Ariel Property Advisors

Multifamily Month In Review: New York City

December 2011 Multifamily Transaction Overview Featuring Trailing Six Month Analysis: July - December11 + Up-To-Date Multifamily Market Indicators By Ariel Property Advisors

Released February 2012

Ariel Property Advisors is pleased to present its Multifamily Month In Review: New York City. The report provides a monthly overview of market activity, benchmark transactions, revenue and expense trends, and current events that affect the multifamily real estate market. The Multifamily Month In Review is distributed to our clients on a monthly basis. Past versions of the Multifamily Month In Review can be found at http://arielpa.com/research/reports/.

Table Of Contents New York City Multifamily Month In Review Month To Month Performance Comparison Trailing Six Month Analysis Pricing Indicators Trailing Six Month Performance Comparison Transaction & Dollar Volume Trailing Analysis Macro-Economic Overview & Market Fundamentals NYC Sub-Market Overview Manhattan Northern Manhattan Brooklyn The Bronx Queens
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About Ariel Property Advisors

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Multifamily Month In Review: New York City

Ariel Property Advisors

Multifamily Month In Review: New York City

Dear Friends: December 2011 saw a slew of year-end institutional multifamily transactions lead to a surge in dollar volume but transaction volume remained relatively level compared to previous months. For the month, there were 32 transactions comprised of 50 buildings totaling $782.68 million in gross consideration. Compared to November 2011s 40 transactions comprised of 51 buildings totaling $250.15 million in gross consideration, Decembers figures reflect a 20% decrease in transaction volume, a slight 2% decrease in the number of buildings sold and a 213% increase in dollar volume. These figures also represent a steady 18% decrease in transaction volume, a 24% decrease in the number of buildings sold and a 65% increase in dollar volume compared to December 2010, which saw 40 transactions totaling $475 million in gross consideration. It must be noted, however, that five institutional transactions alone accounted for over $500 million in gross consideration, which is roughly two-thirds of Decembers dollar volume. Manhattan had the strongest dollar volume in December with $402.96 million in gross consideration trading but had only 8 buildings sell during the month, two of which accounted for over $300 million in gross consideration. The remaining buildings ranged from $9-36 million in price, so it is fair to say that transaction volume was relatively light. Brooklyn was the most active in terms of building sales with 10 transactions comprised of 21 buildings totaling $242 million in gross consideration. Institutional sales also took up a large portion of this activity as two transactions accounted for approximately 80% of this dollar volume. The Bronx had a stronger month than November with 9 transactions comprised of 13 buildings totaling $48.64 million in gross consideration. Northern Manhattan also had an active month with 5 transactions comprised of 5 buildings totaling $48.63 million in gross consideration. Queens had only 1 transaction, but it consisted of another large portfolio sale in Far Rockaway for $40 million. In addition to this recent activity, our company has recently seen tremendous demand for product in January. Since the beginning of the year, most multifamily properties are either getting contracts sent out or have been signed into hard contract. As more and more buyers are citing a lack of available product, it is worth noting that such scarcity could contribute to higher prices. Trailing 6-Month Sales Averages: For the six months ended in December (page 8), average monthly transaction volume stayed even at 35 transactions per month. The 6-month average monthly dollar volume rose to $460 million in December after a significant amount of institutional sales drove the number higher. Warmest Regards,

Shimon Shkury Investment Sales: Michael A. Tortorici Victor Sozio Jonathan Berman Scot Hirschfield Jesse Deutch Investment Research: Ivan Petrovic Aryeh Orlofsky Dwan Daniels Dusan Panic

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Multifamily Month In Review: New York City

Multifamily Market Performance By District Dec 11 | Nov 11 | Dec 10 | Comparison

Metrics
Manhattan Transaction Volume Building Volume Dollar Volume Total Units Transaction Volume Building Volume Dollar Volume Total Units Transaction Volume Building Volume Dollar Volume Total Units Transaction Volume Building Volume Dollar Volume Total Units Traded Transaction Volume Building Volume Dollar Volume Total Units Traded

Ariel Property Advisors

Dec 2011
7 8 $402,969,000 409 5 5 $48,629,093 300 9 13 $48,642,500 582 10 21 $242,444,122 1270 1 3 $40,000,000 328

% Change Dec-Nov11 -56% -67% 208% -11% 0% -17% 193% 142% 125% 225% 70% 74% -23% 50% 324% 357% -50% 0% 135% 128%

Nov 2011
16 24 $130,827,001 460 5 6 $16,625,000 124 4 4 $28,536,700 335 13 14 $57,171,073 278 2 3 $17,000,000 144

% Change Dec11-Dec10 0% 0% 59% -43% 67% 25% 154% 69% -55% -70% -71% -77% 100% 250% 1188% 336% -75% -25% 138% 105%

Dec 2010
7 8 $253,375,000 722 3 4 $19,116,177 178 20 44 $167,006,277 2,495 5 6 $18,819,567 291 4 4 $16,800,000 160

