May 21, 2025
2024 was a big year for New York City commercial real estate — investment sales surged to over $28 billion, a 26% jump from 2023, outpacing the national market.
As someone actively watching and working in this space, it’s clear the market momentum is being powered by three major asset classes: office, development, and multifamily properties. Together, they made up about 70% of all investment sales.
Here’s a quick look at what’s driving the action:
Office Market Comeback
After a rocky few years, the NYC office market found its footing again, clocking in $5.4 billion in sales — a 63% year-over-year jump.
Manhattan’s Class A office towers led the charge. Big players like hedge funds, law firms, and financial companies aren’t just returning to work — they’re doubling down, moving into highly amenitized buildings with a “corporate club” vibe.
You can really see the shift with projects like JP Morgan’s new headquarters and big-ticket transactions such as Mori Building Company’s $4.7 billion stake in One Vanderbilt.
However, it’s not all rosy. Older Class B and C buildings struggled, with some being sold off at steep discounts — a golden opportunity for investors looking to reposition assets.
Development Deals Fueled By Conversions
Development sales hit $5.5 billion in 2024, thanks largely to the rush to convert underperforming office buildings into residential spaces.
Thanks to new policies like the 467-m tax exemption, developers are getting major tax breaks for turning old offices into apartments, especially below Manhattan’s 96th Street.
Deals like Related’s purchase of 625 Madison Avenue and Extell’s buy of 655 Madison show how aggressive this trend has become.
Even more promising, NYC’s "City of Yes" zoning reforms, which make it easier to convert older buildings, are setting the stage for even more deals in 2025 and beyond.
Multifamily Remains a Magnet
Multifamily sales climbed to $8.9 billion in 2024, with the free market rental sector leading the charge. Investors — from institutional giants like Silverstein and Carlyle to private buyers — are all targeting free market properties.
With rents in top areas rising 20% over the past three years while prices fell nearly 28%, it’s no surprise this sector is on fire.
On the rent-stabilized side, some private buyers and family offices are stepping in where others fear to tread, betting on potential changes to NYC’s strict rent regulations or focusing on affordable housing strategies.
What’s Next for 2025?
All signs point to even more activity ahead. Mortgage maturities, fresh development incentives, and the possibility of lower interest rates could all bring more buyers to the table. Plus, we’re likely to see private equity and international investors play an even bigger role as traditional lenders get tighter with financing.
If you’re an investor, developer, or even just keeping an eye on where NYC real estate is heading, 2025 is shaping up to be a very interesting year.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
