Valuing through complexity: A look at NYC’s evolving multifamily market

I’ve been working in commercial real estate in New York City for more than 15 years, and it is unlike any other market. Its density, regulatory layering, neighborhood dynamics, and the depth of the investor pool make it among the most complex and closely watched real estate environments in the world.

I’m excited to have joined Apprise by Walker & Dunlop as we expand into New York City to provide clients with timely insights as the market continues to explore several notable regulatory evolutions that affect investment and development considerations. The following gives a brief overview of salient market themes:

City of Yes: more flexibility, new implications for land

The City of Yes is the largest change to the zoning code in many years and was broadly intended to increase housing supply by providing greater flexibility regarding bulk and density at most sites. Such has increased development considerations at many sites, inclusive of many small sites that previously had minimal development potential. For other sites, a fresh look indicates different development potential based on the possibility of creating more rental units in conjunction with decreased parking requirements.

485x: renewed development energy, cautiously applied

After a lengthy interim period, the 485x program was instituted as a replacement of the 421a program. The market continues to explore the program carefully, and shifts in development programs have started to emerge. In conjunction with the City of Yes, the development dynamics of each site require a hard look, with careful consideration of specific locations and site characteristics.

Local Law 97: Mandatory Environmental Compliance

The first compliance deadline for Local Law 97 was at the end of 2024, but many properties were eligible for various extensions. Emission thresholds will tighten significantly in 2029, requiring adequate capital planning for many assets.

Rent stabilization and Good Cause regulation continue to evolve

The regulatory landscape remains challenging. Minor 2024 updates to the rent stabilization laws were not a meaningful change, and investor headwinds in place since 2019 remain a concern. Conversely, there is investor interest given that current asset pricing compares favorably to near-term historical pricing.

For other previously unregulated assets, Good Cause Eviction has introduced a limited degree of limits on potential rent increases for unregulated units built before 2009, with staged applicability scheduled for newer buildings 30 years post construction.

Why I joined Apprise now

Joining Apprise and helping lead its NYC expansion is a natural fit for me. I’ve worked in this market my entire career and have worked on numerous large deals and major developments for a wide range of clients. Valuation is never a simplistic process, as every project requires understanding the local regulatory pulse, the nuances of submarkets, and shifting investor motivations. Apprise brings a technology-forward, data-rich approach to valuation, in conjunction with local focus. Our expansion into New York will offer clients real time on the ground knowledge, in conjunction with national data.

What this means for our clients

At Walker & Dunlop, we pride ourselves on being insightful and tenacious in everything we do. By bringing Apprise to New York City, we’re reinforcing that commitment. We’re here to help our clients make better decisions, whether that’s structuring a deal, underwriting a loan, or reassessing a portfolio, particularly with regard to the impact of market dynamics and regulatory forces.

The NYC market is always evolving, but changes in recent years have not merely been business as usual. I’m proud to be part of a team that’s expanding to meet the moment.

If you’re navigating these shifts and need a valuation partner who understands the full picture, let’s talk.