And we're going to talk today about the multifamily market. Our company, Ariel Property Advisors just put out the third quarter of 2025. And the news are that everything is rising globally, meaning the multifamily market has done better quarter over quarter by about 14, 17% year over year and 14% quarter over quarter. What we also notice is that the majority of all of these transactions are happening in the free market world. As we all know, there's three main food groups that we look at. It's free market, multifamily, affordable housing, multifamily, and rent stabilized multifamily. And the free market world has been fascinating. Its growth in rent is significant year over year. That's what attracts investors to it. The undersupplied market is tremendous. We've seen some larger deals happening. One of them was Riverbank in Manhattan this quarter. I want to ask Vic or have Vic chime in here and tell us what he sees in the transaction world in multifamily today, as we're wrapping up the third quarter numbers, Vic?

Sure, Shimon. So as you stated, you know, we've seen incremental growth in dollar volume since the beginning of the year. And it's nice to see that since the first quarter up until now, we've really exceeded a $2 billion in quarterly multifamily sales. You know, last time we spoke, we thought third quarter would end up between $2 and $3 billion. It kind of ended up right in the middle there at around $2.5 billion. And as you said, a large portion of it really since the beginning of the year comes from that free market product type. And if you really look at what's been happening, Manhattan and Brooklyn have been battling for that top position for dollar volume. They kind of go back and forth. And, you know, Manhattan had more volume this quarter.

Brooklyn had more volume last quarter, but a lot of that depth of investor interest, especially institutional equity interest in the multifamily space in New York City does tend to be directed towards that prime location free market or predominantly free market asset class. You mentioned Riverbank that had good competition as we understand it. We understood that it was around a year one, 5% cap rate. And again, had good depth of interest. There was another partial interest purchase, purchase that was a large trade where go real estate partners bought out RXR from that portfolio that was purchased a few years ago and the valuation definitely increased fairly significantly from when they acquired it. And also, as you mentioned, it's because the fundamentals are there, right? It's free market.

It's not as regulated as the rent stabilized space, although there are some regulations attached to it as well. Right. But it's free market and the rents are growing. The fundamentals are really there. Interest rates now have started to trend in a softer direction over the last 45 to 60 days. So really that's where the activity lies.

And then if you look at the workforce housing locations or the outer boroughs, they tend to struggle in dollar volume. It tends to be much less consistent. Last quarter, we had some nice trades in the rent stabilized space when related sold to Peter Hungerford's firm in the Bronx.

We had some big affordable housing transactions that we were a part of throughout the outer boroughs, but this quarter didn't see that. Right. And that's what you're seeing. You're seeing consistent demand in the free market asset class, and it's much more choppy when it comes to rent regulated or affordable because of all the regulations attached to it. Yeah. I want to, I want to add a couple of things.

I think, I think you, you said a few things that were super interesting. The one item that you mentioned was about the partial sale to go. And earlier in the year, not this quarter, there was another recapitalization that heiress did and kept a conic on West 52nd street. And these are, these are signs that those who own these free market buildings want to stay in. And there's a big belief in, in that. And, and the category of free market is also enjoying relatively lower basis compared to peak. So Riverbank, I believe was sold for less than 600,000 a unit which is a number that we haven't seen in a long, long time. And in addition to that, there is growth on a price per foot basis year over year. So this is something that allows investors to see the advantage here.

Yeah. I mean, I think you kind of nailed it on the head. You know, the supply and demand dynamics of Manhattan are, you know, a huge factor that lenders look at. You know, we look at the vacancy rate in Manhattan relative to other boroughs and other markets across the country, vacancy is extremely low. And, you know, we just closed on a office to residential conversion.

And the West side of Manhattan on 35th street, 29 West 35th street, where, you know, a client of ours bought a office building out of special servicing with plans to convert it to 107 residential units. And we ran a full process and we had 12 real quotes from banks and private lenders. You know, these were very competitive quotes and, you know, we had a lot more interests out there.

