The real estate consultant Ariel Property Advisors experienced a decline in investment sales, despite an increase in transactions in 2024, according to their Queens 2024 Year-End Commercial Real Estate Trends report.
Investment sales in Queens went down 7% year-over-year, from $3.18 billion in 2023 to $2.95 billion in 2024. One of the most significant contributing factors to this decline in dollar volume was a lack of institutional transactions throughout the year, especially in the second half of 2024. Significant declines in dollar value were seen among development, hotel, office and special purpose sectors, more than canceling out the gains made by multifamily, retail and industrial assets. Development sales, which dropped 32% from $617.38 million to $418.55 million, reached its lowest dollar volume since 2012. Excluding the pandemic year of 2020, this past year saw the dollar volume reach its lowest point since 2013.
While investment sales decreased in Queens, the number of transactions increased by 5%, from 482 in 2023 to 507 in 2024. There are several contributing factors to this trend. The passage of the Good Cause Eviction law, which provides New Yorkers with the right to continue living in their homes without fear of unreasonable eviction or extreme rent increases, has led to a more predictable operating environment for multifamily homes. As a result, transactions among these properties went up 10%, from 227 last year to 249 this year.
The 485-x tax exemption program and the City of Yes initiative, which is focused on zoning reform and maximizing underutilized spaces, are each expected to contribute to more opportunities for development and adaptive reuse in the near future.
With more clarity now available across multiple segments of the commercial real estate market after the 2024 presidential election and the stabilization of federal interest rates, Ariel Property Advisors anticipates much more activity to occur in 2025. They expect more investors to shift from defense to offense.
The redevelopment of JFK Airport drove some of the largest transactions seen in 2024. Two of the most significant transactions related to this were a $246 million portfolio acquisition by Terreno Realty and a $79.2 million sale of Crowne Plaza Hotel, which has been used as a migrant shelter.
“One of the largest transactions in Queens last year was Terreno Realty’s acquisition of an industrial portfolio for $246 million, indicating that investors view this asset type as a stable investment with room for growth,” said Ariel Partner Sean R. Kelly, Esq. “The transaction also
underscores confidence in the JFK area, where a $19 billion public-private redevelopment is transforming the airport into a world-class hub, fueling economic growth and supporting 149,000 jobs.”
