Manhattan CRE Investment Expected to Surge 76% in 2024

As reported by GlobeSt, Manhattan’s CRE market is on track for a strong year, with $3.2B in sales volume and 80 transactions posted in Q3 alone, according to Avison Young’s property sales report. 

These figures reflect 29% more transactions and a 16% increase in dollar volume from Q2, revealing rising investor interest across sectors. 

By The Numbers

Avison Young now anticipates that by the end of 2024, Manhattan’s CRE investment transactions will be up by 16%, while total dollar volume is expected to soar 76% YoY.

Development sales led all categories in Q3, reaching $824.7M, a staggering 194% increase over Q2 and 191% YoY. The largest development sale was Related Companies’ $632.5M acquisition of 625 Madison Avenue. 

Conversion activity also grew, with $519M in total volume, up 59% from Q2 and a 120% increase in the number of sales to 11 transactions. Retail sales also performed well, reaching $318.1M, a 22% increase in volume, with transactions doubled, though average PSF pricing fell 32% to $1,207.

Some Sectors Slipping

Some sectors, however, saw declines. The office segment posted a 25% decrease in quarterly volume at $794.5M, though it rose 58% YoY with a slight 2% increase in PSF pricing to $382. Multifamily and mixed-use properties saw an 11% decline in volume to $717.4M, with PSF prices slipping 2% to $574. 

Cap rates varied across sectors, with retail at 6.98%, multifamily at 5.59%, and office at 4.58%.

Growing Optimism

Avison Young remains optimistic about the sector’s outlook and sees strong growth opportunities in Manhattan, particularly in office-to-residential conversions and with potential impacts from the recent rate cuts. 

The report suggests the market is gaining momentum heading into the final quarter of 2024.