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NYC Multifamily Enters 2020 in “State of Flux”
With vacancy “near its lowest practical level,” New York City’s apartment sector would seem to be an easy first choice for investors. However, says Marcus & Millichap, “the New York multifamily market enters 2020 in a state of flux following the enactment of new legislation governing rent-regulated apartments in June of last year.”
Although New York remains an active commercial real estate investment destination, Marcus & Millichap’s multifamily investment forecast notes that transaction velocity declined markedly during the second half of 2019, likely stemming from rent reform.
“Multiple avenues for converting rent-stabilized units to market rates have been repealed and the financial feasibility to conduct capital improvements has been hampered,” according to Marcus & Millichap. “Many investors of these assets will most likely have to reevaluate their strategies.”
One avenue cited in the report is a shift in focus “toward unregulated newer assets or properties with a mixed-use component.”
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