New York City’s commercial real estate market had a strong 2024, with $28 billion in investment sales—a 26% jump from 2023. Three asset classes led the charge: office buildings, development sites, and multifamily properties.
Office Market Rebounds ($5.4B in Sales)
- Class A offices thrive: High-end office towers attracted hedge funds, law firms, and financial institutions looking for premium, amenity-rich spaces.
- Big investors make moves: Japan’s Mori Building Co. bought 11% of One Vanderbilt for $4.7B, and Rockefeller Center secured a $3.5B refinancing.
- Class B & C offices struggle: Older buildings sold at discounts of 11% to 73%, with many set for conversion or repositioning.
Development Sales Boom ($5.5B in Transactions)
- Office-to-residential conversions surge: Over $2.4B worth of Class B & C office buildings (7M SF) sold for redevelopment.
- Key projects: Related and Extell acquired Madison Ave properties for new residential, retail, and hospitality developments.
- Tax incentives fuel demand: The 467-m tax exemption and City of Yes zoning changes are making conversions and new developments more attractive.
Multifamily Sales Surge ($8.9B in Deals)
- Free-market apartments lead: Prices dropped 28%, while rents jumped 20% in prime areas. Investors like Silverstein and Carlyle seized the opportunity.
- Rent-stabilized buildings hit hard: Values fell 29% to 68%, attracting private investors betting on policy changes or affordable housing conversions.
- Affordable housing sees activity: Public-private partnerships drove major deals like Knickerbocker Village and Beacon Mews.
What’s Next for 2025?
- $1T in loan maturities could lead to distressed sales.
- More office-to-residential conversions expected with new tax incentives.
- Private equity and foreign investors stepping in as traditional lenders pull back.
- Interest rates remain a wildcard, impacting transaction volume.
NYC’s commercial real estate market is evolving, and 2025 could bring more opportunities—especially for investors looking to capitalize on changing market conditions.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
