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NYM INVESTMENT REPORT AUGUST 2017 www.newyorkmultifamily.com PETER VON DER AHE O 212.430.5114 m [email protected] 5 Multifamily Strategies for a Flat Market S tock market trading activity is very low. According to a WSJ article because the economy is not too hot, and not too cold, investors are acting as if the best move was not to make any move at all. In the world of investing, is holding cash (and not investing) a good investment? For NYC multifamily, after the pricing peak in late 2015 and subsequent transition (where prices declined between 5-8%), pricing has been somewhat flat in 2017. Multifamily investors are asking the same question: what is the right move in a flat market? While the market may not be moving up or down today, investors should prepare for what’s ahead. Standing still can cost you. There are several strategic moves investors could make. Let’s explore 5 possibilities: #1 Exploit Market Inefficiencies One reason the market is flat is there is no industry- wide consensus that pricing is moving up or down. By definition, there is confusion. Investors should exploit this inefficiency. Its one reason to love commercial real estate. For example, certain sellers will discount the future value of their asset, by lowering future projections too much, creating a buying opportunity. Others will “overprice” their properties on the market, limiting buyer activity. This leads to something we call “sellers fatigue” and many times these properties sell 9-12 months later below market value. As DL would say, “hang around the hoop.” #2 Renovate Sometimes the best return on new equity actually exists in your current holdings. In flat markets, you may not be buying and selling, but it’s important to stay in motion, be creative, and create value. Renovate, utilize unused air rights or square footage, restructure leases, and reduce expenses by increasing efficiency. These value added activities will... ( continued on page 7 ) 06 WHY NYM? Learn why our clients choose the most specialized multifamily team in NYC 03 manhattan Active Listings & Recent Sales in Manhattan below 96th Street 02 contracts+ CLOSINGS See what's gone under contract and closed since January 1st 05 UPPER MANHATTAN & Bronx Active Listings & Recent Sales in Upper Manhattan and the Bronx 07 ADVERTISING 04 BROOKLYN & QUEENS Active Listings & Recent Sales in Brooklyn and Queens in this issue 13-Story, New Construction, Elevator Building in the LES. 78 UNITS 63,410 SF JUST CLOSED $61,500,000

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Page 1: REPORT AUGUST 2017 - NYM€¦ · REPORT AUGUST 2017 PETER VON DER AHE O 212.430.5114 m pvonderahe@mmreis.com 5 Multifamily Strategies for a Flat Market S tock market trading activity

NYM INVESTMENTREPORT AUGUST 2017

www.newyorkmultifamily.com

PETER VON DER AHEO 212.430.5114 m [email protected]

5 Multifamily Strategies for a Flat Market

Stock market trading activity is very low. According to a WSJ article because the economy is not too hot,

and not too cold, investors are acting as if the best move was not to make any move at all. In the world of investing, is holding cash (and not investing) a good investment?

For NYC multifamily, after the pricing peak in late 2015 and subsequent transition (where prices declined between 5-8%), pricing has been somewhat flat in 2017. Multifamily investors are asking the same question: what is the right move in a flat market?

While the market may not be moving up or down today, investors should prepare for what’s ahead. Standing still can cost you. There are several strategic moves investors could make. Let’s explore 5 possibilities:

#1 Exploit Market InefficienciesOne reason the market is flat is there is no industry-wide consensus that pricing is moving up or down. By definition, there is confusion. Investors should exploit this inefficiency. Its one reason to love commercial real estate. For example, certain sellers will discount the future value of their asset, by lowering future projections too much, creating a buying opportunity. Others will “overprice” their properties on the market, limiting buyer activity. This leads to something we call “sellers fatigue” and many times these properties sell 9-12 months later below market value. As DL would say, “hang around the hoop.”

