New York City’s commercial real estate market is shaking off the turbulence of early 2026 and outpacing last year’s dealmaking by a wide margin, even as a rocky second quarter tempered some of the momentum. Overall investment sales across the city rose 60 percent year-over-year in the first half of 2026, according to Avison Young’s latest property sales report, as capital markets reopened and office financing flowed back into the pipeline. Transaction counts and dollar volumes climbed annually across Manhattan, Brooklyn, Queens, and the Bronx, painting a picture of a market in recovery mode despite the geopolitical headwinds that defined the start of the year.
The second quarter did see a 10 percent dip in sales volume, falling to $5.42 billion citywide from $5.68 billion, a slide that coincided with a climbing 10-year Treasury and the onset of U.S. military action against Iran. But Avison Young principals Brandon Polakoff and James Nelson say those quarterly figures reflect deals negotiated during an especially uncertain stretch rather than any fundamental weakness in the market. The city is on pace for $22.87 billion in annual sales this year, approaching New York’s 10-year average of $23.4 billion, which Polakoff likened to the steady climb that followed the Global Financial Crisis and eventually peaked in 2015.
Manhattan anchored much of the activity, logging 94 sales in the second quarter led by Extell Development’s $451 million acquisition of 405 Park Avenue. Other standout trades included Sovereign Partners’ $378 million purchase of 575 Fifth Avenue and Namdar Realty Group’s $280 million buy of 250 West 57th Street. Development sites emerged as Manhattan’s breakout asset class, jumping from three sales a year ago to thirteen totaling $707 million, driven partly by developers finding it easier to assemble new rental projects under the state’s 485-x incentive program than to compete for existing multifamily buildings. The office sector posted the largest dollar volume for the quarter at $1.51 billion, bringing its year-to-date total to $3.3 billion, up 110 percent compared with the same period in 2025.
Private buyers increasingly stepped into the void left by cautious institutions, accounting for 53 percent of Manhattan’s sales volume as uncertainty pushed larger players to the sidelines. Foreign buyers, meanwhile, dropped to a 10-year low of just 9.7 percent of first-half sales volume, though foreign sellers have not rushed to unload assets, suggesting a wait-and-see stance rather than an exit. Even amid what Polakoff called negative macro noise, he pointed to strong underlying fundamentals as evidence that the city’s investment sales comeback remains on solid footing, with each passing month moving the dial further from the doldrums of 2023 toward something resembling a normalized market.