Manhattan apartment sales activity is up, but the median sales price was down 10.1% year-over-year in Q409, according to a residential market report. The residential market results come as a number of real estate investment trusts (REITs) are in the process of raising capital to take advantage of the commercial opportunities in the Manhattan market. The Prudential Douglas Elliman Manhattan market overview put the number of residential sales in Manhattan at 2,473 in Q409, up 8.4% from 2,282 in Q408 and up 10.9% from 2,230 in Q309. But the median price was $810,000 in Q409, down 10% from $900,000 in Q408 and down 4.7% from $850,000 in Q309. The average sales price was $1,296,156, down 12.7% from $1,485,102 in Q408 and down 2.1% from $1,323,462 in Q309. “Improvement in the national economy, rising stock market and mortgage rates at historic lows have all played a role in the improvement of the Manhattan housing market second half of 2009,” said Jonathan Miller, president and CEO of Miller Samuel, the appraisal and consulting services firm that prepared the report. Listing inventory declined, but properties stayed on the market longer. There were 6,851 units listed during the quarter, down 24.6% from 9,081 units in Q408 and down 18.3% from 8,389 units in Q308. The average days on market was 204, up from 159 a year ago. Units located in housing cooperatives accounted for 51.1% of all apartment sales and 44.8% of all listings this quarter. The median sales price of a co-op in Q409 was $630,000, down 6.7% from $675,000 in Q408. Sales activity was up 28.3% year-over-year, with 1,264 units being sold, up from 985 sales in Q409. Condominium sales activity declined 6.8% to 1,209 units sold, from 1,297 units in Q409. The median sales price for a condo was $995,000 in Q409, down 11.2% from Q408’s median of $1,120,075. “This quarter we saw 10.9% more sales than the prior quarter and the real estate market was very active for a time of year where sales generally decline due to the holiday season,” said Dottie Herman, president and CEO of New York City-based real estate brokerage Prudential Douglas Elliman. “We believe that improved economic conditions and a strong belief in New York City all played a role in improving our housing market,” Herman added. Among those believing Manhattan is ripe for rebound is the Manhattan-based American Realty Capital New York Recovery REIT, which according to a prospectus filed with the Securities and Exchange Commission (SEC), hopes to raise as much as $1.7bn in a common stock offering to invest in office and retail properties in New York City. American Realty Capital is one of six REITs looking to raise a combined $4bn to invest in the commercial real estate Big Apple and other metro markets. Terreno Realty Corp. looks to raise $345m to invest in industrial real estate, including warehouse and distribution properties in New York and other US coastal cities. Hines Real Estate Investments is looking to raise $750m, Callahan Capital Properties wants to raise $500m and Piedmont Office Realty Trust is looking to raise $345m, all to invest in Class A office properties. Pyramid Hotels & Resorts announced plans to raise $275m to invest in brand name hotel chain locations in large urban areas like New York City, among others. The influx of new REIT investment couldn’t come at a better time. According to media reports, the New York-New Jersey Port Authority is looking for private capital to invest in the construction of One World Trade Center, the multi-billion-dollar project to resurrect one of the two Manhattan skyscrapers destroyed during the Sept. 11, 2001 terrorist attacks. Among many challenges facing the commercial sector is the threat of a continued increase in commercial mortgage-backed securitization (CMBS) delinquencies. As HousingWire previously reported, the industry continues to watch for the potential default of the $3bn specialty-serviced commercial mortgage secured by Manhattan’s Peter Cooper Village/ Stuyvesant Town mixed-use development. Write to Austin Kilgore.