Transaction & Dollar Volume Graphs

Dollar Volume Comparison Graph

Manhattan Brooklyn N. Manhattan Queens The Bronx

Northern Manhattan

$400m $300m $200m

The Bronx

$100m $80m $60m $40m $20m

Brooklyn

Dec 11

Nov 11

Dec 10

Queens

Building Volume Comparison Graph

Manhattan Brooklyn N. Manhattan Queens The Bronx

44

25

All NYC

Transaction Volume Building Volume Dollar Volume Total Units

32 50 $782,684,715 2,889

-20% -2% 213% 115%

40 51 $250,159,774 1,341

-18% -24% 65% -25% Building Volume Comparison Graph

39 66 $475,117,021 3,846

20 15 10 5

Dollar Volume Comparison Graph Manhattan* Northern Manhattan 31% 5% 6% 6% Brooklyn

The Bronx 6% 16%

Queens

Dec 11

Nov 11

Dec 10

Transaction & Dollar Volume Graphs

*Manhattan sales figures are derived from properties that traded below 96th Street on the east side and below 110th Street on the west side

42%

10%

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Multifamily Month In Review: New York City

Ariel Property Advisors

Trailing Six Month Analysis Introduction

Trailing Six Month Analysis Methodology

Given the commercial real estate industrys cyclical nature and relatively small number of sample properties that trade in any month or quarter, Ariel Property Advisors developed the Trailing Six Month Analysis as a unique research tool for identifying multifamily sales trends in New York City. The Trailing Six Month Analysis includes charts for the most recent six month period that detail the average price per unit, average price per square foot, average cap rate, average gross rent multiplier, and total transactions and prices for multifamily properties in Manhattan (below 96th Street), Northern Manhattan (north of East 96th Street, east of Fifth Avenue, north of 110th Street and west of Fifth Avenue), The Bronx, Brooklyn, and Queens. Sales figures from neighborhoods that had transactions during the six month period also are highlighted. The multifamily transactions included in the analysis occurred at a minimum sales price of $1 million, with a minimum gross area of 5,000 square feet and with a minimum of 10 units. Public records were used to compile the report figures, which were reported by ACRIS and other sources deemed reliable.

Trailing Six Month Moving Averages: Jul 2011 - Dec 2011

Pricing Indicators
Location Manhattan (below 96th St.) Northern Manhattan Bronx Brooklyn Queens Avg. $ / Unit $473,706 $132,975 $83,448 $148,025 $145,992 Avg. $ / SF $526 $157 $95 $170 $168 Avg. Cap Rate 5.70% 6.89% 6.98% 6.47% 5.77% Avg. GRM 11.36 8.72 7.15 11.70 9.91

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Multifamily Month In Review: New York City

Trailing Six Month Performance: Jul - Dec | 2010 vs. 2011 Comparison

Ariel Property Advisors

2011 Six Month Trailing Numbers

Location Manhattan (below 96th St.) Northern Manhattan Bronx Brooklyn Queens Summary Total Transactions 83 29 47 70 14 243 Total Buildings Traded 116 38 72 87 17 330 Total Dollar Value Traded $2,038,946,913 $202,143,435 $264,714,418 $477,449,541 $103,401,800 $3,086,656,107 Median Price $8,475,000 $3,500,000 $3,325,000 $2,825,000 $2,950,000 $4,024,572 Total Units Traded 3,869 1,567 3,108 3,070 777 12,391 Median Units / Transaction 22 29 45 23 20 27

2010 Six Month Trailing Numbers

Total Transactions 47 27 70 43 23 210 Total Buildings Traded 50 35 96 44 23 248 Total Dollar Value Traded $618,705,679 $139,623,881 $431,618,333 $156,206,171 $613,788,932 $1,959,942,996 Median Price $4,250,000 $4,400,000 $3,549,738 $2,262,500 $2,700,000 $3,479,871 Total Units Traded 2,054 1,252 5,691 1,537 1,061 11,595 Median Units / Transaction 18 36 51 24 20 28

Transaction Summary

Pricing Distribution Transaction Volume

Location / Criteria Manhattan (below 96th St.) Northern Manhattan Bronx Brooklyn Queens

2011 Transaction Volume as a percentage of total volume $20mm & up 20% 10% 4% 6% 7% $5mm - $20mm 49% 21% 30% 20% 29% $1mm - $5mm 31% 69% 66% 74% 71%

2010 Transaction Volume as a percentage of total volume $20mm & up 13% 0% 6% 0% 3% $5mm - $20mm 41% 40% 22% 16% 38% $1mm - $5mm 46% 60% 72% 84% 59%

Pricing Distribution Dollar Volume

Location / Criteria Manhattan (below 96th St.) Northern Manhattan Bronx Brooklyn Queens

2011 Dollar Volume as a percentage of total volume $20mm & up 75% 49% 26% 51% 39% $5mm - $20mm 21% 22% 46% 23% 41% $1mm - $5mm 4% 29% 28% 26% 21%

2010 Dollar Volume as a percentage of total volume $20mm & up 62% 0% 35% 0% 17% $5mm - $20mm 28% 72% 34% 45% 58% $1mm - $5mm 11% 28% 31% 55% 25%

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Multifamily Month In Review: New York City

Ariel Property Advisors

Six Month Trailing Analysis Transaction & Dollar Volume

Legend: Transaction Volume Dollar Volume

Multifamily Transaction Timeline

Q3 2010 Q4 2010
2301 Kings Highway trades for $14.05mm, making it the largest Brooklyn multifamily to sell in 2010 | 114-30 East 104th St sells for 18.5mm making it the largest single 2010 Nothern Manhattan multifamily trade | 25-21 31st Ave. sells for $12.625mm, the largest Queens multifamily transaciton in 2010 | Bronx Multifamily portfolio restructured for $75.89mm

