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ew York City's investment sales rose 26% year-over-year to $28.3 billion in 2024, outpacing the national market. Office, development, and multifamily asset classes led the way, accounting for 70% of total investment sales volume.

    The New York City office market saw a 63% surge in sales to $5.4 billion, with $5.1 billion in Manhattan sales across five Class A and 50 Class B and C office buildings. High-end corporations are returning to the office, seeking space in highly amenitized buildings that offer a club-like corporate culture for employees.

    Class A office towers performed exceptionally well, with investors and lenders taking advantage of the market. SL Green's sale of 11% of One Vanderbilt to Japan's Mori Building Company for $4.7 billion is an example. However, Class B and C buildings faced challenges, with 14 buildings sold at discounts ranging from 11% to 73%.

    Development sales in New York City rose 53% year-over-year to $5.5 billion, driven by office-to-residential conversions. The activity included the sale of $2.4 billion of Class B and C office buildings totaling about 7 million square feet that will be transformed into apartments.

    Office-to-residential conversions got a boost from New York State's new Housing Policy, which introduced the 467-m tax exemption for conversion projects in Manhattan below 96th Street. The City of Yes, a pro-housing zoning proposal, also made it easier to convert buildings constructed before 1991.

    Multifamily sales grew 14% year-over-year to $8.9 billion, driven by strong demand for free market units. Free market buildings accounted for 63% of multifamily sales in New York City in 2024. Strong fundamentals drew diverse investors to free market multifamily, with prices falling by an average of 28% and rents rising by 20% in prime areas.

    Rent-stabilized assets faced pricing declines of 29% to 68%, attracting private investors and family offices. Public-private partnerships drove major affordable housing deals, including the sale of Knickerbocker Village for nearly $50 million.

    Looking ahead, New York City's commercial real estate market is poised for increased transaction volume and potential pricing stabilization. Key trends include mortgage maturities, the impact of Housing Policy, capital markets shifts, interest rates, and refinancing challenges that could create buying opportunities.