Early indications show 2006 shaping up to be another record year for investment sales of residential rental buildings in the city. Due to limited supply and investor demand for properties to convert into condominiums, investors are briskly buying residential buildings.

The director at Eastern Consolidated Properties, Alan Miller, said, “The market thus far in 2006 is still performing at unprecedented levels in every asset class in Manhattan. The inexplicable velocity of the investment sales market in NYC for transactions during the first quarter and now into the second quarter has the investment sales market on pace to shatter the record breaking volume of 2005.”

Brack Capital Real Estate, a subsidiary of an Israeli venture capital firm, is converting the 16-story former Olcott Hotel at 27 W. 72nd St. near Central Park West. Brack and Marathon Real Estate are converting the classic pre-war residential apartment building at 230 Riverside Drive. Last month, a partnership between Brack and Westbrook Partners purchased the 293,000-square-foot, 324-unit rental apartment building at 240 E. 27th St. and Second Avenue. The building has 7,000 square feet of retail space, which is leased to Duane Reade, and a 200-space public parking garage. According to the trade, the partnership paid about $158 million for the property.

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Last week, one of the nation’s largest apartment real estate investment trusts, Archstone-Smith, paid $165 million to Glenwood Management for the 34-story apartment building, the Marlborough House, built in 1975 at 245 E. 40th St. and Second Avenue. The building has 270 rental apartments, of which 15% are rent stabilized and 85% free market. The property has an underground parking garage and about 30,000 square feet of commercial space. Also last week, Archstone purchased the 33-story, 186-unit Brooklyn Heights rental building at 180 Montague St. that was built in 2000. It paid $101 million to the principal of the Continuum Company, Ian Bruce Eichner. In January, Archstone paid $348.9 million to Jack Resnick & Sons for the 550-unit, 80/20 rental building, the Gershwin, at Eighth Avenue and 50th Street.

Last month, a joint venture of Apollo Real Estate Advisors and Vantage Properties paid $175 million to Axelrod Management, the principals of Delano Village. Delano Village, which has been renamed Savoy Park, is on an entire city block along Lenox Avenue, the former site of the Savoy Ballroom. The property includes 1,800 rental apartments within seven buildings: 15 and 45 W. 139th St.; 30 W. 141st St.; 60 W. 142nd St.; 2300 Fifth Ave., and 620 and 630 Lenox Ave. A partner at Apollo, James Simmons, said, “Apollo continues to be a believer in the overall strength of the New York City metropolitan market and views rental assets in improving neighborhoods as unique opportunities to create value and provide much-needed quality housing.”

The chairman of Massey Knakal Realty Services, Robert Knakal, said, “The conversion market is seeing tangible reduction in the value of about 5% from its peak; however, we are still well above the value one year ago. Elevatored multifamily properties with a high percentage of rent-regulated units, which are not conversion candidates, are the most highly sought-after type in the market today.”

Massey Knakal has been responsible for the sale of a number of residential properties this year. They include two multifamily apartment buildings, at 780 Greenwich St. and 330 E. 63rd St., for a total of $55 million. Massey represented the Krischer and Goldstein families in the $46 million sale of a portfolio of six apartment buildings in Brighton Beach and Flatbush to two investors, Rush Sturges and David King. The buildings are six stories tall and together have 405 residential units.

In January, Massey sold a 12-story residential loft building at 56 Canal St., on the southwest corner of Canal and Orchard Street, for $25 million. The building was purchased by an investor who plans convert the building into a condominium. On the Upper West Side, Massey Knakal sold a 12-story rental building at 120 W. 86th St. It contains 47 residential units, 51,072 square feet of space, and about 13,028 square feet of air rights. It was sold for $28 million to an investor, Jane Goldman. The seller, a prominent local investor and owner of residential rental apartment buildings, had purchased the building about 16 months ago for about $16 million.

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One of the most elegant apartment buildings along Central Park West is the 13-story Langham at 135 Central Park West and 73rd Street. Original tenants in the 1907 building included Irving Bloomingdale, whose father founded Bloomingdale’s department store, and Isadore Saks, who founded Saks & Company. Certain apartments in 1907 rented for $500 a month. The building has been owned by the Manocherian family since 1952. Later this month, a winning bidder is expected to be announced. When the building was announced to be sold, trade sources believe the owners were seeking close to $10 million per apartment, or about $600 million total.

Later this year, industry leaders expect investor Lloyd Goldman to find a buyer for his 32-story, 261-unit rental apartment building, the Camargue, at 303 E. 83rd St., on the northeast corner of Second Avenue. The building includes 6,200 square feet of retail space and a 150-space parking garage. The building was developed in 1979 by H.J. Kalikow Organization, which sold it to Goldman in 1994 for $34 million. Trade sources expect the property to fetch as much as $190 million.

A number of prime residential rental buildings are being marketed for sale. They include two buildings, at 10 W. 74th St. and 150 W. 82nd St., that combined have 139 units. It is owned by Mann Realty, which is marketing it for about $88 million. On the East Side, across from the United Nations, Samson Management is seeking a price of about $50 million for 865 U.N. Plaza, a building which has 81 residential units, of which 54 are free market, and three retail stores. On the Upper West Side, a local investor has recently entered a contract to sell a building at 134 W. 93rd St. for $17.1 million.

Another local investor has signed a contract to purchase a 1960s residential rental apartment building at 211 E. 51st St. for $40 million, The New York Sun has been told. The building has about 99 residential apartments, all of which are vacant. The purchaser plans to renovate the building, including the construction of additional units on the floor and the conversion of the property into residential condominiums.

Rising interest rates, higher fuel costs, and a slight slowdown in the condominium sales market has not reduced the number of sales of prime residential rental buildings in the city. The president of the City Investment Fund, Thomas Lydon, said, “Buyers have many more choices; however, there is a softening as the supply of condominiums increased in the first quarter. If job creation and economic growth continues at current levels, prices should not need to be reduced to absorb a reasonable pace.”

Mr. Stoler is a television broadcaster and senior vice president at First American Title Insurance Company of New York. He can be reached atmstoler@firstamny.com.