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Rent Regs Will Pinch MF Pricing, But Not Across the Board
The recent enactment of reforms to New York State’s rent-control regulations will affect not only multifamily sales volume but also pricing, says Ariel Property Advisors. However, the impact won’t occur across the board.
“While pricing for most multifamily assets will go down based on several factors, some properties will only be slightly impacted, while others will not be affected at all, such as free market buildings, old 421-a rental buildings, and some affordable housing multifamily assets,” said Shimon Shkury, president of Ariel.
On an annualized basis, sales volume for the first half of 2019 stood at its lowest since 2011, with dollar declines down 48% year-over-year and transaction volume down 56%. “In light of the new laws, we have revisited our underwriting methods for every type of multifamily asset and have been advising sellers of these buildings on a daily basis about our view of the current climate,” Shkury said.
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