MNS Real Impact Real Estate

Introduction

MNS is proud to present the Fourth Quarter 2013 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 Fourth Quarter of 2013 (10/01/13 – 12/31/13). All data summarized is on a median basis.

Market Snapshot

Year-Over-Year Median PPSF - up 34%
Quarter-Over-Quarter Median PPSF - up 20%

Year-Over-Year Median Sales Price - up 57%
Quarter-Over-Quarter Median Sales Price - up 72%

Manhattan New Development Sponsor Sales - down 23.5% from last quarter
Neighborhood with the Most New Dev Sales: Upper East Side - 18% of Manhattan New Dev Sales

Total New Development Sales Volume - Up 9.7% to $923.9 Million from $842.1 Million in 3Q13

Largest Quarterly Up-Swing: TriBeCa
PPSF $1,724/SF from $1,131/SF
Sales Price $3,054,750 from $771,530

Largest Quarterly Down-Swing: Gramercy
PPSF $1,533 from $2,455
Sales Price $2,087,412 from $7,988,159

Highest New Development Sale:
15 Central Park West – Apt# 26B - $15.5 million

Highest New Development Sale PPSF:
18 Gramercy Park South – Apt# 8 – $6,548 PPSF

Market summary:

Throughout the fourth quarter, a traditionally slower paced buying period, sales of New Development Condominiums experienced significant upturns in several metrics. Since the previous quarter Median Sales Price increased to $1,837,941 from $1,067,654. Similarly Median Price per Square Foot increased to $1,471 from $1,222. Not including Harlem, Median Price per Square Foot in Manhattan rose to $1,560, while Median Sales Price reached $2,049,228.

Although the number of transactions dropped considerably compared to the previous quarter, from 434 to 332 in 4Q13, overall dollar volume for Sponsor sales surged to just under $1 Billion to end 2013 at $923,875,249 (up 9.7% since 3Q13). Sponsor sales in New Development properties were mostly comprised of larger units in luxury projects, the majority of which were concentrated in Chelsea, Upper West Side and Upper East Side. A persistent lack of condo inventory and rapid absorption rates resulted in record sales for new condominiums hitting the market in 2013.

In spite of rising interest rates, it can be expected that 2014 will be another fast paced year for New Development sales in Manhattan. It can be expected that median prices will remain at record levels due to a lack of available condominium inventory throughout the borough and frequency of all-cash buyers.

Market up-swings:

The Upper East Side experienced the most sales of any Manhattan neighborhood in 4Q13. The majority of these transactions occurred in luxury condos from 65th-80th Street. New Development properties in this neighborhood have performed very well since last quarter and over the long term --most notably Median Price per Square Foot increased by 34% since 4Q12.

New Developments in Chelsea maintained a strong performance from the previous quarter as overall pricing throughout the neighborhood was boosted by sales of larger units: Over 65% of sales in Chelsea were units above 1,200 Square Feet. Also, several high-end sales continued in Gramercy where three units priced above $15 Million sold at 18 Gramercy Park South during 4Q13.

Market down-swings:

Median Price Per Square Foot (-7.1%) and Median Sales Price (-6.7%) of New Development sales in Harlem dipped slightly from 3Q13. This was due to a lack of upper market inventory, which was sold during the previous quarter.

Sales Volume:

After registering the most sales of any neighborhood in 3Q13, the number of New Development transactions in Midtown West dropped from 20% of total borough sales to 6% during 4Q13. Going into 2014, the market for New Development Condominiums in Manhattan will continue to be dictated by very low absorption rates and lack of available units. This can be expected to result in rising offering prices and limited flexibility from sponsors.

In tracking the neighborhoods that sold the most amount of 4Q13 new development inventory per unit size:

Studios - Harlem (36%)
One Bedrooms - Midtown West (23%)
Two Bedrooms - Upper West Side (16%)
Three Bedrooms - Upper East Side (30%)