Month By Month Comparison: July 2010 - December 2011

Q1 2011
255-unit portfolio of Washington Heights & Bronx properties sells for $22.5mm | Vacant unsold condominium buildings sell at 1961-67 7th Avenue in NM for $19.5mm and 142-46 North 6th Street in Brooklyn for $15.25mm | Criterian sells The Astoria luxury rental building in LIC for $42.5mm | Touro College sells mixed-use building on W. 85th St. for $13mm

Q2 2011
Fosterlane Management Corp. acquires 265-unit UWS luxury apartment building for $140mm | 245-10 Grand Central Pkwy S sells for $57.75mm | Macklowe purchases $70mm Lenox Hill building | Cheshire Group buys Carnegie Hill rental building for $105mm

Q3 2011
UDR buys Rivergate complex in Kips Bay for $443mm | Macklowe buys 737 Park Ave for $253mm | Stone Street Properties acquire $90mm UES portfolio | Harbor Group takes control of $31mm distressed Vantage portfolio

Q4 2011
11-building Bronx portfolio fetches $47mm | Lionel Hampton Houses in Harlem trades for $32.5mm | 7 Harrison Street in Tribeca trades for $600psf | Avalon Bay purchases Brooklyn building for $23mm | Equity Group buys $76mm 113-unit luxury rental property (173 Kent Ave.) in Williamsburg | Privet Capital Sells Multifamily Portfolio for $123mm | Archstone pays $131mm for Kips Bay apartment building

Deals
$800mm $700mm $600mm $500mm $400mm $300mm $200mm $100mm

750 East 179th Street & 730 Oakland Pl. trade for $23.5mm, making it the largest Bronx transaction in 2010

120 105 90 75 60 45 30 15

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Q3 2010

Trans. Vol: 60 Dollar Vol: $381,559,679 U.S. Federal Reserve buying Government debt in effort to maintain low interest rates | Home sales at lowest level in 10 years

Q4 2010

Trans. Vol: 138 Dollar Vol: $988,998,316 Republicans take back House of Representatives and advance in Senate. Andrew Cuomo becomes governor of NY, Republicans rebalance state govt houses | White House announces bipartisan tax compromise extending all Bush tax cuts for 2 years, including the 15% capital gains tax

Q1 2011

Trans. Vol: 108 Dollar Vol: $541,178,531 Gross domestic product, was revised lower to an annual growth rate of 2.8% in the three months ending in December | NYS unemployment rate drops by 20 basis points, the largest decline since 2004

Q2 2011

Trans. Vol: 95 Dollar Vol: $1,030,062,515 U.S. housing prices declined again in the first three months of 2011 | Hiring slowed in May with only 54,000 jobs added | NYS economy adds 13,600 private sector jobs | New York State legislators reached a deal on rent laws | Foreclosure filings in NYS have dropped 85% since September | New York District economy expands, but at slower pace

Q3 2011

Trans. Vol: 124 Dollar Vol: $1,705,064,063 NYS Labor Department reported the state added 14,100 private sector jobs | Construction permits for new buildings, alterations & demolition increased by about 12% | 30-year bond declined 61 basis point from 3.51% to 2.9%

Q4 2011

Trans. Vol: 118 Dollar Vol: $1,365,452,392 Real GDP increases 2.5% | Mortgage rates hit record lows | Manhattan accounts for 80% of multifamily dollar volume in Q311 | U.S. unemployment rate falls to 9.0% | Conference Board report shows improving U.S. economy | Reports show real estate market improving nationwide

Economy

The Trailing 6-Month Moving Average

Legend: Transaction Volume

6 Months Ended 2010 Dec 2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Avg. Dollar Vol. $257,631,308 $261,864,472 $258,987,899 $260,263,626 $284,193,244 $245,060,615 $246,026,657 $325,460,447 $381,297,547 $416,195,948 $388,676,505 $404,863,984 $464,350,717

Avg. Transaction Vol. 34 35 34 38 37 35 30 32 32 33 32 35 35

December 2010 - December 2011

Dollar Volume

$450mm $400mm $350mm $300mm $250mm $200mm $150mm

$100mm

55 50 45 40 35 30 25
20

ec

Ju l A ug

Ja

Ju

Se

ov

ct

Fe

ec

2010

2011

Average monthly dollar volume and transaction count for given month and five months prior

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Midtown West

$2238

3030 2055 3024

4245 3075 3520

5305 3450 4566

3705 2545 3267

December Average

$1920

2634 2647 0%

3754 3724 1%

4935 4947 0%

3311 3315 0%

Morningside Heights $1600 Murray Hill $1956

November Average $1940 % Change -1%

Multifamily Month In Review: New York City

VACANCY SUMMARY: 12/11
SoHo/TriBeCa

Macro-Economic Overview Unemployment|Financing|Revenue|Expenses

NEIGHBORHOOD VACANCY RATE 1.50% 0.93% 1.30% 1.29% 1.49% NEIGHBORHOOD BPC / Financial Dist Chelsea Upper East Side East Village/LES
Unemployment:

