The Resilience of New York City Commercial Real Estate in 2025

Industry News
Aug 22
4 min read

Updated: Sep 2

The first half of 2025 reaffirmed what many at Skyline Properties already know: quality assets in New York City commercial real estate continue to attract capital. Investment sales totaled $13 billion in the first six months of this year. More than half of this amount is concentrated in what can be termed the city’s “Fabulous Four” asset classes—Class A and trophy office, free-market multifamily, affordable housing, and retail.

These categories do not just attract capital; they define the future of the market. At Skyline, we have observed firsthand how institutional players, private investors, and major tenants are gravitating toward these assets as safe, long-term bets in a shifting economy. Our recent closings across Manhattan and Brooklyn reflect the same themes we see citywide.

Trophy & Class A Office: Flight to Quality Driving Leasing and Investment

Office sales surged to $3.1 billion, up 116% year-over-year. Notably, 74% of that volume is concentrated in Class A and trophy towers. This trend is unsurprising. Creditworthy tenants seek premier locations and best-in-class amenities to foster company culture and attract top talent.

Firms like Deloitte, Jane Street, and Apollo have leased nearly 3 million square feet in these assets. This activity has driven vacancies down from 17.2% to 10.7% in just six months. Equity partners and lenders are equally enthusiastic. Approximately 60% of 2025’s office transactions involved recapitalizations, partial interest sales, or joint ventures—signals of confidence in the durability of these properties.

At Skyline, we have been directly involved in advising office owners who are opting for recapitalization instead of outright sales. This trend preserves long-term upside while still welcoming new capital. One of our recent office closings involved a Midtown Class A building. We secured a buyer willing to structure a creative joint venture—exactly the kind of deal flow defining the office sector today.

Free-Market Multifamily: Rent Growth and Institutional Confidence

Multifamily properties continue to be one of the most resilient asset classes. In the first half of 2025, sales hit $4.4 billion, with free-market properties accounting for 57% of the activity. With housing supply perpetually tight, vacancy rates have compressed to 2.25%, pushing rents higher. This signals that the market has not only stabilized but is primed for long-term growth.

This year, Skyline successfully closed on several free-market multifamily buildings in Manhattan and Brooklyn. Investors are eager to step in while pricing remains below peak levels. These buyers recognize the same opportunity we do: strong rent growth, limited supply, and long-term appreciation.

One of our recent Brooklyn walk-up sales attracted more than a dozen offers within days. This demonstrates that even smaller-scale free-market properties are in demand, especially when protected by favorable tax classifications. On a larger scale, Skyline facilitated the sale of a deregulated multifamily property in Manhattan that is already benefiting from significant turnover and repositioning potential.

Affordable Housing: Incentive-Driven but Critical

Affordable housing represented 20% of multifamily sales this year, largely due to public incentives and partnerships. Without these programs, preservation and new development would not be viable.

The recent sale of a 602-unit complex in Far Rockaway underscores this point. The buyer secured a new regulatory agreement with HPD and committed to rehabilitating a beachfront property that has endured decades of deterioration. Deals like this illustrate how mission-driven investors can align profitability with social impact.

At Skyline, we have actively structured affordable housing transactions where owners weigh their options: recommit under regulatory agreements or exit the asset. Our role has been to help sellers maximize value while ensuring transactions proceed smoothly within these complex frameworks.

Retail: Prime Locations, Brand Control

Retail may not be the largest volume sector, but when deals occur, they make headlines. The first half of 2025 saw $1.3 billion in retail trades, dominated by flagship acquisitions from owner-user tenants.

Uniqlo paid $355 million for its Fifth Avenue flagship, while Ralph Lauren secured its SoHo store for $132 million. These brands understand the value of control—they prefer ownership over renegotiating escalating leases.

At the same time, institutions continue to purchase prime retail corridors. Acadia Realty Trust’s $60 million acquisition of properties on North 6th Street in Williamsburg, anchored by tenants like Abercrombie and Lululemon, demonstrates ongoing investor appetite for well-located, brand-driven retail.

Skyline has also completed multiple retail-focused transactions in Manhattan this year, including mixed-use assets with strong ground-floor tenants. These deals highlight the long-term value of well-located retail—especially when paired with residential or office components.

The Takeaway: A Flight to Quality

The through-line across all four sectors is clear: capital is flowing toward quality. Whether it is a trophy office tower, a stabilized multifamily asset, or a flagship retail location, today’s market rewards owners who control premier real estate in irreplaceable locations.

At Skyline Properties, our recent closings and ongoing pipeline reinforce this trend. Buyers, sellers, and lenders are no longer chasing volume—they are pursuing certainty. The first half of 2025 has only reinforced this truth: investors, lenders, and tenants alike are voting with their capital, and they are betting on the best.

For more insights, follow Robert Khodadadian on Twitter or explore Skyline Properties on Instagram.