#2 RenovateSometimes the best return

on new equity actually exists in your current holdings. In flat markets, you may not be buying and selling, but it’s important to stay in motion, be creative, and create value. Renovate, utilize unused air rights or square footage, restructure leases, and reduce expenses by increasing efficiency. These value added activities will... ( continued on page 7 )

06 WHY NYM?Learn why our clients choose the most specialized multifamily team in NYC

03 manhattanActive Listings & Recent Sales in Manhattan below 96th Street

02 contracts+ CLOSINGS

See what's gone under contract and closed since January 1st

05 UPPER MANHATTAN & Bronx

Active Listings & Recent Sales in Upper Manhattan and the Bronx

07 ADVERTISING

04 BROOKLYN & QUEENS

Active Listings & Recent Sales in Brooklyn and Queens

in this issue

13-Story, New Construction,Elevator Building in the LES.

78 UNITS63,410 SF

JUST CLOSED

$61,500,000

Page 2: REPORT AUGUST 2017 - NYM€¦ · REPORT AUGUST 2017 PETER VON DER AHE O 212.430.5114 m pvonderahe@mmreis.com 5 Multifamily Strategies for a Flat Market S tock market trading activity

$634,000,000+signed contracts and closings this year

$107,905,000 $26,950,000 $63,847,500 $84,950,000 $224,505,000 $126,645,000

VISION BUILDERS PORTFOLIO

CONTRACT SIGNED$21,000,000

35 CLAVER PLACECLOSED

$14,200,000

265-273 WEST 146TH STREET

CLOSED$23,000,000

339 EAST 75TH STREET

CLOSED$9,800,000

LORING PLACE NORTH PORTFOLIO

CLOSED$38,500,000

BK-18 PORTFOLIOCLOSED

$72,930,000

JONES L.E.S.CLOSED

$61,500,000

WEST 151ST ST PORTFOLIO

CONTRACT SIGNED$18,500,000

832 AVENUE OF THE AMERICAS

CLOSED$12,750,000

46 BANK STREETCLOSED

$6,260,000

231-235 WEST 230TH STREET

CLOSED$20,000,000

509 SARATOGA AVENUE

CLOSED$5,500,000

63 PERRY STREETCLOSED

$18,000,000223 MOTT STREET

CLOSED$9,500,000

56 WEST 11TH STREET

CLOSED$37,750,000

JEFFERSON-MACDONOUGH BROOKLYN

CONTRACT SIGNED$15,750,000

FRESH POND ROAD PACKAGE

CONTRACT SIGNED$4,300,000

WEST 10TH STREET

CONTRACT SIGNED$18,000,000

NORTH 10TH STREET

CONTRACT SIGNED$5,300,000

EAST 220TH STREET

CONTRACT SIGNED$7,450,000

WEST 10TH STREET

CONTRACT SIGNED$23,000,000

MONROE PL. & HENRY ST.

CLOSED$11,200,000

277 WEST 11TH STREET

CLOSED$20,000,000

104 EAST 85TH STREET

CLOSED$12,500,000

165 AVENUE B

CLOSED$7,215,000

15 WILSON AVENUE

CLOSED$2,350,000

2 ADDITIONAL PROPERTIES

CLOSED$3,650,000

7 ADDITIONAL PROPERTIES

CLOSED$22,950,000

3 ADDITIONAL PROPERTIES

CONTRACTS SIGNED$9,375,000

DRIGGS AVENUE

CONTRACT SIGNED$4,750,000

4 ADDITIONAL PROPERTIES

CLOSED$7,445,000

316 LEXINGTON AVENUE

CLOSED$7,037,500

104 EAST 30TH STREET

CLOSED$7,150,000

30-58 AND 30-64 34TH STREET

CLOSED$20,500,000

9TH AVE. & WEST 52ND ST.

CONTRACT SIGNED$10,950,000

523B EAST 85TH STREET

CLOSED$8,140,000

3 ADDITIONAL PROPERTIES

CLOSED$14,500,000

2 ADDITIONAL PROPERTIES

CONTRACTS SIGNED$10,300,000

2512 UNIVERSITY AVENUE

CLOSED$4,650,000

122 4TH AVENUECLOSED

$2,100,000295 NORTH 7TH STREET

CLOSED$1,850,000

2 ADDITIONAL PROPERTIES

CONTRACTS SIGNED$3,200,000

2017 YEAR-TO-DATE CONTRACTS SIGNED

NEW YORK MULTIFAMILY

We have been busy this year. How can the most active NYC Multifamily team

help you?Call Peter: (212) 430-5114

- 2 -

JAN FEB MAR APR MAY JUN

Page 3: REPORT AUGUST 2017 - NYM€¦ · REPORT AUGUST 2017 PETER VON DER AHE O 212.430.5114 m pvonderahe@mmreis.com 5 Multifamily Strategies for a Flat Market S tock market trading activity

