The 4 Mindsets of NYC Multifamily Investors

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.

Connect with us to stay in the loop on additional information & analysis!

1 Comment

  1. James J Maurer

    Great article!

    Reply

Submit a Comment

Your email address will not be published. Required fields are marked *

Buy Peter's Book Today! Available on Amazon.

Catch up on our most recent posts here:

Experience and Presence in Submarkets Help Close $112M Brooklyn/Queens Portfolio

In New York City, it’s always challenging to close the sale of a multifamily portfolio. It’s especially challenging in 2019 when the properties are spread across 2 boroughs.

The New York Multifamily team of M&M closed such a portfolio of assets in Brooklyn and Queens — a $112,000,000 portfolio of 6 properties representing 423 units and 426,749 square feet. The portfolio ultimately sold to a single buyer. Here’s a look at how this deal came together, and the challenges faced on the path to closing.

read more

How Multifamily Owners Can Take Advantage of Opportunity Zones

When the 2017 Tax Cuts and Jobs Act passed, accountants, investors, entrepreneurs and others scrambled to understand the implications- for multifamily owners there is one clear benefit, the creation of Qualified Opportunity Zones.

This month, I have asked Michael Hurwitz and Abe Schlisselfeld of The Real Estate Group at Marks Paneth LLP to provide some insight about these Qualified Opportunity Zones (“QOZ”).

read more