Multifamily Sales in NYC Jump 62% Year-Over-Year in Q1

In the kingdom of multifamily properties, market-rate assets reign supreme. 

New York City’s multifamily sales volume for the first quarter of 2025 totaled $2.21 billion, a 62 percent year-over-year jump from the 2024 first quarter, thanks mostly to sales of market-rate properties, according to the latest research from Ariel Property Advisors.

Market-rate assets accounted for 88 percent of the first quarter’s total dollar volume, according to the report, which noted this as the highest share recorded since Ariel started keeping track in 2010. The number of market-rate properties sold also made up the majority of multifamily transactions, coming in at 58 percent.

“We’re watching some kind of bifurcation play out in real time,” Shimon Shkury, president and founder of Ariel Property Advisors, said. “You see strong fundamentals that are pulling capital for free-market assets in a big way, while the rent-stabilized sector faces ongoing headwinds.”

The majority of the multifamily sales activity was in Manhattan below 96th street, and in Brooklyn. The focus was on buildings with less than 25 percent of rent-stabilized units or that are utilizing the (now lapsed and replaced) 421a tax benefit. 

“These are the locations that institutional capital banks are going to benefit the most out of rental growth,” Shkury said. “These locations have the strongest fundamentals. The rental market in general has grown by about 10 percent year-over-year, 7.2 percent of it is attributed to Manhattan below 96th Street, and 9.5 percent is to Brooklyn.”

Two of the largest sales from the first quarter were partial interest sales, according to the Ariel report. Steiner NYC reacquired a 62 percent stake in 333 Schermerhorn Street in Brooklyn that it sold to J.P. Morgan in 2019. The stake traded for $6.5 million above the original price and was part of a $420 million recapitalization. 

In the other transaction, Ares Management acquired a 75 percent stake for $202.2 million in a market-rate bulk residential unit and retail tax lots at 525 West 52nd Street. The properties were purchased from Mitsui Fudosan America. 

“It’s really the fundamentals that are attractive in these locations, [and] the assumption that growth will continue, especially in newer buildings [where] the tenancy is super strong and high earning and young enough to grow,” Shkury said. “So, that’s what’s attractive for investors in these specific locations.”

Rent-stabilized assets accounted for only 11 percent of dollar volume in the first quarter, the second-lowest share in five years, according to the report. Those properties continue to be heavily impacted by the Housing Stability and Tenant Protection Act (HSTPA) of 2019, inflation and interest rate hikes. HSTPA’s impact on the market has caused former Gov. Andrew Cuomo to apologize for his role in passing it as he aims to win real estate’s support in his efforts to become mayor.

“2019 has changed pretty much everything for rent-stabilized housing through HSTPA, and it hasn’t gotten better,” Shkury said. “But there are pockets of clarity in well-located, low-regulated or non-regulated buildings. And we’re seeing a lot more stability there.”

Despite the year-over-year boost, Shkury said he had expected a little more activity in Q1, but he chalks it up to some uncertainties related to costs and tariffs, among other things. 

Still, he expects more activity towards the end of the year.

“We didn’t expect some of the uncertainties we’ve seen in general in the market when it comes to some policy changes, or global policy changes,” he said. “I think we’ll see more transactions actually moving forward. I don’t know if this second quarter is going to be much better, but I think the third and fourth will be much more transactional.”

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.