VACANCY RATE 0.37% Ariel Property Advisors 1.17% 1.50% 0.84% 1.27%

Upper West Side West Village

Rental Market / Vacancy:

Gramercy Midtown East

December Overall Vacancy

As 2011 comes to a close and 2012 begins the New York State (NYS) Labor DepartMidtown West 1.60% ment reports an unemployment rate of 8% (seasonally adjusted) for December, unchanged from the November 2011 rate. On a positive note; the U.S. Bureau of Labor Murray Hill 1.00% Statistics reported an unemployment rate of 8.3% in January, the lowest rate since February 2009. Additionally, the economy created 243,000 jobs during the month of January and private-sector employment grew by 257,000 jobs. At the state level, unemployment levels have remained stagnant; however, New York City (NYC) levels have seen the first drop in months. The December unemployment rate for NYC OVERALL BLENDED AVERAGES: seasonally decreased to 8.8%, down 30 basis points from the November rate (not 12/11 adjusted).
Unemployment Rate History NYS (Seasonally Adjusted) & NYC (Not Seasonally Adjusted)

TheNovember Overall Vacancy rate for Manhattan was at 1.27% as December rental vacancy 1.16% reported by Citi Habitats. This is a leap upwards from the November rate of 1.16%. Overall the Manhattan vacancy0.11 trended upward rate Difference for the second half of 2011. Additionally, the rental rates have decreased by 1% for studios, increased by 1% for two bedrooms and mimicked November rates for both one and three bedrooms.
Manhattan Rental Vacancy Rates Monthly Percentage Change
2.50%

MANHATTAN RENTAL VACANCY RATES: 12/11

BLDG CLASSIFICATION

STUDIO $2883 $2526 $2179 $1908

1BR

2BR

3BR

New Development w/ DM*

3984 3611

5977 5301

12.5%

7968
1.25%

1.34

1.26

1.27 0.94 0.69 0.86 0.69

Jun July Aug Sept Oct Nov Dec 11

Doorman Elevator*** Walkup**

6930
10%

1.16

2984 8.8%4182 2561

8%

5313
7.5%

0%
Dec Jan Feb Mar Apr May

3501

4668

Source: Citi Habitats

* New Developments include all rental and condo buildings built after 2004. Expenses: **Walkup averages include brownstone and townhouse rentals. ***Elevator averages in the downtown neighborhoods include a significant number of loft rentals compared to other neighborhoods.

5%

2.5% 2003 2004 2005 2006 2007 2008 2009 2010

Source: NYS Dept Of Labor

2011

2012

2013

Financing: When the Federal Open Market Committee met in December 2011, the Federal Reserve voted to keep short-term rates near zero through late 2014. They also predicted marginal economic growth and job creation, as well as a bleak trajectory of growth for business-fixed investments and the housing sector. Overall, stress from the global financial markets is being felt in our economy and slow recovery is expected. The January 2012 treasury rates mirrored the drab mood of The Fed and exhibited ailing decreases from the December rates. The 30-year treasury yield was down 14 basis points from 3.12% in December to 2.98% in January. Additionally, the January 10-year note was down 4 basis points from the December rate of 2.11% to 1.97%. The 5-year note decreased from 0.97% in December to 0.89% in January. The 1-year T-bill was unchanged at 0.12%.
Treasury Yield Curve Rates 30-year | 10-year | 5-year | 1-year

The winter 2011/12 season has shown volatility in the fluctuation of expenses. The price of home heating oil dropped from November to December 2011 by 5.9 cents and then spiked back up 5.1 cents from December to January 2012. This leaves the price of No. 2 oil at 413.2 cents per gallon for January. Residential electricity rates for January decreased by 6 basis points to 14.9 cents per kilowatt hours (KWH) from the December rate of 15.5 cents per KWH.
Residential Electricity Rates Regional - Middle Atlantic (Cents / KWH)

20

17.5

15

12.5

6%

2007 2008

2009 2010 2011

10 2012 2013 Source: US EIA

Home Heating Oil Prices Monthly Average (cents per gallon)

4%

500 400

2%

300 200

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0%

2006 2007 2008 2009 2010 2011 2012 2013

100

Source: US Treasury Dept.

Source: NYSERDA

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1.18

0.99

1.00

1.08

1.18

Manhattan (below 96 th Street) Institutional sales played a dominant role in Manhattans December figures. Notable transactions include 814 Madison Avenue, an 11-story, 41-unit rental building that sold for $170 million to Vornado Realty Trust, representing over $1,600 per square foot. Downtown, the multifamily building at 73-75 East 3rd Street sold for $15.45 million, representing $321,000 per unit and $700 per square foot. Another interesting transaction was the sale of 1733 First Avenue, a 6-story elevatored building on the corner of East 90th Street. The propertys $9.825 million price translates to $364 per square foot.

Ariel Property Advisors

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2011 Notable Transactions:

NYC Sub-Market Overview: Manhattan (below 96 th St.)

