After nearly two years of high interest rates and stalled deal activity, capital is beginning to move again in New York’s commercial real estate market. But the recovery is far from uniform.
Instead, lenders and investors are targeting a narrow set of opportunities: office-to-residential conversions, stabilized multifamily properties, trophy office assets, and large repositioning plays capable of attracting institutional capital.
Recent financing activity across the city suggests a new phase in the market cycle: capital is returning, but only for assets that fit a changing investment strategy.
Major Financing Deals Signal Market Reopening
One of the clearest signs of renewed activity came earlier this year when lenders provided a $755 million construction loan for the expansion of Resorts World New York City in Queens, the largest real estate loan issued in the city during the opening weeks of 2026.
The financing, arranged by Wells Fargo, will support a large expansion of the casino and entertainment complex and highlights the willingness of lenders to back major development projects once again.
Other large loans issued in New York recently include:
- $480 million acquisition financing for Park Avenue Tower, arranged as part of SL Green’s purchase of the Midtown office property.
- $325 million construction financing for a Ritz-Carlton hotel development in NoMad.
- $310 million refinancing for two Fifth Avenue office properties.
Together, the transactions suggest that institutional lenders are gradually returning to the market after a prolonged slowdown in commercial real estate financing.
Conversion Projects Attract Institutional Capital
Perhaps the most telling example of capital’s return is the growing financing activity surrounding office-to-residential conversions, which have become a central investment theme in New York.
Earlier this year, RXR secured a $475 million financing package for the conversion of 61 Broadway in Lower Manhattan into a 796-unit residential building.
The capital stack included:
- $420 million in construction debt from Apollo Global Management
- $55 million in tax-equity investment from JPMorgan
The project is one of the largest office conversion efforts currently underway in New York and reflects a broader shift in how investors are approaching aging office properties.
“With office demand evolving and housing shortages continuing, conversions are becoming an increasingly attractive strategy for both developers and capital partners,” industry analysts have noted in recent market reports.
Multifamily Remains a Safe Haven for Capital
While office assets continue to face uncertainty, multifamily properties remain one of the most financeable asset classes in New York.
Recent transactions include:
- Amstar Group’s $129 million acquisition of a Hudson Yards rental tower, representing the firm’s entry into the New York multifamily market.
- A $111 million refinancing of a Long Island City rental building by Fetner Properties and Lions Group, arranged through PGIM Real Estate.
For lenders, stabilized rental buildings offer predictable cash flow and relatively strong tenant demand — factors that have kept capital flowing into the sector even as other property types remain under pressure.
Office Market Still Faces Repricing
Despite the return of capital in select areas, the office market continues to grapple with valuation pressure and evolving tenant demand.
Leasing activity improved significantly in late 2025, with Manhattan office leasing reaching roughly 9 million square feet in the fourth quarter, a sharp increase from earlier in the year. Availability rates also declined modestly.
But many older office properties are still experiencing refinancing challenges as lenders reassess valuations and long-term demand for office space.
This dynamic has created opportunities for investors seeking to acquire or reposition properties at discounted pricing.
A More Selective Capital Cycle
The emerging pattern across New York’s real estate market suggests that capital is returning but with far greater discipline than in previous cycles.
Lenders are prioritizing:
- assets with strong fundamentals
- projects supported by institutional sponsors
- developments with clear repositioning strategies.
Meanwhile, investors are increasingly drawn to opportunities created by pricing resets across certain segments of the market.
As the year progresses, the city’s capital markets are likely to remain defined by this selective approach of large transactions concentrated around projects capable of meeting the new expectations of lenders and equity partners.
For developers and investors navigating the current market, the message is clear: capital is available again, but only for the right assets and the right strategy.
Subscribe to Real Observer
Stay ahead of the market. Real Observer covers New York Tri-state development, capital markets, and real estate intelligence every weekday. Subscribe free →