The New York real estate industry exuded upbeat energy not only about returning to the newly restored art deco Waldorf Astoria hotel for its biggest night of the year. Property professionals are also feeling positive about the prospects in 2026 for an office market that has been steadily building momentum.
The trade group Real Estate Board of New York held its 130th annual confab Thursday night, and attendees were willing to discuss challenges facing the city, particularly housing. But some of those mingling at the gathering linked the reopening of the historic hotel to New York’s larger comeback in the wake of the pandemic, particularly added office demand.
Returning to the Waldorf, said Tom Bow, executive vice president of commercial leasing for The Durst Organization, “feels like business as usual.”
The black-tie-optional gala brought together 1,100-plus industry, government and other attendees to honor eight people, including GFP Real Estate Chairman Jeff Gural, one of the owners of the restored Flatiron Building.
While New York Gov. Kathy Hochul and some city deputy mayors and commissioners were present, newly sworn-in Mayor Zohran Mamdani was absent; past mayors more often than not have been known to appear.
But Mamdani had proposed broad rent stabilization and using city-owned property for housing during the campaign before he took office Jan. 1, positions that sparked concern among the local real estate industry. Mamdani’s press team didn’t immediately respond to a CoStar News request seeking comment on why he didn’t attend.
Even with the mayor's missed opportunity for a little bridge building, James Whelan, REBNY’s president, said he wasn’t concerned by Mamdani’s absence: “His team was here. He’s got a lot to do. There’s always next year. … The biggest priority, we shared it with the mayor, is the housing situation. We need to create more housing in this town.”
While Mamdani has taken some steps such as addressing whether some city-owned property can be turned into housing, Whelan said the “one area of disagreement” the industry has with his administration centers on the pitch to freeze rent on about 1 million rent-stabilized apartments for four years.
“Rent-stabilized and rent-control housing is dead,” Bob Knakal, who has been ranked over the years as among the biggest sellers of commercial real estate in New York, told CoStar News. “You may as well just consider those million apartments as not even existing. … We don’t know if people who are getting protected under rent control and rent stabilization even deserve to be. ... We have to do something with the nonstabilized and noncontrolled housing, and the best way to do that is by building more new buildings.”
Still, against any uncertainty about how the real estate industry’s dance will go with the new mayor, professionals overall said their outlook on the market is positive.
“I’m very optimistic about 2026,” Knakal said, adding Manhattan last year had 691 buildings sold, which he said was a 2.5% turnover rate. “We have been at or below trend turnover for seven years in a row. That’s never happened before. There is pent-up demand to sell, and that the market is poised for a huge run-up in activity and in property value."
He added that "Values are too low. Turnover is too low. It has to change. It will change. I think 2026 is going to be the beginning of that. … Every property type is performing differently, but in our largest sectors, which are our apartment buildings and office buildings, values have been so depressed that they have nowhere to go but up.”
Office sector drives investments
James Nelson, New York-based head of U.S. investment sales at real estate services firm Avison Young, said 2025 was an “incredible” year for dealmaking in both New York and across the country.
“What was really driving that was office here in New York City,” he said in an interview, adding almost half of the investment sales dollar volume in the city last year came from office properties. “When there’s more office demand, you have more demand for apartments, more demand for retail.”
GFP’s Gural said his company is “in good shape” when it comes to office leasing, adding, “Most of our buildings are full.” The property owner also is undertaking some office-to-residential conversions.
“Right now, business is fine, but you know, that could change any time,” he said. “I’d like to see interest rates lower.”
Durst’s Bow, whose portfolio includes One World Trade Center in lower Manhattan, described 2025 as “the turning point” when it comes to office leasing in the city.
“The market will continue to improve and go up,” he said. “I don’t see anything turning it back. I see the high end of the market … continuing to perform very well.”
Top-tier buildings move market
As supply for high-end office stock tightens, rent is also headed up, Bow said, adding that its office tower at 825 Third Ave. has increased rents to $110 a foot at the top of the renovated building.
Top-dollar office leases jumped to record highs last year in Manhattan, a study by real estate services firm JLL found. New York was shown to have closed 2025 with its best office leasing volume since at least 2019.
Office “is coming back,” said former Silverstein CEO Marty Burger, who recently started a venture with L&L Holding Co. Chairman and CEO David Levinson to pursue development, buying and financing opportunities.
“It’s strong in New York. There’s been a huge surge in office leasing. Even the B buildings are getting used to that. It’s the obsolete buildings that need to be converted that just don’t lend themselves to be office buildings. And of course, there’s always a need for residential housing.”
Leslie Harwood, a managing director at Newmark, described “the pulse of the market” in New York as “very exciting right now, because the flight to quality is like something we’ve never seen.”
She added that “if you’re looking for Class A space in New York, it’s very difficult to find. As the Class A space is being eaten up … so B-plus or A-minus spaces are now renting as well. And as the footprint expands, the market gets stronger.”