MANHATTAN

JOE KOICIMTel: (212) [email protected]

DAVID LLOYDTel: (212) [email protected]

DANNY HANDWEILERTel: (212) [email protected]

COREY ISDANERTel: (212) [email protected]

LOGAN MARKLEYTel: (212) [email protected]

277 West 11th Street SOLD22,686 SF • $20,000,000

NEW YORK MULTIFAMILY

West 19th St ON MARKET38 Units • $33,000,000

West 43rd St ON MARKET9,550 SF • $12,250,000

12 Perry Street SOLD25 Units • $25,132,000

- 3 -

AUGUST 2017www.newyorkmultifamily.comwww.newyorkmultifamily.com

ON MARKETDOWNTOWN

BROADWAY

$52,000,000BUILDABLE SF 64,430

Page 4: REPORT AUGUST 2017 - NYM€¦ · REPORT AUGUST 2017 PETER VON DER AHE O 212.430.5114 m pvonderahe@mmreis.com 5 Multifamily Strategies for a Flat Market S tock market trading activity

NEWYORK MULTIFAMILY NICHE EXPERTISE

BROOKLYN AND QUEENS

SHAUN RINEYTel: (718) [email protected]

MICHAEL SALVATICOTel: (718) [email protected]

TOMSHIHADEHTel: (718) [email protected]

DANGREENBLATTTel: (718) [email protected]

DYLANWALSHTel: (212) [email protected]

NEW YORK MULTIFAMILY

ON MARKETBROOKLYN, NY

SPENCER STREET STUDENT APARTMENTS

$48,950,00082 UNITS | SF 96,246 | 4.6% CAP RATE

16 Monroe Pl and 268 Henry St SOLD19 Units • $11,200,000

Inception Portfolio ON MARKET 112 Units • $31,500,000

FPR-Onderdonk Package ON MARKET16 Units • $6,700,000

- 4 -

AUGUST 2017

The Jefferson-MacDonough Collection UNDER CONTRACT• $15,750,000

Page 5: REPORT AUGUST 2017 - NYM€¦ · REPORT AUGUST 2017 PETER VON DER AHE O 212.430.5114 m pvonderahe@mmreis.com 5 Multifamily Strategies for a Flat Market S tock market trading activity

AUGUST 2017

NEWYORK MULTIFAMILY NICHE EXPERTISE

www.newyorkmultifamily.com

UPPER MANHATTAN / BRONX

www.newyorkmultifamily.com

SETH GLASSERTel: (212) [email protected]

MICHAEL FUSCOTel: (212) [email protected]

JACOB KAHNTel: (212) [email protected]

JONAH OFFITZER Tel: (212) [email protected]

NEW YORK MULTIFAMILY

East 220th St UNDER CONTRACT 49 Units • $7,450,000

231-235 West 230th St SOLD93 Units • $20,000,000

- 5 -

ON MARKETWASHINGTON HEIGHTS

EDGECOMBE AVENUE

$65,000,000127 UNITS | SF 168,000

Hobart Avenue ON MARKET56 Units • $11,995,000

Audubon Avenue ON MARKET34,385 SF • $30,000,000

Page 6: REPORT AUGUST 2017 - NYM€¦ · REPORT AUGUST 2017 PETER VON DER AHE O 212.430.5114 m pvonderahe@mmreis.com 5 Multifamily Strategies for a Flat Market S tock market trading activity

NNN PROPERTIESWHERE WOULD YOU PUT THE MONEY IF YOU SOLD?We sell more Triple-Net Properties than any other firm in the country.

Transitioning from an average Triple-Net Property typically DOUBLES or, in some cases, TRIPLES your net cash flow. We invite you to let us demonstrate how we can increase your cash flow. To the right is a sampling of our NNN activity.

