According to Ariel Property Advisors’ (APA) most recent quarterly report on New York City, Manhattan drove apartment sales during the quarter, according to Multi-Housing News.

The city saw 147 transactions worth $1.6 billion. Of that amount, $1.35 billion was spent on the 44 purchases in Manhattan. APA president Shimon Shkury attributed the Manhattan focus to investor desire for certainty. Overall, the city's quarterly transaction total significantly exceeded the second quarter's figure, $1 billion spent on 88 transactions.

The desire for security has reportedly drawn foreign investment to the city as a whole, and Manhattan in particular has become appealing due to vacancy rates between 2.5 and 4 percent. Rents in the city have grown about 20 percent in the past 18 months and actually reached or exceeded 2007 levels in some cases. Pricing has not followed suit, thus creating an opportunity for investors.

"We’ve seen that in 2011 the institutional capital is back in the market in a bigger way, and the result of that is much larger transactions that take place at lower yields and cap rates," Shkury told the source.

He predicted more aggressive lending by banks could push values up and help drive beneficial new construction to meet the demand for rentals.