In late March, the Pinnacle Group’s portfolio of 5,100 rent-stabilized apartments sold out of Chapter 11 bankruptcy for $451.3 million. The buyer paid a fraction of what those buildings were worth a decade ago. The seller had seen the math become impossible: operating costs up 40% since Albany’s 2019 rent law overhaul, rents allowed to rise just 1-3% per year creating a 24-point gap with no escape valve in addition to crippling collection losses and elevated interest rates.

The FOMC maintained the federal funds rate at 3.50% to 3.75% at its April meeting, though the decision exposed disagreements within the Committee. While one governor pushed for a 25-basis-point cut, three regional presidents voted to maintain rates but resisted including an 'easing bias' in the announcement. Despite a resilient economy and a steady 4.3% unemployment rate, inflation remains a persistent headwind. Headline PCE climbed to 3.5% in March because of rising energy costs, while core PCE, excluding the volatile food and energy categories, sat at 3.2%, hampered by ongoing tariffs in the goods sector. Both metrics are above the 2% target.

Shimon Shkury, President and Founder of Ariel Property Advisors; Victor Sozio, Founding Partner; and Matthew Dzbanek, Senior Director in the Capital Services Group, take a deep dive into New York City’s multifamily market on this episode of Coffee & Cap Rates.