1 2 3 4 5 6 7 8 9 10 11 12

Jan 2011 | $48mm | 101 West 87th Street | 95 Unit Columbus Park sold through forclosure Mar 2011 | $13mm | 521-27 Amsterdam Ave | Mixed-Use building owned by Touro College Apr 2011 | $139mm | 601 Amsterdam Ave | 265-unit luxury Sagamore apartment building Apr 2011 | $122.5mm | 286-92 3rd Ave | 32 story luxury rental Elektra acquired by Investco Jun 2011 | $105mm | 1327-1329 Lexington Avenue | Cheshire Group buys Carnegie Hill rental Jun 2011 | $70mm | 150 East 72nd Street | Macklowe purchases Lenox Hill building Jul 2011 | $443mm |606 First Avenue | UDR buys Rivergate complex in Kips Bay for $443 million Aug 2011 | $253mm |737 Park Avenue | Macklowe purchases 21-story building at East 71st Street Sep 2011 | $90mm |Icon Realty Portfolio | Stone Street Properties acquires 241 units from Icon Realty Mgmt Nov 2011 | $20mm |7 Harrison Street | Corner mixed-use loft building in TriBeCa trades for $600psf Dec 2011 | $131mm |377 East 33rd Street | Archstone buys apartment building in Kips Bay Dec 2011 | $170mm |814 Madison Avenue | Vornado purchases potential condo conversion buliding

Manhattan Jul-Dec 2011 By Property Type

Property Type Elevatored Building Total Dollar Value Traded $239,729,082 $1,369,961,787 $236,312,400 $192,943,644 $2,038,946,913 Total Transactions 9 42 25 7 83 Total Buildings Traded 10 51 31 24 116 Total Units Traded 551 2,075 680 563 3,869

Average $ / SF $443 $561 $512 $476 $526

Average $ / Unit $410,704 $541,799 $415,707 $353,294 $473,706

Mixed-Use Building Walk-Up Building Portfolio Total / Average

Manhattan Jul-Dec 2011 By Neighborhood

Location Alphabet City Total Dollar Value Traded $32,540,000 $160,344,454 $26,050,000 $25,181,644 $45,025,000 $23,624,603 $9,700,000 $5,450,000 $146,323,400 $574,653,000 $16,475,000 $50,170,000 $19,308,702 $43,604,082 $20,000,000 $717,022,028 $47,450,000 $17,225,000 $38,000,000 $4,025,000 $14,500,000 $2,275,000 $2,038,946,913 Total Transactions 3 4 2 5 5 3 1 1 11 2 2 4 2 4 1 21 6 2 1 1 1 1 83 Total Buildings Traded 4 6 2 8 7 4 1 1 13 2 4 7 2 4 1 35 8 2 1 2 1 1 116 Total Units Traded 107 325 34 121 156 50 10 67 338 919 52 88 37 145 49 1,043 110 52 105 19 32 10 3,869

Average $ / SF $442 $492 $476 $357 $510 $334 $527 $96 $657 $573 $438 $393 $537 $520 $599 $588 $645 $551 $463 $535 $384 $180 $526

Average $ / Unit $280,709 $302,161 $766,177 $208,483 $271,095 $551,019 $970,000 $81,343 $473,820 $623,133 $297,917 $702,632 $506,543 $342,912 $408,163 $618,033 $513,333 $330,804 $361,905 $211,842 $453,125 $227,500 $473,706

Chelsea Chinatown Clinton

East Village Fashion Flatiron

Gramercy Greenwich Village Kips Bay

10

Little Italy Lower East Side Midtown West

11

Murray Hill TriBeCa Upper East Side

12

Upper West Side SoHo Civic Center Midtown East Financial District

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Manhattan Valley Total / Average

Ariel Property Advisors

Northern Manhattan The $36 million sale of 107 East 130th Street to Preservation Development Partners was Upper Manhattans largest December trade. The property is slated for affordable housing preservation and accounts for most of the areas December dollar volume. Another notable sale took place in East Harlem at 147 East 118th Street. The mixed-use building, which contains a check cashing business on the ground floor, sold for $3.9 million, which translates to $229 per square foot.

NYC Sub-Market Overview: Northern Manhattan

2011 Notable Transactions:

1 2 3 4 5

Jan 2011 | $22.25mm | 10 building portfolio | 239 units and 25 stores Feb 2011 | $19.5mm | Lotta Condominiums - 159 West 118th Street | Acquired by Gaia Real Estate Mar 2011 | $14mm | 192-206 Dyckman Street | Parkoff Org. buys three adjacent mixed-use buildings Jun 2011 | $7.1mm | 500 Ft. Washington St. | 44,295 SF, 56 apartments & 1 retail unit, $161 PSF Jul 2011 | $31.32mm | Esquire Portfolio | Harbor Group International & Jadam Equities acquire 4 rent regulated buildings in Hamilton Heights containing 214 units 6 Sep 2011 | $6mm | 666 West 162nd Street | Gatsby Enterprises sells 49 apartments; $120k/unit 7 Oct 2011 | $31.5mm | Lionel Hampton Houses | Schron sells former Mitchell-Lama Harlem complex for $31.5mm 8 Dec 2011 | $36mm | 107 East 130th Street | Preservation Development Partners buys 179-unit Harlem complex

N. Manhattan Jul-Dec 2011 By Property Type

Property Type Elevatored Building Mixed-Use Building Walk-Up Building Portfolio Total / Average Total Dollar Value Traded $63,033,000 $25,154,093 $27,665,000 $86,291,342 $202,143,435 Total Transactions 6 9 9 5 29 Total Buildings Traded 7 9 9 13 38 Total Units Traded 379 197 239 752 1,567 Average $ / SF $146 $176 $154 $138 $157

