What is driving people to buy real estate? A few of the possible reasons: capital appreciation, cash flow, return on investment, generation and estate planning, and deferral of payment of federal taxes. Whatever the reasons, investors have contributed to a record volume of real estate sales in New York in 2005.

Next month, Hudson Waterfront Associates, which is owned by investors from Hong Kong, is expected to close on a sale, along with Donald Trump as a limited partner, of three residential rental apartment buildings. Together, they contain 1,325 apartments, 40,000 square feet of retail space, and 14.3 acres of underdeveloped land between West 59th and 65th streets on the West Side rail yard. A joint venture of the Washington-based Carlyle Group and Extell Investment is paying about $1.76 billion for it. The new owners have entered a contract to sell the three residential buildings and retail space to Equity Residential for $816 million, or $615,850 a residential unit.

Last week, Hudson Waterfront, in this case, was the buyer in another deal – for the 52-story, 1.8 million-square foot Bank of America tower complex in San Francisco. It will be paying about $1.05 billion and buying it as a 1031 exchange. That will allow the firm to defer the payment of federal income taxes. Next month, David Werner, one of the most active real estate investors and one of the sellers of the Bank of America building, together with C &K Properties and others, will close on a purchase of the 410-unit residential rental building, River terrace, at 72nd Street and the East River. The partnership plans to convert the property into residential condominiums and will pay about $363 million, or $885,365 a unit to the Macklowe Organization.

Last week, the Macklowe Organization sold a retail site at 250 E. 60th St., directly adjacent to the Roosevelt Island tram off Second Avenue, to a developer who plans to build a 10-story residential tower with affordable housing.

Earlier this week, a corporation sponsored by Stonehenge Partners, headed by Ofer Yardeni and Joel Seiden, and a consortium of investors including CDP-Capital closed on the purchase of four residential rental apartment buildings, collectively called the Platinum Portfolio. They are at 20 Park Ave., 41 Park Ave., 10 Downing St., and 167 E. 82nd St. The portfolio includes about 375,000 square feet of space and 371 residential units, 20 office spaces, and two retail stores. The entity paid about $170 million, and financing was provided by North Fork Bank. This was the third major purchase by Stonehenge this year. Earlier, they paid $240 million for 333 units at 304-324 W. 34th St. And in June, Stonehenge paid $100 million for the 314-unit Stonehenge Village at 120-160 W. 97th St.

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In 1955, Rudin Management built the 236,000-square-foot residential rental building at 30 Park Ave. Earlier this month, a partnership of BlackRock Realty and Calpers paid $97 million, or $407,563 a unit, for the 238-unit rental building, which will likely be converted into residential condominiums.

Earlier this month, the General Investment & Development Companies and the Oregon public employee pension fund sold the residential rental apartment buildings at 1430 and 1438 Third Ave. to Raymond Chalme’s Broad Street Partners for $85 million. At 1438, the 31-story tower has 147 residential rental units and 14,000 square feet of ground-floor retail space. The new owner plans to convert the property into a residential condominium building with 87 units. According to industry sources, the six-story building at 1430 Third Ave. will remain a rental. Broad Street secured a $105.1 million loan for the acquisition and conversion condominiums, Globest.com reported. This represented the second transaction this year between the pension fund and Broad Street Partners, which earlier this year paid $54.3 million for the 140-unit residential rental with 10,000 square feet of retail space at 184 Thompson St. Next month, the pension plan will be selling an office building that was converted about 25 years ago into a residential rental building at 254 Park Avenue South. A group of prominent local investors are paying about $62 million for the property. The group plans to renovate it and convert it into residential condominiums.

Last month, John Buck Company sold River East, a 32-story tower with 196 residential rental units and 4,325 square feet of retail space, at 400 E. 92nd St. and First Avenue. The building was finished in June. Financing was provided by the New York City Housing Development Agency under the 80/20 program, which provides for 20% of the units to be rented to individuals earning less than 60% of the area’s median income. The property was purchased by UBS Realty Investors, which paid $97 million, or $494,897 a unit.

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Next month, the Denver-based real estate investment trust Archstone-Smith is expected to close on the purchase of the 41-story, 550-unit residential rental tower, the Gershwin. It is also an 80/20 building that was completed in 1998. It is paying about $360 million, or $654,545 a unit, to Jack Resnick & Sons. Last month, the trust purchased two residential 80/20 rental towers. It paid $195 million, or $733,083 a unit to Adellco, for a 38-story, 266-unit building, the Aston, at 800 Sixth Ave. Earlier in the month, Archstone paid $87.6 million, or $394,594 a unit, to the Gotham Organization for the 222-unit building, the Foundry, in Clinton. Some industry leaders expect Archstone-Smith to be one of the bidders for the Magellan, an 80/20 residential rental apartment building that is for sale: the 35-story, 168-unit building at 35 W. 33rd St., between Fifth and Sixth avenues. The building, which is next to the Empire State Building and has a parking lot with 52 spaces, was finished in 2003. It is owned by Pitcairn Properties, and may fetch close to $100 million, or $600,000 a unit.

Earlier this month, Sterling Equities sold the Clearwater Portfolio, 10 residential and retail buildings, including 224 residential units and 22,000 square feet of retail space in the East Village, including the Second Avenue Kosher Deli location. The properties include 21 stores in three elevator buildings and seven walk-ups. The buyer was a group led by Martin Newman, Nathan Halegua, Yair Levy, and Serge Hoyda, who paid $93 million for the package.

Earlier this month, Maxim Properties sold a 73,500-square-foot building at 227 W. 61st St. to Co-finance for $31.2 million. The site is leased through 2010 to the New York Board of Education. According to industry sources, the site has air rights that would allow an expansion of the site to 140,000 square feet.

As the stock market remains flat, everyone is scrambling to own real estate. Investors are paying unexpectedly high prices. One real estate owner who recently purchased a property told me, “I do not expect to make any profit on this recent purchase during my lifetime. Nor do I expect my children to see profits in their lifetime. I am purchasing this real estate for my grandchildren.”

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