8/3/2019 NewYorkCity_NAR12

http://slidepdf.com/reader/full/newyorkcitynar12 1/1 page 36 2012 Annual Report

* Estimate ** Forecast

Sources: Marcus & Millichap Research Services, CoStar Group, Inc., RCA

Market Forecast Employment: 1.8% s Construction: 4,750 s Vacancy: 10 bps t Effective Rents: 7.0% s

   U  n

   i   t  s   (   t   h  o  u  s  a  n

   d  s

   )

Completions Vacancy

Supply and Demand

V                                                                                                                                                                                                                                                                                   a                                                                                                                                                                                                             c                                                                                                                                                                                                             a                                                                                                                                                                                                        

n                                                                                                                                                                                                             c                                                                                                                                                                                                                                                                                     y                                                                                                                                                                                                    

R                                                                                                                                                                                                                                                                                  a                                                                                                                                                                                                          t                                                                                                                                                                                                                                                                   e                                                                                                                                                                                                        

$80

$100

$120

$140

$160

   M  e

   d   i  a  n

   P  r   i  c  e  p  e  r

   U  n

   i   t   (   t   h  o

  u  s  a  n

   d  s

   )Sales Trends

08 09 10 11*07

   Y  e  a  r  -  o  v  e  r  -   Y  e  a  r

   C   h  a  n  g  e

 Asking Rents Effective Rents

Rent Trends

09 10 11* 12**08

0

2

4

6

8

09 10 11* 12**081%

2%

3%

4%

5%

-10%

-5%

0%

5%

10%

-100

-50

0

50

100

   T  o

   t  a   l   N  o  n

   f  a  r  m

    J  o

   b  s

   (   t   h  o  u  s  a  n

   d  s

   )  Absolute Change Y-O-Y % Change

Employment Trends

09 10 11* 12**08

Year-over-YearChange

-4%

-2%

0%

2%

4%

New York City will maintain one o the tightest vacancy rates in the

country this year, though unresolved challenges in the global fnancialsystem will create unrest in the securities industry. As homeownership

remains out o reach or nearly 80 percent o households in the city, demandor apartments will remain healthy. In sought-ater neighborhoods o SoHo andribeca, landlords will increase rents to peak levels, while the redevelopment o Lower Manhattan will continue to attract new rental households rom other ar-eas. Nonetheless, the lingering European debt crisis and new regulations hitting

 Wall Street, could cause the fnancial industry to lose up to 10,000 employeesthis year. MF Global, or instance, eliminated 1,600 jobs late last year, while cutsat Barclays PLC, Citigroup, and Bank o America will persist in 2012. Residents

 who are newly unemployed or looking to reduce living expenses will venture tothe outer boroughs or more aordable housing. As a result, vacancy in Brook-

lyn and Queens will compress to the lowest level in nearly a decade.

REIs and institutions will expand their portolios o trophy assets in coreneighborhoods, while opportunistic buyers target under-valued properties inthe outer boroughs. Developers looking to raise capital will orm joint ventures

 with private-equity unds and acquire redevelopment properties in Manhattan. Additionally, intense competition rom REIs will keep cap rates or these assetsnear 5 percent. Te borough’s private investors will target older buildings andreposition properties to capture higher upside over the course o several years. A similar trend will take shape across the East River as investors orm syndicates

 with local operators in Brooklyn. Buyers with a penchant or risk will pay cashor under-perorming buildings in Bedord/Stuyvesant, Prospect Heights and

Bushwick, while long-term hold buyers will target well-occupied properties inGreenpoint and Williamsburg.

2012 Market Outlook

■ 2012 NAI Rank: 3, Down 2 Places. New York City surrendered the top spotin the ranking due to uncertainty surrounding Wall Street employment.

■ Employment Forecast: Ater generating 25,000 positions last year, employ-ers will add 68,000 jobs in 2012, an increase o 1.8 percent.

■ Construction Forecast: Robust demand and solid rent growth will prompt

builders to move o the sidelines and deliver 6,500 units this year.■   Vacancy Forecast: Citywide, vacancy at large, market-rate complexes will

tick down 10 basis points in 2012 to 2.3 percent.

■ Rent Forecast: Asking rents will spike 6 percent this year to $3,107 permonth, while eective rents will soar 7 percent to $3,052 per month.

■ Investment Forecast: As currency exchange rates remain avorable, interna-tional investors will purchase institutional-grade assets throughout New York City. o mitigate risk, these buyers will target buildings with public transpor-tation access in neighborhoods with solid rent growth.

Risks of Financial Job Losses Loom, but

New York Remains a Top Investment Target

New York City Down 2 Places 2012 Rank: 3 2011 Rank: 1