Prices per square foot of all three types of apartment buildings in Queens posted solid increases in the second half of 2007, according to the latest figures from the second half of 2007 in the Massey Knakal Realty Services New York City Income Property Report. The total number of apartment buildings sold, however, declined.

The price per square foot of Queens mixed-use buildings (typically apartment buildings with retail or commercial on the lower floors) reached a new high of $310 per square foot in the second half of 2007, an 11.1-percent jump from the first half of the year and up 8.4 percent from the second half of 2006. While the price per square foot of elevator buildings was up as well, such a small number of buildings were sold that it does not accurately reflect market conditions. Queens walkup buildings were up by a more modest 4.2 percent compared to the first half of 2007 and declined slightly, by 1.3 percent, since the second half of 2006.

With the exception of an 8.3-percent increase in the number of mixed-use buildings sold in the second half of 2007 as compared to the same period in 2006, the number of Queens apartment buildings sold was down. Borough-wide for all three building categories, 352 buildings were sold in the second half of 2007, down 4.2 percent from the first half of the year and down 3.9 percent from the second half of 2006. Only 11 elevator buildings were sold in Queens in the last half of 2007, a 26.7-percent drop from the first half of the year and a 60.7 percent decline from the second half of 2006.

The number of walk-ups sold dropped to 225 in the last half of 2007, down 24 percent from the first half of the year and down 29.2 percent as compared to the second half of 2006.

"The lower volume level is not necessarily attributable to decreased demand," Massey Knakal Chairman Robert Knakal said. "Demand is there, but buyers and sellers are engaged in a psychological battle- some buyers are being cautious and taking a wait and see attitude while sellers are reluctant to lower prices. Time will tell who flinches first.

"The majority of the transactions used for the report closed after the onset of the credit crunch and are, thus, reflective of our new world," added Knakal. "While lenders, in general, have tightened requirements, portfolio lenders are aggressively pumping money into the market, primarily on assets in our niche, which is helping to stabilize value."

Citywide (excluding Staten Island, which is not tracked by the report), prices per square foot of all classes of apartment buildings in the last half of 2007 were up slightly to $234- that's a four-percent increase from the same period a year earlier and a 1.3-percent uptick from the first half of the year. The number of buildings sold citywide in the last half of 2007 was down 16.9 percent as compared to the first half of the year and down 6.9 percent from the second half of 2006.

The Massey Knakal New York City Income Market Report, prepared by appraisal firm Miller Cicero, LLC, is the only report of its kind and is a vital tool in gaining understanding of nuances in the complex investment market. The report examines various market indicators by property type in five markets: Manhattan, Northern Manhattan, The Bronx, Queens and Brooklyn.

Median price per square foot and the number of sales were based on all closed sales in the public record over $500,000, as reported by Property Shark (www.propertyshark.com). Cap rates and Gross Income Multipliers were based on sales researched by Miller Cicero, LLC in addition to properties sold by Massey Knakal Realty Services, and represent a reasonable sampling of all sales.

Massey Knakal Realty Services is a full-service property sales company specializing in the sale of investment and user properties. The firm was founded in 1988 by Paul J. Massey, Jr. and Robert A. Knakal, two former Coldwell Banker Commercial (now CBRE) executives. The duo ran the property sales division of Coldwell for four years before leaving to form their own company.