May 07, 2025
If you’ve been waiting for a sign that NYC commercial real estate is turning a corner—this might be it.
At the ULI New York Real Estate Outlook 2025 event held at NYU Stern, the vibes were cautiously optimistic.
The big takeaway? Industry pros believe we’re stepping into the next upswing of the real estate cycle, especially with interest rates slowly dipping and investor confidence making a comeback.
According to PwC’s Emerging Trends forecast, nearly 65% of surveyed firms expect “good” or “excellent” profitability in 2025. That’s a serious jump from last year.
This renewed confidence is partially driven by those long-awaited interest rate cuts and hopes for higher returns and more transactions. Even though the Fed might be holding off on further rate drops for now, the tone has shifted—people are prepping for growth again.
In NYC, commercial real estate might finally be finding its footing after years of sluggish office demand. Office absorption is stabilizing, and some major landlords like Fisher Brothers are already seeing the payoff from upgrading their older buildings.
Instead of waiting for tenants to come back, they modernized HVAC systems, elevators, and amenities—and it's worked. Big leases are rolling in, putting them in a strong spot with lenders, especially as refinancing becomes a hurdle for many.
Conversions are also playing a big role. The city’s planning to turn up to 17 million square feet of outdated office space into apartments. That’s not just smart—it’s necessary. With continued job growth and a brutal housing shortage, demand for both quality office space and housing is still strong.
Still, there are some challenges ahead. NYC’s strict environmental laws like Local Law 97 aren’t going anywhere. Commercial property owners need to start preparing now or get hit with steep fines.
And on the financing side, traditional banks are still playing it safe, especially when it comes to office space. But CMBS lenders are stepping in to fill the gap for deals banks are passing on.
Investors believe the worst of the commercial real estate slowdown is behind us—and New York is poised to lead the recovery. Smart players are already making moves, upgrading assets, and finding opportunity where others see uncertainty.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
