New York City's multifamily sector has seen impressive growth over the past year, despite the momentum slowing down in recent months.
The total dollar volume of $2.21 billion stood out the most, as that figure surged 62 percent year-over-year. The transactions of 269 were up by five percent, according to a report from Ariel Property Advisors.
Dollar volume was particularly strong in Brooklyn, which skyrocketed by 138 percent to $1.06 billion, nearly half the total sales in the entire market. Transactions were up by nine percent in the borough. Manhattan's results were strong, with the categories increasing by 36 percent and five percent, respectively. Also, Queens was solid, with 19 recent and 14 percent growth in dollar volume and transactions. The Bronx was a little more mixed with its 78 percent surge in transactions, while dollar volume dropped by three percent.
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"Free market multifamily assets dominated NYC’s multifamily market in Q1 2025, driving 88% of total dollar volume—a record high—and 58% of transactions," Ariel wrote.
The city's building volume and total multifamily units climbed by 10 percent and 34 percent, respectively.
Meanwhile, the trends were the polar opposite of those of the previous three months. For example, over that period, dollar volume and transactions each plummeted by 17 percent, while building and total units decreased by 26 percent and 42 percent, respectively.
Year-over-year rents saw notable growth in Manhattan and Brooklyn, which rose by 7.2 percent and 9.4 percent, respectively.
The two largest multifamily sales involved Steiner NYC, requiring a 62 percent stake in 333 Schermerhorn Street for $259.5 million, and Ares Management's $202.2 million purchase (75 percent equity control) of 525 W 52nd Street.
Going forward, Ariel points to three trends to watch out for in NYC's multifamily sector. One is a pause on PHFL Section 610 applications, which restricts landlords from matching rents with voucher levels. Another is skyrocketing insurance costs on properties built before 1974, which are up 50 percent over the past four years, according to Ariel, citing RGB data. Also, tariffs could cause more problems for prices.
"Rising materials and operational costs may delay or reprice development deals," Ariel wrote, but added that "If broader economic indicators soften, the Federal Reserve could shift toward rate cuts."
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