An interesting trend on Broadway: investment sales transactions are down — but dollar volume is up, according to Avison Young's Manhattan fourth-quarter property sales report, which covered a range of asset classes from retail to multifamily.
The 76 transactions reached a $3.3 billion volume, representing a drop of four percent and a six percent increase respectively from the previous three months.
While many asset classes showed an imbalance between volume and transactions (gains versus drops), the office sector stood out with its strong performance. Its 13 transactions for sales of $1.6 billion surged 86 percent and 98 percent in the fourth quarter. Haddad Brands commanded the largest office purchase with its 2 Park Avenue acquisition for about $360 million. Also, office prices per square foot surged 33 percent to $507.
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But many other asset class performances showed significant disparity — none larger than the development market, which posted sales of $304.1 million and just six transactions. Volume was down 62 percent (but up 165 percent year-over-year), while transactions plunged 14 percent.
Retail saw sales of $497.9 million through 21 transactions, up 57 percent and down 13 percent. Prices per square foot rose seven percent to $1,297. Multifamily had 29 transactions for $646.3 million in volume, representing three percent and 10 percent drops respectively. Meanwhile, prices per square foot surged by 24 percent to $712.
The strength of office in the Metro area could be for a couple of reasons (although Avison Young didn't list why exactly). One, office continues to recover from the pandemic lows, while Manhattan has been seeing one of the strongest revivals in the country. Another could be its low average cap rates of 5.71 percent attracting investors, compared with retail, which was at 6.84 percent in 2024. But yet again, the multifamily performance in the fourth quarter was weak and its average cap rates weren't much higher at 5.71 percent.
But overall, Avison Young described the property sales report as "strong," further adding that "there is optimism heading in 2025 due to the growth in the market seen over the past year."
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