PETER VON DER AHE | 212.430.5114EMAIL SUBJECT LINE: “NNN” TO [email protected]

AUGUST 2017

NEW YORK MULTIFAMILY- 6 -

BOSTON MARKET AVAILABLECap Rate: 3.75% Asking Price: $4,480,000

HARDEE'S CLOSEDCap Rate: 6.00% Sale Price: $2,326,467

ENTERPRISE AVAILABLECap Rate: 5.25% Asking Price: $1,085,390

BOB EVANS CLOSEDCap Rate: 5.75% Sale Price: $2,652,174

WHY OUR CLIENTS CHOOSE THE New York Multifamily TEAM?

NICHE EXPERTISEWe specialize only in multifamily properties, only in New York City, customizing our strategy around you.

CREATING OPPORTUNITIESWe are positioned to source exclusive opportunities for our clients – our sellers frequently become buyers with NYM.

MIDDLE MARKETBacked by the nation’s largest private client brokerage, we bridge the gap between private and institutional capital.

BROKERAGE AS A VERBWe don’t simply market properties – we aggressively sell them in pursuit of the best outcomes for clients.

Page 7: REPORT AUGUST 2017 - NYM€¦ · REPORT AUGUST 2017 PETER VON DER AHE O 212.430.5114 m pvonderahe@mmreis.com 5 Multifamily Strategies for a Flat Market S tock market trading activity

MMCC COMMERCIAL FINANCING

AUGUST 2017

NEWYORK MULTIFAMILY NICHE EXPERTISE

www.newyorkmultifamily.comwww.newyorkmultifamily.com

NEW YORK MULTIFAMILY

Strong, existing relationships with both national and regional lenders. With more than 10 years in the real estate industry, Andrew leads our capital team in securing commercial debt financing for an array of property types.

ANDREW DANSKER(212) [email protected]

- 7 -

pay off in multiples in the future.

#3 RefinanceThere is a paradox of the banking industry. When you don’t need money, banks are willing to lend it, and when you do…the lending windows are closed. Flat markets can be a reminder to refinance under leveraged buildings so you have a dry powder for future opportunities.

#4 Trade to Improve Cash FlowInvestment properties in NYC (regardless of location) sell at a premium, and owners can capitalize on this arbitrage. For example, selling a NYC apartment property and purchasing a triple-net leased (NNN)

asset typically improves your cash flow by 2x-3x. If prices remain stagnant for several years (or decline), the benefits are multiplied.

#5 Trade to Improve LocationClosely related to “improving cash flow”, is improving location. After market peaks, class “A” properties in “A” locations are priced very similarly to “C” properties in “C” locations. Take advantage and upgrade the quality and location of your asset. Many choose not to make this move because the free cash flow may decrease slightly. This is a temporary illusion. From a net worth perspective 5 to 7 years after this transition has been made, your upgraded investment will likely be more valuable. Great investors

play the long game.

I don’t like the metaphor of the real estate market as a repeating cycle. Although there are times when that description fits, often it doesn’t. It obscures your viewpoint and judgment. The only market you know, is the one you currently have, and even if its flat, there are opportunities to create value for yourself and your investors.

PETER VON DER AHEO 212.430.5114 m [email protected]

5 Multifamily Strategies for a Flat Market(continued from cover)

ADVERTISING SECTION

Page 8: REPORT AUGUST 2017 - NYM€¦ · REPORT AUGUST 2017 PETER VON DER AHE O 212.430.5114 m pvonderahe@mmreis.com 5 Multifamily Strategies for a Flat Market S tock market trading activity

NYM INVESTMENT REPORTM A N H AT TA N I B R O O K LY N I Q U E E N S I B R O N X

NEW YORK MULTIFAMILYNICHE EXPERIENCE

260 MADISON AVENUE 5TH FLOORNEW YORK, NY 10016

NYC'S LEADING MULTIFAMILYINVESTMENT SALES TEAM

183 $1.8SALES

TOTAL SALES2015 + 2016

TOTAL VOLUME2015 + 2016

BILLION