AVISON YOUNG 2018 NYC Property Sales Transaction Volume & - PowerPoint PPT Presentation

AVISON YOUNG

2018 NYC Property Sales Transaction Volume & Number of Sales by Year $45B $90 3,000 $80 Total Dollar Volume 2,500 $70 35% $60 2,000 # of Sales Billions $50 Year-Over-Year 1,500 $40 $30 1,000 1,565 $20 500 $10 Total Number of Sales $0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 10% Total Dollar Volume # of Sales Year-Over-Year Total dollar volume 10-year average: $41B 3 Source: Real Capital Analytics

2018 New York City Investment Sales Summary Total Dollar % Δ % Δ Price Per # of Sales Cap Rate Volume YOY YOY Square Foot $13.6B 64% 750 13% 4.52% $525 Multi-Family $18.8B 17% 164 1% 4.89% $949 Office $4.5B 64% 163 16% N/A $275 Development $4.7B 8% 365 8% 4.53% $1,011 Retail 4

2018 NYC Borough Overview Percentage of Total NYC Sales 2018 NYC Sales by Borough 16% 14% 12% Upper Bronx 10% Manhattan 3% 8% 3% 6% 4% Manhattan 2% 68% 0% 2016 2017 2018 Brooklyn Queens Bronx Queens 11% Percentage of NYC Total 2016 2017 2018 Brooklyn 12% 14% 14% Brooklyn 14% 7% 8% 11% Queens Bronx 4% 6% 3% Total 23% 28% 28% 5

2018 Manhattan Investment Sales $24B 392 2018 Manhattan Investment Sales Total Dollar Volume Total Number of Sales 37% YOY 31% YOY Number of Sales Total Dollar Volume by Asset Class by Asset Class 8% 8% 14% 13% 15% 14% 7% 54% 15% 14% 4% 35% 6

Top 5 Manhattan Sales in 2018 4 5 1 2 3 Chelsea Market 666 Fifth ABC/Silverstein Terminal Stores St. John's Terminal 75 Ninth Avenue Avenue (office) Portfolio 261-271 11th Avenue 340 West Street $2,397,501,899 $900,000,000 $1,286,083,000 $1,155,000,000 $700,000,000 7

2018 Manhattan Multi-Family Investment Sales $3.4B Total Dollar $ Historical Multi-Family Pricing Volume $1,200 6% 9% YOY $1,000 5% 136 Number $1,127 of Sales $800 4% -18% YOY $600 3% 3.66% 3.55% Average Cap Rate $400 2% -10 bps YOY $200 1% $995 Average price $0 0% per square foot 2011 2012 2013 2014 2015 2016 2017 2018 -7% YOY Price per Square Foot Cap Rate 8

2018 Manhattan Retail Investment Sales $1.7B Total Dollar $ Historical Retail Pricing Volume $4,000 7% 63% YOY $3,485 $3,500 6% 60 Number $3,000 of Sales 5% 33% YOY $2,500 4% $2,000 4.84% 3% Average 3.69% $1,500 Cap Rate 2% 58 bps YOY $1,000 1% $500 $2,135 Average price $0 0% per square foot 2011 2012 2013 2014 2015 2016 2017 2018 -31% YOY Price per Square Foot Cap Rate 9

2018 Manhattan Office Investment Sales $13B Total Dollar $ Volume Historical Office Pricing $1,400 6% 22% YOY $1,176 $1,200 5% 54 Number of Sales $1,000 4% 38% YOY $800 3% 3.84% 4.31% $600 Average Cap Rate 2% $400 11bps YOY 1% $200 $969 Average price $0 0% per RSF 2011 2012 2013 2014 2015 2016 2017 2018 1% YOY Price per Square Foot Cap Rate 10

2018 Manhattan Development Investment Sales $3B Total Dollar $ Historical Development Pricing Volume $800 101% YOY $700 58 Number $600 of Sales $681 -19% YOY $500 $400 4.7M Total $300 BSF $200 $100 $655 Average price $0 per BSF 2011 2012 2013 2014 2015 2016 2017 2018 17% YOY Price per Square Foot 11

2018 Foreign Investments in New York City Top 10 Foreign Countries Investing in NYC Foreign vs. Domestic Buyers China 2% Switzerland 2% Sweden 2% Israel 4% 4% South Korea 5% 19% Dollar Qatar Total 8% Canada Volume Sales 41% Australia 8% 81% Netherlands 96% 12% Germany Foreign 16% Domestic Foreign investment as a percentage of total dollar volume has decreased by 50% from 2015 high China’s investment has decreased from 33% in 2015 to 2% in 2018 12

2019 Predictions New York City dollar volume will continue to surpass the 10-year average with $45B driven by office, boroughs and unsuccessful refinances. Multi-family sales volume dropped 23% to $10B due to rent regulations. Citywide cap rates will expand by 25 bps to 4.75%. Retail sales volume will stabilize but cap rates will rise to 5.25%. Manhattan office sales will set an all time record at $1,250 PSF driven by new construction sales. 13

2019 Predictions Development sales will experience a 20% uptick attributed to Opportunity Zones. Foreign investments will remain flat as domestic buyers continue to lead the way. The Boroughs account for over 30% of the sales volume due to Opportunity Zones and Amazon. 14

The Amazon Effect Amazon would spend December 2018 saw 30% Amazon to bring 25,000 about $2.5 billion to more residential sales in jobs to Long Island City, create an 8.5 million Long Island City compared in exchange for as much square foot campus on with November 2017 as $3 billion in state and the East River waterfront city incentives Long Island City home Amazon to bring in over prices surge after Amazon $27 billion in state and HQ2 announcement local tax revenue that can help improve subways and buses 15