NEW YORK, NY – July 24, 2025 – Manhattan’s real estate market demonstrated resilience and modest growth in the first half of 2025, with $6.81 billion in dollar volume, a 4% increase year-over-year across 200 transactions, according to Ariel Property Advisors’ Manhattan 2025 Mid- Year Commercial Real Estate Trends report .

“Office was the top-performing asset class in Manhattan during the first half of 2025 as leasing rebounded due to demand for Class A space by law, tech and financial firms,” said Ariel Director Howard Raber. “Over 6.71 million square feet of office space traded hands, driven by trophy sales, recapitalizations and targeted value-add plays.”

Founding Partner Mike Tortorici added, “Manhattan also saw acquisitions for office-to-residential conversions in the first half of the year, a trend supported by the City of Yes, 467m tax abatement and proposed Midtown South rezoning. These pro-growth policies are significant and will lay the groundwork for a surge of new housing across the city."

Senior Director Chris Brodhead continued, “In the multifamily space, free market assets accounted for 91% of multifamily dollar volume and 81% of transaction volume in Manhattan. The fundamentals for these assets remained strong with rents rising, vacancies at historic lows and private equity and family offices targeting both core and value-add plays.”

Office Highlights

      • Dollar volume in the office sector totaled $2.88 billion across 35 transactions, up year-over-year by 117% and 35%, respectively.
      • Pricing averaged $774/SF and, depending on the submarket and asset type, ranged from below $300/SF for transitional assets to over $1,000/SF for boutique properties in SoHo, Chelsea, and the Village.
      • The largest transaction was Blackstone’s $644 million acquisition of a stake in 1345 Avenue of the Americas, buying out a J.P. Morgan–affiliated investor while Fisher Brothers retained control.

Multifamily Highlights

      • Multifamily investment sales in Manhattan totaled $1.26 billion across 97 transactions in the first half of 2025, a 19% drop in dollar volume but 5% increase in transaction volume year-over-year.
      • The increase in transaction volume corresponded with somewhat softer pricing. The average cap rate increased to 6.62% in 1H 2025, up from 6.23% in 2024.
      • A standout multifamily deal was A&E Real Estate Holdings’ purchase of 501 E 87th Street, a large elevator apartment building on the Upper East Side, for $116.5 million, or $576/SF and $647,222/unit.

Development Highlights

      • Development site sales totaled $1.12 billion across 29 transactions in 1H 2025, a 33% decline in dollar volume but 4% increase in transactions year over year.
      • The average price per buildable foot rose to $488, a 15% increase compared to 2024. However, pricing for premier condominium development sites garnered higher pricing, over $800/BSF.
      • The office-to-residential trend continued with approximately $300 million of the development trades slated for conversions, including two office properties at 675 3rd Avenue and 300 E 42nd Street that were acquired for a combined $152.5 million.

Retail Highlights

      • Retail transactions increased year-over-year by 42% to 27, while dollar volume fell 41% over this period to $868.7 million.
      • Average pricing surged from $1,780/SF in 2024 to $1,870 $/SF in H1 2025, driven by several large, high-profile trades in SoHo, Midtown, and the Upper East Side.
      • The two largest deals were both owner-user acquisitions. Polo Ralph Lauren’s $132 million purchase of 109 Prince Street set a year-to-date record at $13,321/SF, while UNIQLO acquired a commercial condo at 666 Fifth Avenue for $355 million.

Hotel Highlights

      • Manhattan hotel investment sales reached $432.1 million from four deals.
      • Three of the four trades occurred in Chelsea and SoHo, highlighting investor confidence in walkable neighborhoods with robust tourism, mixed-use flexibility, and future brand potential.
      • The largest sale was 99-103 Washington Street in the financial district for $154.5 million, or $1,025/SF.

Ariel Property Advisors’ Manhattan 2025 Mid-Year Commercial Real Estate Trends report is available here.