JLL Capital Markets reports sharp rebound in NYC office investment activity in Q4 2025

Manhattan, NY JLL Capital Markets reports a strong rebound in investment activity across all New York City asset classes, led by a dramatic resurgence in the office sector.

Office transaction volume in 2025 increased by more than 26% year-over-year to $11 billion, supported by major institutional trades. 

Manhattan’s office vacancy rates vary widely, ranging from 15.8% among B Class buildings to just 6.4% for trophy space, highlighting how high-quality assets continue to attract leasing while older commodity properties remain under pressure. JLL year-end analysis found that a significant amount (8.1 million s/f) of vacant space is in buildings that are converting, or challenged because of capital stack issues, making real vacancy smaller than the data would suggest.

Andrew Scandalios, senior managing director and co-head of the New York office of JLL Capital Markets, said, “Over the course of 2025, momentum steadily rebuilt across New York City’s capital markets. Office in particular began drawing renewed investor attention for the first time in several years, setting a more constructive tone as we move into 2026.”

Scandalios leads a New York commercial sales team that includes senior managing directors David Giancola and Drew Isaacson and director Jennifer Zelko.

Giancola said, “For investors, this data reframes the narrative. The office market isn’t oversupplied so much as structurally constrained, with core assets gaining momentum while obsolete or encumbered stock quietly exits the leasing pool.”

The analysis also identifies 75 Manhattan office buildings that have been converted, are under conversion, or are being evaluated for conversion, representing approximately 34 million s/f, or 7.1% of total office inventory. Over half of this activity (60%) is concentrated Downtown, where floorplates and zoning best support residential or mixed-use adaptation. These projects reflect a structural rebalancing of the city’s office stock, gradually absorbing obsolete supply and stabilizing long-term fundamentals.

“After a prolonged period of uncertainty, 2025 brought a noticeable shift in New York’s investment landscape as capital started to move again,” said Isaacson.  “We saw private capital, foreign groups and institutional players re-engage, each looking to re-enter before pricing fully normalizes. Office transaction volume reached more than $11 billion for the year, signaling that buyers are no longer just testing the waters, but diving back in selectively, especially for well-leased assets in proven submarkets setting the stage for a very productive 2026.”

Overall, JLL’s analysis points to renewed confidence and liquidity returning to New York City’s capital markets, with office and retail leading the recovery and multifamily and industrial sectors maintaining strong, stable fundamentals heading into 2026.

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients, including investment sales and advisory, debt advisory, M&A and corporate finance, loan sales, equity & fund placement, net lease, derivative advisory and energy & infrastructure advisory. JLL Capital Markets has more than 3,000 specialists worldwide with offices in nearly 50 countries.