Partying Like It’s 2015: Multifamily Housing In New York City
Abstract
Partying Like It's 2015: Multifamily Housing In New York City getty getty Multifamily investment sales in New York City grew substantially during 2022, with over 506 transactions valued at $13.2 billion for buildings with 10 or more units, according to data from our 2022 New York City Multifamily Year in Review report. The Bronx enjoyed a resurgence in 2022 with $1.1 billion in multifamily sales from 89 transactions, the borough's best year in both categories since 2018. The Big Drivers: Free-Market Multifamily Sales Outpace Rent-Stabilized Sales Free-market multifamily assets or those with a 421a tax exemption attracted the attention of both institutional and international investors and represented 76 percent of the total multifamily dollar volume in 2022. Some of these names are long-term New York City investors, but several are new to the city or to the multifamily asset class. Not all Multifamily Was Created Equal: Investors Shift Away from Rent Stabilized Major institutional capital pivoted drastically from rent stabilized assets when compared to 2015. In contrast, in 2022, investments in rent stabilized buildings only totaled $3 billion, a substantially lower number as a result of HSTPA. HSTPA eliminated the ability to adequately increase rents in vacant rent stabilized units, among other restrictions, resulting in three major consequences: These factors are especially concerning for multifamily owners that bought prior to the 2019 regulatory changes and is an issue that has had unintended consequences for tenants as well, given the age and deteriorating condition of many of the buildings. "There are a growing number of owners that have become fatigued with operating multifamily properties in New York City," my partner Victor Sozio observed.
