- NYC property sales jumped 38% year-over-year in Q1 2025, with 164 deals totaling $3.7B.
- Development sites represented 26% of all dollars spent—the highest share since 2018—as small investors take the lead.
- The Midtown South rezoning and tax incentives like 485-x and 467-m are expected to drive a surge in development and conversions through 2026.
A Promising Start to 2025
New York City kicked off 2025 with a burst of investment sales activity, signaling renewed optimism in the market, as reported by Bisnow.
While the $3.7B total dollar volume marked a 23% dip from Q4—typically the busiest time of year—the strong uptick in transactions points to growing momentum
Development Leads the Way
Development sites were the standout asset class this quarter, accounting for over a quarter of total investment—marking the highest share since 2018.
Prices for buildable space also rose 10% year-over-year, underlining demand ahead of a likely construction boom.
Among the most notable deals:
- Uniqlo acquired a retail condo at 666 Fifth Ave. from Vornado Realty Trust for $355M.
- Extell Development secured the final piece of a Fifth Ave. assemblage for $175M.
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Why It’s Happening Now
The stage is set for a year of heavy development and repositioning.
Avison Young’s Erik Edeen noted, “You’re talking about a nine-month period where there’s probably going to be a huge flurry of activity in people figuring out if conversion makes sense.
Office Conversions on the Rise
Office properties are increasingly being sold with conversion in mind. In Q1, 15 Manhattan office assets changed hands—over half of which are now slated for residential conversion.
With high vacancy rates and muted leasing activity in the office sector, repositioning these assets is emerging as a viable path forward, especially under the new tax regime.
Caution on the Horizon
Despite the optimism, developers remain wary of cost volatility—particularly around construction materials.
“It’s going to take some time for developers to process what that’s going to do at hard costs,” said James Nelson of Avison Young.
“But if there is pressure on development, the pendulum swings back. What that does is make the existing more valuable.”
What’s Next
With the groundwork laid through policy and zoning reforms, NYC is likely to see a flurry of activity in the coming months.
If interest rates remain steady and regulatory clarity continues to improve, 2025 could mark the beginning of a broader resurgence in New York’s development pipeline.