Average $ / Unit $144,781 $130,454 $129,357 $129,859 $132,975

N. Manhattan Jul-Dec 2011 By Neighborhood

Location Central Harlem East Harlem Hamilton Heights Washington Heights West Harlem Inwood Total / Average Total Dollar Value Traded $84,039,093 $14,768,000 $52,596,342 $36,490,000 $8,350,000 $5,900,000 $202,143,435 Total Transactions 7 6 4 8 2 2 29 Total Buildings Traded 9 6 9 10 2 2 38 Total Units Traded 659 112 353 299 69 75 1,567 Average $ / SF $164 $191 $156 $128 $184 $114 $157

Average $ / Unit $142,948 $140,328 $152,895 $126,120 $120,756 $75,811 $132,975

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The Bronx Bronx sales improved in December after a drop in November. For the month, there were 9 transactions comprised of 13 buildings totaling $48.64 million in gross consideration. The largest transaction that took place was a 4-property portfolio in Pelham Bay that sold for $16.265 million. The sale represents $77 per square foot and $91,000 per unit. Another notable sale was 2304 Sedgwick Avenue, a 63-unit building in Kingsbridge Heights that sold for $6.75 million, translating to $98 per square foot and $107,000 per unit. 2011 Notable Transactions:

Ariel Property Advisors

NYC Sub-Market Overview: The Bronx 1

1 2 3 4 5 6 7 8 9

Jan 2011 | $6mm | 1135 Boynton Ave | Six story elevatored building trades for 6.7 GRM Jan 2011 | $5.55mm | 1104 Carrol Street | Five story walk-up building trades for 7.6 GRM Feb 2011 | $28.5mm | 2160, 2180 & 2181 Wallace & 2181 Barnes Ave | 276 Units trades for 8.61 GRM Apr 2011 | $27.75mm | Milbank Portfolio | 10 building portfolio acquired by Finkelstein Timberger LLC Apr 2011 | $4.65mm | 1901 Grand Street | Six story elevator building with 57 Units Jun 2011 | $15.5mm | Three apartment buildings; 175 units total; $15.5mm Sep 2011 | $15.3mm | 750 Pelham Parkway S | 139 units total; $15.3mm Oct 2011 | $46.8mm | Sheridan Avenue Portfolio | 11-building Bronx portfolio fetches $47M Oct 2011 | $21.15mm | Carpenter Avenue Portfolio | 5 Building Williamsbridge portfolio trades for 7.5 GRM

Bronx Jul-Dec 2011 By Property Type

Property Type

Total Dollar Value Traded $72,937,500 $111,041,700 $67,485,218 $13,250,000 $264,714,418

Total Transactions 11 14 21 1 47

Total Buildings Traded 14 29 25 4 72

Total Units Traded 821 1,253 854 180 3,108

Average $ / SF $84 $98 $99 $67 $95

Average $ / Unit $83,932 $92,040 $77,935 $73,611 $83,448

Elevatored Building Mixed-Use Building Walk-Up Building

Portfolio Total / Average

Bronx Jul-Dec 2011 By Neighborhood

Location Bathgate Bedford Park Total Dollar Value Traded $1,149,605 $31,202,200 $2,440,000 $2,677,111 $7,998,031 $12,000,000 $54,602,000 $15,320,471 $13,650,000 $5,070,000 $7,600,000 $16,035,000 $17,520,000 $33,100,000 $15,300,000 $1,050,000 $2,000,000 $3,400,000 $1,435,000 $16,265,000 $1,050,000 $3,850,000 $264,714,418 Total Transactions 1 6 2 1 5 3 3 3 3 2 2 3 2 3 1 1 1 1 1 1 1 1 47 Total Buildings Traded 1 6 2 1 5 3 13 3 3 2 6 4 5 7 1 1 1 1 1 4 1 1 72 15 380 31 32 110 151 636 146 149 50 132 171 239 391 139 12 23 45 17 178 12 49

Total Units Traded

Average $ / SF $75 $80 $111 $100 $102 $92 $80 $98 $80 $121 $71 $88 $80 $89 $92 $168 $113 $84 $114 $77 $187 $104 $95

Average $ / Unit $76,640 $80,293 $79,580 $83,660 $73,928 $77,273 $77,465 $99,530 $89,272 $107,477 $56,498 $97,042 $72,992 $84,532 $110,072 $87,500 $86,957 $75,556 $84,412 $91,376 $87,500 $78,571 $83,448

Belmont Castle Hill East Tremont Fordham

Highbridge Kingsbridge Kingsbridge Heights Melrose

Morrisania Mount Hope Soundview Williamsbridge

Pelham Parkway Riverdale Mott Haven Westchester Square Bronxdale Pelham Bay Schuylerville Wakefield

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Total / Average

3,108

Brooklyn Brooklyn multifamily sales had a very big December. For the month, there were 10 sales comprised of 21 buildings totaling over $242 million in gross consideration. Two sales took up the majority of this activity. The first was a 11-building, 820-unit portfolio that sold in the Brighton Beach and Flatbush neighorhoods for $123 million. This represented approximately $149,000 per unit and $140 per square foot. The second major sale was that of 173 Kent Avenue, a luxury rental building purchased by Sam Zell for $76 million. The transaction represented $458 per square foot and $672,000 per unit. The Watchtower sold a prime Brooklyn Heights building at 50 Orange Street for $7.1 million, which represents $564 per square foot and $355,000 per unit. 2011 Notable Transactions:

