Event lead. Manhattan’s investment machine restarted in Q3: $4.9B traded, led by trophy offices at 590 Madison ($1.1B) and 1177 Sixth ($572M). The data says liquidity is back; behavior says confidence has returned. “The flywheel has started moving,” an investment-sales principal noted. The significance for CRE: price discovery is shifting from defensive bid-ask posturing to executable prints, which become the new underwriting scaffolding for Q4–Q1. On balance, this is a floor-finding moment—not a full-cycle rally.

Meanwhile, the buyer/seller roster mattered as much as the numbers. State pensions (STRS Ohio, CalSTRS) exited; sovereign wealth and blue-chip operators (Norges, Beacon, RXR/Elliott) stepped in. Data point: 1177 Sixth closed at ~$572M with Norges at 95% JV share; 590 Madison cleared at ~$1.1B. Insight: when long-duration capital leads, underwriting standards tighten and certainty of close improves.

As a result, Q3 trades form fresh Midtown comps. Brokers report pricing stabilization; the quarter’s prints replace stale 2022–2024 guides. The spread story: lenders have selectively sharpened pencils for high-quality sponsorship, aiding execution on core assets. Implication: acquisition models should anchor to Q3 close data (price/SF, stabilized occupancy, WALT) and embed higher capex/rollover loads than pre-2020 norms. Still, cap rates will remain bifurcated by lease term and credit

By contrast, development sites surged nearly +2,000% QoQ in dollar terms, driven by a marquee Fifth Avenue condo bet and tax-incentivized outer-borough land deals. Data → behavior: capital is underwriting option value where policy and tax structures help bridge feasibility gaps. Implication: expect mixed capital stacks (pref + senior + JV) and milestone-based closings while entitlement, cost of capital, and exit pricing normalize. For now, shovel-ready scarcity supports pricing discipline

Nonetheless, the fulcrum for underwriting is near-term rollover. Q3 trades cleared with institutional tenants and credible WALT; that’s the tell. In practice, buyers are reserving heavier TI/LC and underwriting lower re-trade rents to keep DSCR resilient through 2026 maturities. Implication: assets with 2026–2028 expirations concentrated in a few tenants must clear at wider cap rates—or come with structured capital that cushions the dip in NOI before the recovery

Nationally, the sales tape strengthened into mid-2025, and institutional activity is rising—even if sector rotation persists. If policy rates plateau and volatility eases, prime Manhattan offices could see incremental cap-rate compression as capital crowds tighter, while non-core offices drift wider given leasing risk and capex drag. Watch for additional headline trades (e.g., Park Avenue assets) to confirm depth beyond two trophies. For now, expect liquidity to broaden cautiously to hospitality and select retail as the 2025 pipeline closes and 2026 funds reset targets. The base case: a disciplined thaw—more prints, still selective, with structure doing heavy lifting