Investment in New York City Office Assets Grew to $11B in 2025

Investments in New York City office assets saw a 30 percent year-over-year rise to $11 billion in 2025, according to analysis from JLL, highlighting how resilient the sector has become. 

Notable transactions in 2025 included the $510 million sale of the Sotheby’s building at 1334 York Avenue to Weill Cornell medical school, which was the largest deal of the fourth quarter, as well as the $273 million sale of 2 Grand Central Tower to Sovereign Partners. Also in 2025 was the sale of 590 Madison Avenue for almost $1.1 billion to RXR from the State Teachers Retirement System of Ohio.

“Over the course of 2025, momentum steadily rebuilt across New York City’s capital markets,” Andrew Scandalios, senior managing director and co-head of the New York office of JLL Capital Markets, said in a statement regarding the office analysis. “Office in particular began drawing renewed investor attention for the first time in several years, setting a more constructive tone as we move into 2026.” 

Office-to-residential conversions in Manhattan also played a role in the change to the city’s balance of office stock, JLL noted. Some 75 office conversions — completed, under conversion, or being evaluated for conversion — represented about 34 million square feet of office inventory. 

The majority of office conversions have been taking place in the Lower Manhattan area, according to JLL, because the area’s zoning and the floor plates of downtown buildings lend greater support for residential conversion. 

One of the more notable conversions in the Lower Manhattan market was 25 Water Street, which had been home to publications including the New York Daily News and National Enquirer and is now a luxury rental property.  Other notable targets for residential conversion include 222 Broadway, 75 Maiden Lane and 13 Gold Street. 

“After a prolonged period of uncertainty, 2025 brought a noticeable shift in New York’s investment landscape as capital started to move again,” Drew Isaacson, senior managing director with JLL’s New York Commercial Sales team, said in the statement. “We saw private capital, foreign groups and institutional players re-engage, each looking to re-enter before pricing fully normalizes. Office transaction volume reached more than $11 billion for the year, signaling that buyers are no longer just testing the waters, but diving back in selectively, especially for well-leased assets in proven submarkets setting the stage for a very productive 2026.”

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