Free market multifamily sales dominate NYC market in 2025

In New York City, free market multifamily buildings played a significant role in the real estate landscape during the first quarter of 2025. Notably, these properties made up an unprecedented 88% of the total dollar volume, which reached $2.21 billion for the quarter, marking a significant increase from 63% in 2024. The surge in sales is attributed to a strong investor demand fueled by the city's persistent housing supply challenges and regulatory restrictions that limit the availability of rental apartments. High-income neighborhoods in Brooklyn and Manhattan attracted most activity, as investors targeted properties predominantly free from rent stabilization. A closer look at Brooklyn reveals it led the city's multifamily sales, capturing nearly half the total dollar volume. The borough witnessed an extraordinary 138% year-over-year increase, reaching $1.06 billion in sales. Transactions increased by 9%, with free market sales comprising 96% of this volume. Several high-value deals characterized the market, with four transactions exceeding $50 million, demonstrating a robust appetite for investment in premium assets. One notable sale involved Steiner NYC reacquiring its stake in 333 Schermerhorn Street for $259.5 million, exceeding its 2019 sale price. Meanwhile, the market in Manhattan, particularly below 96th Street, experienced significant growth as well. Multifamily sales totaled $868.51 million, up 36% year-over-year across 45 transactions, with 92% of the dollar volume coming from predominantly free market buildings. Prominent transactions included Ares Management’s acquisition of a 75% interest in select tax lots at 525 W 52nd Street for $202.2 million. The continued investor interest underscores the belief in the strong fundamentals of the free market sector, driven in part by rising rents. Two main factors contribute to the ongoing dominance of free market multifamily buildings: the imbalance between housing supply and demand, and the rise in rental prices in key areas. According to city statistics, New York City would need to create 60,000 new housing units annually over the next decade to meet growing demand, with approximately half of the existing rental market subject to rent regulation. This ongoing demand-supply imbalance continues to elevate the attractiveness and value of free market properties, which are characterized by the absence of significant rent controls. Investors remain confident in the multifamily asset class located in prime areas, suggesting a sustained interest moving forward.