Here’s what New York real estate leaders are saying about 2026

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Optimism is returning to New York City real estate. At the 130th annual Real Estate Board of New York (REBNY) gathering, more than 1,100 industry leaders, owners, brokers, and public officials shared a clear message: momentum is building heading into 2026.

From rebounding office demand to pent-up transaction volume and renewed investor confidence, industry leaders see the coming year as a turning point. Nowhere was this sentiment clearer than in commentary from Bob Knakal, Chairman and CEO of BKREA, who described 2026 as the beginning of a long-awaited market reset.

Key Takeaways from NYC’s Biggest Real Estate Event

• Office Market Recovery Is Fueling Broader Demand
  Industry leaders agreed that rising office leasing activity is driving increased demand for apartments, retail, and mixed-use assets, reinforcing New York’s economic recovery.
• Pent-Up Transaction Volume Signals a Market Inflection Point
  Manhattan recorded 691 building sales in 2025, representing just a 2.5% turnover rate. According to Bob Knakal, seven consecutive years of below-trend turnover point to significant pent-up demand poised to be released in 2026.
• Values Are Depressed — and Positioned to Rise
  “Values are too low. Turnover is too low. It has to change,” Knakal said, predicting that 2026 will mark the beginning of higher activity and rising property values across major asset classes.
• Top-Tier Office Space Is Tightening Rapidly
  Class A office availability is shrinking, pushing rents higher and pulling demand into B-plus and A-minus buildings. Some Manhattan office rents have already surpassed $110 per square foot.
• Flight to Quality Is Reshaping the Office Market
  Market participants noted unprecedented demand for high-quality buildings, with even secondary assets benefiting as premium inventory is absorbed.
• Housing Supply Remains the Central Policy Challenge
  While optimistic overall, industry leaders stressed that New York’s long-term health depends on building more housing. Knakal emphasized that increasing supply — not freezing rents — is the only sustainable solution.

Bob Knakal’s 2026 Market Outlook

Bob Knakal sees 2026 as the start of a major upswing. After years of constrained deal volume, he believes depressed values across apartment and office buildings leave little downside and substantial upside potential. With office demand strengthening and capital returning, Knakal expects increased sales activity and upward pressure on pricing citywide.

Why the Office Market Matters to the Entire City

Leaders at REBNY repeatedly underscored a simple reality: office demand drives everything else. When offices lease up, apartments fill, retail strengthens, and investor confidence follows. The rebound of New York’s office sector is not isolated—it is foundational to the city’s broader real estate recovery.

Frequently Asked Questions

Why are real estate leaders optimistic about 2026?

Below-trend transaction volume, rising office leasing, and improving fundamentals point to pent-up demand ready to re-enter the market.

What role does the office market play in NYC’s recovery?

Office leasing drives employment, foot traffic, housing demand, and retail performance, making it a catalyst for broader market strength.

Are property values expected to increase?

According to Bob Knakal and other leaders, values in major asset classes have been so depressed that upward movement is increasingly likely.

What is the biggest concern facing the industry?

Housing supply. Leaders agree that New York must build significantly more housing to maintain affordability and long-term growth.

Is the recovery limited to Class A buildings?

No. While Class A leads the recovery, tightening supply is pulling demand into well-located B-plus and A-minus assets.

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