So, I mean, the interest from the capital markets in adding more supply to well-located areas of Manhattan, you know, is through the roof right now. And, you know, when they look at it relative to other parts of the country where there's a lot of supply coming on the market and there's downward pressure on rents in these other markets, New York, there's just upward momentum in rents and free market apartments. And actually we saw another interesting statistic that 15% of graduates from the top 100 universities across the country are moved, moved to New York last year.

And 25% of Ivy league grads moved to New York last year. So New York is growing with, you know, young professionals who are top earners looking to get high paying jobs. And that's just further fueling the demand for housing.

Right. Everybody who graduates wants to be in New York city, I don't blame them. And Ben on the financing side, on the financing side, when it comes to the different asset classes in multifamily, what do we see? Do we see more, do we see more liquidity today compared to let's say six months or a year ago? Absolutely. I think that we've seen a lot more, a lot more banks come into the market in the last six to 12 months, especially in 2025, they've kind of opened up their books. They've been looking a lot more at the free market multifamily on the perm side. And then we've seen interest from private lenders from debt signs, from private sources of capital explode.

I mean, I feel like I meet a new private lender every week, who's looking to get into the New York market in some way or another, whether it's ground up development or some kind of transitional property or through a lease up play or, you know, just a stabilized property that, you know, there's a lot of low cost capital coming out of the private space. So I feel like whenever we run a process, our list of lenders that are bidding to get into a New York deal, especially on the transitional side, grows with every deal that we work on. Thank you.

And Vic, before we wrap up, what do you think is going to happen between now year end and maybe even the first quarter of 2026, based on the pipeline, based on what we're seeing, how do you feel the market is? And I know there's some uncertainty there, which you can touch on if you want to, but how do we feel about the next six months?

Sure. I imagine the uncertainty you're referencing relates to the mayoral election coming up here soon. And that definitely has an impact on for sure the rent stabilized product type, but there is chatter in the investor world and confidence to deploy equity that ties into the roles, what will be the results of, of that race. But what I expect Shimon is that we're going to have a flurry of transactions to end the year. Like we typically do when things are relatively healthy or improving, right? And if you go back to what we said about the rates, I think that'll help fuel that for slurry of transactions to close out the year. We see it in our pipeline and we expect that from our pipeline as well.

I do think that it will be primarily or continue to be primarily driven by free market, multifamily, and that the interest that lies there. But when we get into the new year, what I suspect is regardless of the outcome of the mayor's election, there will be a renewed comfort and confidence in all product types. And hopefully it coincides with continued relief from interest rates.

But when we look back at previous election cycles, whether it's local or national, what tends to happen, at least from my perspective and what we've witnessed is that regardless of what the outcome is, there's a time where the market digests it, realizes that New York city is still New York city still has a depth to it that you cannot find in other locations throughout the country and things continue to, or, or, rebound, I would say activity rebound. So I think in 2026 we'll see more activity in the rent regulated and workforce housing product, regardless of what happens in, in the mayor's election. And I also think that, you know, we're, we continue to hear chatter from different stakeholders in our market, that the politicians also realize that what's happened in the rent stabilized space is not sustainable, especially if we start to talk about rent freezes, right? So, and if that happens, there has to be meaningful relief on the expense side.

And that might come in the form of a tax abatement that might ultimately be unlocked for the rent stabilized space. Again, we don't know. And that's speculative and we'll have to get into the legislative session in 2026 to truly flush that out. But I do think that I see better days ahead for rent regulated in 2026.

Thank you. So basically mayoral elections are the uncertainty is somewhat temporary, better pipeline is what we're seeing, possibly better interest rates. Ben was mentioning more capital. So we are really trending higher or up or in an upper cycle. At least that's the feeling that we have, which is really, really positive. And you added Vic that, you know, we hope for things to change in the rent stabilized world in that unsustainable legislation. And that is a positive. So thank you both Ben and Vic.