In Manhattan Investment Sales, the Money Is Moving Faster Than the Market

There are many ways to measure the health of the New York City commercial real estate investment sales market, but one of the most commonly cited statistics can also be misleading: dollar volume. 

When dollar volume rises, the natural conclusion is that the market is more active. Sometimes it is. Sometimes it isn’t. 

Our research at BKREA shows that Manhattan is experiencing an interesting version of the latter today. According to our BKREA Manhattan dollar volume history, Manhattan investment sales totaled $19.914 billion in 2025. Through the first half of 2026, volume reached $10.173 billion — $4.197 billion in the first quarter and $5.976 billion in the second. 

If that pace continues, 2026 would finish at approximately $20.346 billion, slightly ahead of last year. The direction is encouraging, and nearly every product sector within the Manhattan market is moving positively. 

Office is on fire. Leasing activity is strong and investor demand has returned. In fact, we appear to have moved beyond the peak of the office-to-residential conversion wave. Some buildings that might have been considered conversion candidates a couple of years ago are increasingly viable as office buildings again. 

Retail is strong. 

The land market is strong, with condominium development leading the way. Equity investors are becoming more active in this space, and construction lenders increasingly want to put money on the street. 

Hotels are thriving, aided by virtually no new competitive supply. 

Free-market apartment buildings are also performing extremely well, benefiting from strong rental fundamentals and limited new supply. I continue to believe 485-x is a major impediment to the production of the new rental housing New York needs, and the limited development pipeline is contributing to the strength of existing free-market product.

There is one conspicuous exception: rent-regulated apartment buildings. Values in that sector remain approximately 80 percent below their peak based on our observations, and the outlook remains challenging. The Rent Guidelines Board has frozen increases on one- and two-year stabilized lease renewals beginning Oct. 1, while owners continue to face rising insurance, maintenance, labor, utilities and other operating expenses. When revenues remain flat while expenses increase, the economics become increasingly stressed. 

Rent-regulated multifamily remains the outlier in an otherwise broad-based improvement across Manhattan commercial real estate.

But even with these positive sector-level developments, dollar volume tells only part of the story. To understand how active the investment sales market really is, we also have to look at the number of properties actually changing hands.

Our BKREA Manhattan number of properties sold history tracks that activity back to 1984. In 2025, 693 Manhattan investment properties sold. Based on 341 sales during the first half of this year, 2026 is presently on pace for approximately 682. 

Think about that juxtaposition: Manhattan could generate more dollar volume in 2026 than in 2025 while actually having fewer properties sold. Dollar volume tells you how much money is moving. The number of properties sold tells you how much the market is moving. Right now, the money is moving faster than the market.

The historical perspective makes this distinction even more striking. From 1984 through 2025, approximately 704 Manhattan properties sold annually on average. The last year above that average was 2018, when 811 properties traded. The state’s 2019 Housing Stability and Tenant Protection Act, which crushed the regulated apartment building market, is impactful as there are more apartment buildings than any other building type in New York, and this one sector is having a profound impact on the market’s overall performance. 

If 2026 finishes at the projected 682 sales, it will represent the eighth consecutive year at, or below, the long-term average. Compare that with 2012, when 1,197 properties sold, and with the dollar volume in 2015, when volume reached $57.507 billion. Projected 2026 property sales would remain approximately 43 percent below that peak, while projected dollar volume would be roughly 65 percent lower than the cyclical peak.

But comparing today only with a historic peak misses something equally important. In 2020, at the height of the pandemic, just 385 properties sold and dollar volume fell to $11.151 billion. 

We have come an enormous distance since then. The recovery is real. Capital is returning. Financing is becoming more available. Investors are becoming more confident. And, with the important exception of rent-regulated multifamily, underlying fundamentals are increasingly constructive.

What has not yet returned is transaction velocity. Owners are still not selling in historically normal numbers. That is what makes the next phase of this cycle so interesting. We don’t simply need larger transactions; we need more transactions. We don’t simply need capital; we need sellers. 

When the number of properties changing hands finally moves meaningfully above its long-term average, we will know this recovery has entered an entirely different phase. Until then, remember the distinction: Dollar volume tells us how much money is moving; properties sold tell us how much the market is moving. Today, the money is moving faster than the market.

Robert Knakal is founder, chairman and CEO of BK Real Estate Advisors.