THE 4 MINDSETS OF NYC MULTIFAMILY INVESTORS

12/6/2016

2016 was a transitional year in many ways for the New York City multifamily business. Financing, buyers’ mindsets, pricing, rents, and other aspects of the business changed.  To gain a better understanding of our clients, we surveyed several thousand owners and investors about various market topics. I think you’ll be surprised at some of the answers I’ll share with you below.

Are you Buying Next Year?

Many investors pointed out that we are in the late stages of a market cycle, and are therefore more selective about what they purchase. That said, our first question was: “Do you plan on buying another New York City multifamily property in 2017?”

Do you want to invest in Free Market or Regulated Buildings?

Regulation, various confusing court decisions, and the impact of the New York Rent Regulation Act of 2015 caused problems in transactions this year. We wanted to see if regulation was impacting what investors were looking to buy. So we asked: “In your next purchase, would you prefer to buy a building that is mostly free-market or rent stabilized?”  Response:

In Which Borough do you want to invest?

Every time I present on the market in front of a large group I am always asked, “What is the best market to purchase next year?” Interestingly, we asked investors to rank which borough they would make a purchase in. This is the first time that both Manhattan and Brooklyn were represented almost evenly. Response:

Where do you think values will be 3 Years from now?

Most telling about the strength of the market, we asked Investors their opinion of future values. Instead of asking about prices in 2017, we looked 3 years out as I believe this is more relevant. So we asked, “Three years from now, do you think prices will be the same, lower, or higher?”  Response:

The answers above demonstrate why NYC Multifamily continues to be the most sought-after residential market in the world.  I wish you the best of luck with your future investments.