% and Q3 2022's figure of about 2.0%.
Approximately 22,779 multifamily units were absorbed in Q1 2023.
What Are Multifamily Rents Like in New York City?
The average asking rent for New York City multifamily real estate was about $3,003 per unit, per month in Q1 2023; Manhattan's asking rent averaged just over $5,000 per unit.
Year-over-year, rents increased by about 2.8%.
Purchase & Leasing Activity
Sales volume for New York City multifamily real estate dropped to $1.68 billion, a 58% decrease year-over-year.
Manhattan had the highest multifamily sales volume at about $1 billion.
Notable Multifamily Real Estate Deals in New York City in Q1 2023
There were several notable deals that took place for New York City multifamily real estate in Q1 2023:
- Fortress Investment Group purchased 273 units for $598 million at $2.1 million per unit.
- Avanath Capital Management LLC purchased 250 units for $101 million at $405,000 per unit.
- BLDG purchased 103 units for $86.5 million at $839,000 per square foot.
These are select examples among other activity.
New Multifamily Real Estate Development Activity in New York City in Q1 2023
About 65,618 new multifamily units were under construction in New York City in Q1 2023, a year-over-year increase from Q1 2022's figure of about 58,048 units.
The average price per square foot for New York City multifamily in Q1 2023 was about $414 across all transactions; about 3,793 new multifamily units were delivered in Q1 2023, as well.
Market Forecast for New York City's Multifamily Real Estate Market
Tenant demand in New York City's multifamily real estate market currently outweighs supply. This will likely continue to push rents higher as buyer competition increases.
Takeaways for Multifamily Real Estate Investors
Nearly 55% of transactions in Q1 2023 for New York City multifamily real estate were predominantly free-market apartment buildings. These types of buildings also accounted for 78% of the total dollar volume for the quarter.
Small multifamily buildings also performed well: In Brooklyn, small multifamily units garnered about $181 million in sales volume.
Do your research, stay diligent, and happy investing.
Methodology
This report was written with property information from the MyEListing.com platform in corroboration with other freely available commercial real estate research data.
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