NEW YORK, NY – January 23, 2026 – In 2025, the Manhattan investment sales market (below 96th Street) staged a significant resurgence, with total dollar volume reaching $22.77 billion, a 45% increase over 2024, according to Ariel Property Advisors’ Manhattan 2025 Year-End Commercial Real Estate Trends report. Transactions rose 7% year over year to 419, making 2025 the third-most active year for the borough in the past decade.

The growth in dollar volume was anchored by a single office transaction—an entity sale of Paramount Group to Rithm Capital of which $3.8 billion was tied to Manhattan office buildings. Excluding this outlier, the Manhattan market still saw a healthy 11% year-over-year increase in dollar volume.

“The extraordinary growth in office sales to $11.29 billion, made it the top-performing asset class by dollar volume in 2025, driven by high-value trophy sales, major recapitalizations and targeted value-add acquisitions,” said Ariel Director Howard Raber. “Overall, office investment activity reflected a measured re-engagement of capital, led by institutional and private investors.”

Founding Partner Michael A. Tortorici noted, “Manhattan development site sales made a lot of progress in 2025 and are poised to significantly build on that momentum in 2026. A combination of condo developments, new 485x rental projects and office-to-residential conversions drove $3.97 billion in sales, the second best performing sector after office. With the 467m tax exemption and City of Yes provisions now in play, we’re also seeing major institutional owners repurposing their obsolete office assets into housing instead of selling them, which has contributed to an estimated 2.5 million square feet of conversions currently underway.”

Senior Director Chris Brodhead added, “Manhattan’s multifamily market was stable 2025, with $3.44 billion in sales and pricing holding firm at $699 per square foot. However, we are seeing a distinct flight to quality and regulatory safety, as evidenced by free-market assets accounting for 84% of dollar volume last year.”

Office Highlights

      • The Manhattan office market in 2025 saw a massive surge in capital deployment with dollar volume skyrocketing 126% to $11.29 billion, while transaction volume rose to 73, up 26% compared to 2024.
      • In addition to the Paramount Group’s $3.8 billion entity sale to Rithm Capital, RXR acquired 590 Madison Avenue for $1.08 billion, buying out the State Teachers Retirement System of Ohio.
      • Office pricing in 2025 averaged $705/SF, ranging from below $300/SF for Class B and C office properties to over $1,800/SF for Class A and trophy assets, particularly in SoHo, Midtown South, and core Midtown.

Development Highlights

      • Manhattan development site sales totaled $3.97 billion across 64 transactions in 2025, a 19% year-over-year increase in dollar volume and 4% decline in transactions.
      • Rental development volume surged 38% to 11.2 million BSF with activity pivoting to sub-99-unit projects to maximize 485x tax benefits while bypassing restrictive wage mandates for larger builds. Condo development transactions rose 26%, anchored by the landmark $810 million purchase of 800 Fifth Avenue.
      • Average pricing climbed to $468/BSF, excluding the outlier purchase of 800 Fifth Avenue for $2,869/BSF.
      • Office-to-residential sales volume fell to $1.3 billion, primarily because major institutional owners are converting obsolete assets rather than selling at a discount. Significant trades in this category included TF Cornerstone’s $158.5 million acquisition of 135 East 57th Street and Vanbarton Group’s acquisitions of 6 East 43rd Street and 1011 First Avenue for $135 million and $103 million, respectively.

Multifamily Highlights

      • Manhattan multifamily investment sales activity remained stable in 2025 compared to 2024 with $3.44 billion (1% decrease) across 185 transactions (2% decrease).
      • Free-market properties represented 84% of total multifamily dollar volume and more than 65% of transaction activity, indicating a sustained market preference for assets with limited regulatory constraints.
      • Pricing fundamentals remained notably resilient, with average values increasing to approximately $699/SF, a 3% year-over-year increase.
      • In 2025’s largest multifamily deal, Macquarie acquired a minority stake (just under 50%) in 10 Waterside Plaza from Brookfield.

Retail Highlights

      • Retail accounted for 68 transactions, a 31% year-over-year increase, while total dollar volume fell by 10% to $2 billion.
      • Key trades included Kering selling a 60% stake in 717 5th Avenue to Ardian for $540 million, IKEA’s $213 million acquisition of 529 Broadway, Polo Ralph Lauren’s $132 million acquisition of 109 Prince Street and UNIQLO’s $355 million acquisition of the commercial condominium at 666 Fifth Avenue.
      • The availability rate in prime corridors dropped to 12.5%, the lowest level in over a decade. This scarcity drove aggressive rent growth in specific submarkets--SoHo saw asking rents jump 24.1% and Upper Fifth Avenue rents rose 17%, according to REBNY.

Hotel Highlights

      • Manhattan hotel investment sales totaled $1.5 billion across 11 transactions in 2025, a 7% year-over-year increase in dollar volume but a 21% decline in transactions.
      • Fundamentals have remained strong, with 89.3% occupancy and 11.7% RevPAR growth signaling a full return to pre-pandemic stability.
      • Notable transactions included Kam Sang Company’s acquisition of 5 Madison Avenue in the Financial District for $231.2 million ($917/SF) and the sale of 300 West 44th Street in Hell’s Kitchen for $218 million ($486/SF).

To read the full report, please click here.