There are various methods for evaluating the state of New York's commercial real estate investment market. A frequently cited, but potentially misleading, statistic is dollar volume. If dollar volume increases, it is often assumed that the market is more active. This is sometimes true, but not always.
BKREA's analyses show that Manhattan currently presents an interesting example of the latter case. According to BKREA's historical dollar volume data, investment sales in Manhattan totalled $19.914 billion in 2025. In the first half of 2026, the volume reached $10.173 billion, of which $4.197 billion was attributable to the first quarter and $5.976 billion to the second quarter. If this pace continues, 2026 is expected to conclude at approximately $20.346 billion, which would be slightly above the previous year. This positive development is encouraging, and almost every sector of the Manhattan market is experiencing positive movement.
Sectors with strong performance
The office market is booming: leasing activity is robust, and investor demand has picked up again. The peak of the office-to-residential conversion wave appears to have passed. Buildings that were considered conversion candidates a few years ago are increasingly profitable as office buildings once more. Retail is also strong. The land market is robust, with condominium development leading the way. Equity investors are becoming more active in this area, and construction lenders are increasingly willing to provide capital. Hotels are prospering, benefiting from virtually no new competitive supply. Free-market rental apartment buildings are also performing extremely well, benefiting from strong rental fundamentals and limited new supply.
One striking problem persists: rent-regulated rental apartment buildings. Values in this sector, according to our observations, remain approximately 80 per cent below their peak, and the outlook remains challenging. The Rent Guidelines Board has frozen rent increases for one- and two-year stabilised lease renewals starting from 1 October, while owners continue to face rising costs for insurance, maintenance, labour, utilities, and other operating expenses. If revenues remain constant while expenses rise, the economic situation will become increasingly strained. Rent-regulated multi-family homes represent the outlier in an otherwise broad-based improvement in Manhattan's commercial real estate market.
Discrepancy between volume and number of transactions
Yet, even with these positive developments at the sector level, dollar volume tells only part of the story. To understand how active the investment market truly is, one must also look at the number of properties actually changing hands. BKREA's data on the number of properties sold in Manhattan dates back to 1984. In 2025, 693 investment properties were sold in Manhattan. Based on 341 sales in the first half of this year, a pace of approximately 682 sales is expected for 2026. This juxtaposition is remarkable: Manhattan could generate a higher dollar volume in 2026 than in 2025, despite actually selling fewer properties. Dollar volume indicates how much money is moving; the number of properties sold indicates how much the market is moving. Currently, money is moving faster than the market.
The historical perspective makes this difference even clearer. From 1984 to 2025, an average of approximately 704 properties were sold annually in Manhattan. The last year to surpass this average was 2018 with 811 transacted properties. The New York Housing Stability and Tenant Protection Act of 2019, which severely impacted the regulated rental housing market, has had a significant effect here, as New York has more residential buildings than any other type of building, and this one sector profoundly influences the market's overall performance. If 2026 concludes with the projected 682 sales, it would be the eighth consecutive year at or below the long-term average. For comparison, 1,197 properties were sold in 2012, and in 2015, dollar volume reached $57.507 billion. The projected property sales for 2026 would thus be approximately 43 per cent below this peak, while the projected dollar volume would be around 65 per cent below the cyclical high point.
However, comparing it solely to a historical high point overlooks an equally important aspect. In 2020, at the height of the pandemic, only 385 properties were sold, and dollar volume fell to $11.151 billion. Since then, the market has come an enormous way back. The recovery is real. Capital is returning. Financing is becoming more accessible. Investors are growing more confident. And, with the important exception of rent-regulated multi-family homes, the underlying fundamentals are increasingly constructive. What has not yet recovered is the speed of transactions. Owners are still not selling in historically normal numbers. This makes the next phase of this cycle so interesting. Not only larger, but also more transactions are needed. It's not just about capital, but also about sellers. When the number of properties changing hands finally rises significantly above its long-term average, the recovery will be in a completely different phase. Until then, it is important to note the distinction: dollar volume indicates how much money is moving; properties sold indicate how much the market is moving. Today, money is moving faster than the market.
