Manhattan New Development Market Report

Updated: April 2012

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Table of Contents:

1. Introduction
2. Market Snapshot
3. Neighborhood Price Trends
   • Harlem
   • Upper West Side
   • Upper East Side
   • Midtown West
   • Midtown East
   • Murray Hill
   • Chelsea
   • Gramercy Park
   • Greenwich Village
   • East Village
   • SoHo
   • Lower East Side
   • TriBeCa
   • Financial District
   • Battery Park City
4. The Report Explained

Introduction

MNS is proud to present the First Quarter 2012 edition of our New Development Market Report™. New Development Sales data, defined as such “Arms-Length” first offering transactions where the seller is considered a “Sponsor”, was compiled from the Automated City Register Information System (ACRIS) for sponsor sales that traded during the First Quarter 2012 (01/01/12 – 03/31/12). All data summarized is on a median basis. This report also includes quarterly tracking graphs over a nine-quarter look back and will continue to track the trends going forward.

Market Snapshot

Year-Over-Year Median PPSF – down 1%
Quarter-Over-Quarter Median PPSF – down 6%

Year-Over-Year Median Sales Price – down 38%
Quarter-Over-Quarter Median Sales Price – down 33%

Manhattan New Development Sales Inventory - down 35 % from last quarter.

Total New Development Sales Volume – down 44% to $375M from $670M in 4Q11

Neighborhood with the Most New Dev Sales: Gramercy (21% of Manhattan New Development Sales)

Largest Quarterly Up-Swing: Upper East Side
PPSF: $1,427/SF from $1,377/SF
Sales Price: $2.71M from $1.49M

Largest Quarterly Down-Swing: Murray Hill
PPSF: $1,267 from $1,596
Sales Price: $1.17M from $1.96M

Highest New Development Sale:
Laureate - 2150 Broadway – #11ABC - $17,066,000

Highest New Development Sale PPSF:
77 Reade St - PHD - $3,972

Market summary:

Although pricing from last quarter is down 33%, it is evident from price per square foot numbers that the market value is still holding steady. What happened this quarter is a major inventory shift in new development sales in Manhattan. A median price of $990K begs the question not of why, but of what.

Last quarter, 37% of the inventory sold was studios and one-bedrooms and this quarter the smaller units accounted for 50% of the inventory. This shift brought median pricing down under $1M from $1.5M last quarter, but a median price per foot of $1,220 (2011 average was $1,235/SF) shows that value is steady, and yet 10% higher than 2010 average of $1,100/SF.

Year-over-year Manhattan new development condominium sales numbers are down 1% (versus up 14% last quarter) on a price per square foot basis ($1,220/SF this quarter versus $1,236/SF in 1Q11). Sales prices are down 38% ($990K this quarter versus just under $1.59M in 1Q11).

Market up-swings:

Due to one $9M sale in the 8-Unit boutique condo at 350 West Broadway, SoHo’s off the chart pricing this quarter might be what the NYTimes referred to as a “Blip”. The real upswings can be found downtown, where the condo-hotel market dominated FiDi this quarter and pushed the median price per square foot up to $1,274/ SF from $922/SF last quarter. 60% of the market downtown sales came from Setai, W, and The Hyatt.

Midtown West, which includes the midtown Setai on 5th Ave with a median sales price of $1,730/SF, also had a great showing from 13 closings at The Sheffield at a median sales price of $1,610/SF.

The only new development product on Upper East Side was from 1212 Fifth Ave, and the duplexes at 949 Park Ave. However, strong demand in the long established neighborhood increased its year-over-year median price per square foot 7% to $1,427/SF and its median sales price to $2.7M.

Market down-swings:

On the downside, price per square foot moved on average $90/SF, indicating many stable neighborhood sales prices. Chelsea lost a little luster this quarter with a 4Q11 median of $1,296/SF (vs $1,409/SF in 3Q11). Just 11 sponsor units closed this quarter. Absorption of the 63 units on the market listed at a median of $1,390 is estimated to be about 15 months.

Inventory analysis:

Manhattan new development sales inventory numbers are down 35% from last quarter, and this quarter’s total sales volume was just $375M, almost cutting the volume in half from last quarter.

Last quarter, 20% of new development sales were $3M-$4M apartments on the Upper West Side. This quarter, 20% of new development sales were in Gramercy at the condo One48 with a median price of $750K. In addition, 15% of new development sales were in Harlem so this dramatic shift in inventory is what caused the 33% drop in median sales price.

In tracking the neighborhoods that sold the most amount of 4Q11 new development inventory per unit size:

Studios - Gramercy (63%)
One Bedrooms - Harlem (20%)
Two Bedrooms - Harlem (23%)
Three Bedrooms (1500 +) - Upper West Side (36%)

Market Snapshot