August 22, 2019 Comments Off on Rent-Stabilized Buildings Seeing Lower Deal Volume Views: 1067 New York News, Top New York

Recent changes to regulations of rent-stabilized apartments have dramatically altered New York City’s multifamily landscape, says Marcus & Millichap in its third-quarter report. “Buildings with a plurality of these units now face lower rent growth prospects, impacting cash flows and valuations,” the report says.

Accordingly, Marcus & Millichap reports that trading activity for rent-stabilized buildings has slowed, as both buyers and sellers work to understand the full implications of recent legislation.

“Sales prices are likely to fall to reflect less rent growth potential, with a corresponding increase in cap rates,” the report states. “Properties with a mixed-use component may draw more demand. Market-rate assets will likely see greater investor interest, possibly compressing first-year yields by a minor degree.”

Simultaneously, New York’s multifamily fundamentals are among the healthiest nationwide. “New York City apartments continue to benefit from some of the strongest demand dynamics in the country,” according to Marcus & Millichap.

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Tags: Apartments & Multifamily, Politics, Sale

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Rent-Stabilized Buildings Seeing Lower Deal Volume

Paul Bubny