By: Jordan Baker

On paper, 2026 is shaping up to be a blockbuster year for New York City’s commercial real estate market. But beneath the rosy projections, warning signs are quietly piling up, according to a broad look at the sector as NY Post reported.

There’s no denying the positives. Throughout the past year, indicators of a strengthening market were everywhere, as NY Post reported. Office vacancies have narrowed, sublease space has dropped sharply, rents have inched upward, and New York’s return-to-office momentum has outpaced nearly every other major U.S. city.

Confidence has come from major players. Jane Street Capital, Guggenheim, and Amazon all expanded their footprints, while Bloomberg LP extended its Manhattan leases through 2040 — a powerful vote of confidence in the city’s long-term future, as NY Post reported. Developers also secured approvals for new towers at 350 Park Ave. and 343 Madison Ave., and the city saw its first $1 billion-plus office sale in five years with the blockbuster deal at 590 Madison Ave.

Hotels are humming again, and a surge in residential conversions has scrubbed the market of dozens of obsolete Class B office buildings, tightening supply, as NY Post reported.

But for all the optimism, the city’s landscape tells a more complicated story.

Across Manhattan, prime development sites remain stubbornly vacant as developers wait for financing or elusive anchor tenants that may never materialize, as NY Post reported. Compared with London — New York’s closest global rival — Manhattan has an outsized number of empty pits and stalled lots.

West 57th Street alone has at least five barren parcels. Similar dead zones line stretches of First Avenue below the United Nations, parts of Madison and Park avenues, and even thriving Sixth Avenue between West 44th and 45th streets, as NY Post reported.

Downtown, the most glaring void remains the unfinished Two World Trade Center site. Until developer Larry Silverstein lands a major anchor tenant like American Express, the full recovery of the World Trade Center campus will remain frustratingly incomplete, as NY Post reported.

Several iconic properties fall into a troubling gray area between vacant and viable. The former Roosevelt Hotel remains in limbo as owner Pakistan International Airlines weighs its options after JLL exited as sales agent. The Chrysler Building continues to lose prestige as Cooper Union struggles to find a developer capable of absorbing the soaring cost of its ground lease, as NY Post reported.

The South Street Seaport has also lost momentum following its spinoff into Seaport Entertainment Group. The Tin Building is scaling back, gimmicky attractions are displacing local restaurants, and the fate of the nearby 250 Water St. site remains uncertain.

Retail conditions further undercut the upbeat surveys issued by industry groups that tout reduced “availability” while ignoring what pedestrians actually see, as NY Post reported. The former Barneys flagship at 660 Madison Ave. has sat dark for six years.