Ariel Property Advisors

1 2 3 4 5 6 7 8

Jan 2011 | $8.5mm| 1707,10,16,22 Caton Avenue | Two contiguous buildings sell for 8.95 GRM Apr 2011 | $18.45mm| Praedium 6 building portfolio | 244 unit portfolio acquired by Tidy Realty May 2011 | $10mm| 8 building portfolio | Atlantic Gardens buildings sold by Atlantic Assets Group Jun 2011 | $51mm | Three 7-story apartment buildings; 352 units total; GRM of 11 Sep 2011 | $6.1mm | 245 Hawthorne Street | Epsilon Holdings purchased 78 units Oct 2011 | $22.1mm | 3101-115 Avenue | The Parkoff Organization bought 2 multifamily properties (154 units) Nov 2011 | $23mm | 100 Willoughby Street | Avalon Bay purchases corner mixed-use building from Al Laboz Dec 2011 | $123mm | Privet Brooklyn Portfolio| Rizaro Management buys 820-unit Brooklyn portfolio

NYC Sub-Market Overview: Brooklyn 1

Brooklyn Jul-Dec 2011 By Property Type

Property Type Elevatored Building Mixed-Use Building Walk-Up Building Portfolio Total / Average Total Dollar Value Traded $110,078,600 $140,210,341 $92,718,264 $134,442,336 $477,449,541 Total Transactions 15 17 32 6 70 Total Buildings Traded 16 17 34 20 87 Total Units Traded 863 443 806 958 3,070

Average $ / SF $150 $233 $156 $113 $170

Average $ / Unit $157,172 $208,030 $120,266 $103,196 $148,025

Brooklyn Jul-Dec 2011 By Neighborhood

Location Bedford-Stuyvesant Bensonhurst Boerum Hill Borough Park Brighton Beach Bushwick Crown Heights Crown Heights South East Flatbush Flatbush Ocean Parkway Park Slope Prospect Lefferts Garden Red Hook Sheepshead Bay Sunset Park Williamsburg Midwood East New York Greenpoint Prospect Heights Bay Ridge Brooklyn Heights Downtown Bath Beach Canarsie Total / Average Total Dollar Value Traded $5,750,000 $4,375,000 $6,700,000 $4,860,000 $130,500,000 $4,092,000 $20,759,460 $12,450,000 $4,444,751 $55,572,050 $1,750,000 $8,765,000 $8,950,000 $1,500,000 $10,544,635 $1,340,000 $106,275,000 $18,680,572 $6,777,732 $4,443,000 $1,675,000 $7,500,000 $17,856,000 $24,039,341 $2,250,000 $5,600,000 $477,449,541 Total Transactions 4 2 2 2 3 3 9 2 2 9 1 3 2 1 2 1 6 3 3 2 1 1 2 2 1 1 70 Total Buildings Traded 5 2 2 2 13 4 9 2 2 11 1 4 2 2 2 1 7 3 3 2 1 1 2 2 1 1 87 Total Units Traded 65 38 35 39 875 58 214 122 66 480 21 39 111 16 142 10 246 142 105 31 18 46 54 39 20 38 3,070

Average $ / SF $109 $129 $328 $159 $162 $97 $129 $141 $93 $117 $100 $317 $101 $139 $71 $116 $244 $139 $87 $175 $239 $172 $476 $452 $174 $169 $170

Average $ / Unit $89,442 $117,287 $203,000 $127,269 $142,934 $76,135 $100,549 $102,694 $71,478 $103,475 $83,333 $236,907 $82,285 $93,750 $73,904 $134,000 $324,644 $127,131 $64,386 $142,125 $93,056 $163,043 $335,677 $469,479 $112,500 $147,368 $148,025

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Ariel Property Advisors

Queens Queens had a slow month in December with only one multifamily sale. The transaction was a 3-building portfolio in Far Rockaway that consisted of 311,000 square feet and 328 units. Its $40 million price tag represented $128 per square foot at $121,000 per unit.

2011 Notable Transactions:

NYC Sub-Market Overview: Queens 1

1 2 3 4 5 6

Feb 2011 | $13.4mm| 89-07 34th Avenue | Whitestone Realty sells 132 unit elevator building Mar 2011 | $19.525mm| 82-67 Austin Street | 144 unit blockfront trades for $144psf Mar 2011 | $42.5mm| 26-36 27th Ave | Criterion Dev. Group sells 14 story apartment tower May 2011 | $57.75mm | 245-10 Grand Central Pkwy S | 240 unit elevatored building trades for $219psf Aug 2011 | $14mm | 96-02 - 96-10 37th Ave. | 9 retail, 1 office & 76 residential units @ $163k per unit Nov 2011 | $12mm | 34-20 30th Street | 84-unit elevatored building in Astoria trades for $149k per unit

Queens Jul-Dec 2011 By Property Type

Property Type Elevatored Building Mixed Use Building Walk-Up Building Total Dollar Value Traded $31,950,000 $14,000,000 $12,451,800 $45,000,000 $103,401,800 Total Transactions 5 1 6 2 14 Total Buildings Traded 5 1 6 5 17 Total Units Traded 197 88 104 388 777

