Manhattan Investment Sales Volume Fell by Nearly Half Last Year


New York City investment sales had its second-worst year of the past decade in 2023, according to a report from Ariel Property Advisors

Manhattan saw $11 billion in investment sales volume in 2023, a 45 percent drop compared to 2022, the investment sales brokerage found. Meanwhile, transaction volume also fell by a third in that same time, with 280 sales for 358 properties hitting public records in Manhattan in 2023. 

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“Looking back at 2023, investors maintained the same conservative approach to the market as they’ve held since 2021, expressing concern about higher interest rates, rising expenses, and apprehension over the potential expansion of residential rent regulation,” Howard Raber, the director for investment sales at Ariel, said in a statement. 

High interest rates and a struggle to find financing were two major factors in the slowdown. And brokers continued to blame the state legislature’s 2019 strengthening of the rent regulation laws — which two trade groups tried and failed to get thrown out by the U.S. Supreme Court last year — for slowing multifamily sales.

Multifamily buildings with more than 10 units — which are much more likely to be rent stabilized — saw a bigger decline in dollar volume of sales than any other kind of property in 2023. Roughly $2.3 billion of those larger buildings traded last year, a 68 percent decline from 2022’s annual total of $6.8 billion. 

Things could get more challenging as the state legislature pushes to pass good cause eviction, which would further hamper a landlord’s ability to raise tenants’ rents.

Manhattan office buildings also saw a precipitous decline, sliding 58 percent from $6.8 billion in 2022 to $2.8 billion in 2023, Ariel found. More than a third of the office building dollar volume from last year came from SL Green Realty’s $1 billion sale of a stake in 245 Park Avenue to Japanese company Mori Trust, Ariel noted.

The sale of development sites also fell 45 percent year-over-year, slipping from $2.7 billion in 2022 to $1.5 billion in 2023. After the 421a tax exemption expired in June 2022, there has been little appetite to develop new rental housing in the five boroughs, slowing both development site sales and new building permits to a crawl. 

In a rare bright spot, hotel sales hit $2 billion last year, the highest dollar value in hotel sales since 2019. The average price per square foot, $1,103, also hit a four-year high. 

Ariel’s Chris Brodhead noted that average daily hotel rates in New York City peaked in October and November at $362 per night, up from $291 a night during the same period in 2019. 

“The driving forces for the hotel market may be attributed to an increase in tourism as well as supply constraints due to the special permit requirements for new hotel construction, regulations for Airbnbs, and housing for incoming migrants,” Brodhead said. 

Rebecca Baird-Remba can be reached at