In the Queens submarket, there was $236 million of sales activity in the third quarter, resulting in $696 million for the first three quarters of the year. Annualizing this total, $928 million is projected for 2011. If the market stays on this pace, the total would be 70 percent above the $547 million achieved in 2010 and 55 percent above the $597 million in 2009. In Queens, 2010 was the low point with just $547 million in sales. The projected $928 million in sales for 2011 would be 64 percent below the 2006 peak point of $2.6 billion in dollar volume.
In the submarket’s third quarter there were 97 properties sold, the highest quarterly total going back to 2009. Thus far in 2011, there have been 269 properties sold in the borough. Annualizing this total, 359 sales are projected to occur in the Queens submarket this year, which would represent a 19 percent increase from the 302 properties sold last year, a low point in the marketplace. If the market achieves the 359 sales as we project, this figure would remain 70 percent below the peak activity level seen in 2006, when 1,191 properties sold.
The conclusion we can draw from all of this data is that the market’s recovery remains uneven. While the market is generally trending upward, the third quarter demonstrated a setback compared to the previous quarter, as dollar volume was up in Northern Manhattan, the Bronx and Queens, but dropped in Manhattan and Brooklyn. The drop in Manhattan was significant enough to create an overall reduction of 25 percent from the second quarter to the third on a market-wide basis.
With regard to the number of properties sold, three submarkets experienced increases in third-quarter totals over the past quarter. Those markets were Manhattan, the Bronx and Queens, while Northern Manhattan and Brooklyn saw third-quarter totals fall from the prior quarter.
The average prices of properties sold in each of the submarkets also demonstrates an uneven recovery. In Manhattan ($35.44 million), Northern Manhattan ($2.60 million) and the Bronx ($2.40 million), the 2011 averages thus far have been well below were they were at the peak of the market in 2007. In Brooklyn ($1.98 million) and Queens ($2.59 million), the 2011 averages hit all-time highs.
These mixed signals from the market have clearly been impacted by the volatility in the broader economy. Global economic stress has impacted the public financing market, which has trickled down into the commercial real estate capital markets. Each submarket is generally trending upward but there is no denying the speed bumps along the way.
rknakal@masseyknakal.com
Mr. Knakal is the chairman and founding partner of Massey Knakal Realty Services and in his career has brokered the sale of more than 1,175 properties, having a market value in excess of $7.8 billion.