Average $ / SF $175 $176 $173 $133 $168

Average $ / Unit $188,493 $159,091 $122,842 $102,642 $145,992

Portfolio Grand Total

Queens Jul-Dec 2011 By Neighborhood

Location Astoria Briarwood Total Dollar Value Traded $30,001,800 $2,700,000 $14,000,000 $1,510,000 $2,300,000 $6,540,000 $3,350,000 $3,000,000 $40,000,000 $103,401,800 Total Transactions 5 1 1 1 1 2 1 1 1 14 Total Buildings Traded 5 1 1 1 1 3 1 1 3 17 171 11 88 22 16 76 17 48 328 777

Total Units Traded

Average $ / SF $233 $143 $176 $58 $175 $122 $180 $85 $128 $168

Average $ / Unit $173,173 $245,455 $159,091 $68,636 $143,750 $89,792 $197,059 $62,500 $121,951 $145,992

Corona Hollis

Jackson Heights Jamaica Rego Park Rockaway Park Far Rockaway Grand Total

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Ariel Property Advisors - Investment Sales | Investment Research Ariel Property Advisors is a New York City investment property sales firm founded by Shimon Shkury. Since 2002, Mr. Shkury and his team have advised private clients, institutions, operators, equity providers and lenders on pricing, positioning, and selling of assets throughout New York City. Together they have sold close to $1 billion in transactions and have provided valuation services to clients on more than 2,800 properties totaling over $12 billion. From multifamily portfolios to office buildings or vacant lots to warehouses, the team has dealt with nearly every different kind of asset class and transaction size. Their discipline has allowed them to develop a vast network of relationships with investors, developers, institutions, brokers and other market participants throughout the region. Our Approach People and relationships are at the heart of every real estate transaction. Our team is committed to providing unmatched value for our clients by combining top-notch, relationship-driven investment sales professionals with cutting edge technology and research support. When marketing the firms Exclusive Listings, our investment sales professionals are in contact with real estate owners, investors, lenders, brokers and other market participants on a daily basis. By fostering these relationships, our professionals develop an intimate knowledge of recent transactions, market trends, the financing environment and the most active market participants. This knowledge gives our platform and clients unparalleled access to real-time market information. Our investment research professionals are responsible for providing our company with a comprehensive sales support operation by fulfilling two essential roles. First, they provide our sales force and clients with informative marketing materials and research reports that are produced with all of the information gathered by our investment sales professionals. Second, they work with our companys proprietary Customer Relations Management system which is powered by Salesforce.com. Customized to meet the specific needs of our operation, this system is powerful tool that greatly enhances the performance of our professionals. Customized Database Platform with Salesforce Technology Ariel Property Advisors relies on a customized central data system that was developed with cloud technology from the popular Customer Relations Management (CRM) provider, Salesforce.com. During the last several years, our investment research professionals have integrated Salesforce technology into all parts of our operation. This integration specifically addressed two primary functions. First, the technology has provided us with an efficient and effective way of collaborating and communicating with clients via the web. Second, the system allows us to centrally track and store any piece of information that is directly or indirectly related to commercial real estate. This technology gives all of our professionals the unique ability to access and act on vital information anytime, anywhere. Asset Evaluation Whether you are an owner considering selling your building or you want to know the current market value of your property, we are available to provide you with a complimentary Asset Evaluation. Produced by the joint efforts of our investment sales and investment research teams, an Asset Evaluation will provide you with a thorough analysis of your investment property. Combining comprehensive financial analyses with real time market data, our Asset Evaluation will help you both establish the current market value of the asset and identify the primary value drivers affecting the price. Our team will not only review todays pricing environment but also explore every possible opportunity that could result in maximizing the assets value, be it today or in the future. Such opportunities can include, but are not limited to, the sale, joint venture, refinancing, or repositioning of an asset. Contact us at 212.544.9500 to request a complimentary Asset Evaluation

Ariel Property Advisors

Multifamily Month In Review: New York City | Contact Us

Contact Info

To learn more about current market conditions or if you would like a comprehensive Asset Evaluation for your property, please do not hesitate to contact us using the information below:

phone: 212.544.9500
Shimon Shkury ext. 11 sshkury@arielpa.com Victor Sozio ext. 12 vsozio@arielpa.com Michael A. Tortorici ext. 13 mtortorici@arielpa.com Jonathan Berman ext. 20 jberman@arielpa.com Scot Hirschfield ext. 16 shirschfield@arielpa.com Jesse Deutch ext. 18 jdeutch@arielpa.com Research Team Ivan Petrovic Aryeh Orlofsky Dwan Daniels Dusan Panic

If you would like to use or quote this report on the web, we ask that you quote the source as Multifamily Trail: New York City by Ariel Property Advisors and link report from our website page (http://arielpa.com/research/reports/)
The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee the accuracy of any information provided herein. As an example, all zoning information, buildable footage estimates and indicated uses must be independently verified. Vacancy factors used herein are an arbitrary percentage used only as an example, and does not necessarily relate to actual vacancy, if any. The value of this prospective investment is dependent upon these estimates and assumptions made above, as well as the investment income, the tax bracket, and other factors which your tax advisor and/or legal counsel should evaluate. The prospective buyer should carefully verify each item of income, and all other information contained herein.

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