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Manhattan Apartment Building Prices at Peak as Rents Jump

Real estate investors competing to buy Manhattan apartment buildings have sent prices to record highs as rental demand surges, reducing yields on the properties to the lowest in more than six years.

The capitalization rate, a measure of investment return that declines as prices rise, averaged 4.4 percent for Manhattan multifamily buildings in first three months of this year, the lowest since the third quarter of 2005, according to New York-based data firm Real Capital Analytics Inc.