By Michael Bull | America’s Commercial Real Estate Show
New York City has always been a bellwether for commercial real estate. When conditions tighten, New York often feels it first—and when recovery begins, New York frequently leads the way.
In a recent episode of America’s Commercial Real Estate Show, I sat down with Bob Knakal, Chairman & CEO of BK Real Estate Advisors (BKREA), and Rod Santomassimo, one of the world’s leading commercial real estate broker coaches and founder of The Massimo Group. Together, they shared decades of insight into selling buildings, identifying highest and best use, and navigating one of the most complex real estate markets in the world.
What followed was a masterclass in New York commercial real estate trends, investment strategy, and broker specialization—with lessons that apply far beyond Manhattan.
New York City is not just another market—it is a global real estate laboratory.
It often experiences downturns earlier than other markets
It frequently recovers sooner
It reveals structural shifts long before they appear elsewhere
From office conversions to land redevelopment, New York’s market dynamics provide a preview of what investors and brokers across the U.S. may encounter next.
Bob Knakal recently released a bestselling book, Selling Buildings, co-authored with Rod Santomassimo. The book distills Bob’s 42-year career selling New York City buildings, including:
Over 2,380 buildings sold
Market cycles spanning four decades
Lessons from the good deals, bad deals, and everything in between
Rather than a how-to manual, Selling Buildings is a strategic playbook—combining real deal stories with broker takeaways and investor insights.
Real transaction stories tied to market cycles
Broker lessons on pricing, positioning, and negotiation
Investor insights on timing, risk, and maximizing value
Commentary from Rod Santomassimo on applying these lessons today
For brokers, investors, and developers alike, the book offers practical wisdom that only comes from experience.
One of the most important themes discussed was highest and best use—and how it constantly changes.
Bob shared an example of a single Manhattan building that evolved over time:
Built as an apartment building in the 1920s
Converted to office use in the 1950s
Sold and redeveloped into a hotel in the 1990s
Now best suited for conversion back to residential
This constant evolution is why opportunity often lies in underutilized assets.
Real estate is not just a property business—it is an information and relationships business.
Investors who deeply understand:
Zoning
Density
Market demand
Alternative uses
…are best positioned to unlock hidden value.
In Manhattan, there are no vacant pastures waiting for development.
Land is created, not found.
Developers create new opportunities by:
Identifying buildings built far below allowable density
Demolishing obsolete structures
Redeveloping sites to their maximum legal potential
In New York’s as-of-right zoning environment, investors know upfront:
What can be built
How much density is allowed
The shape and scale of the building
This eliminates much of the entitlement risk common in other U.S. markets.
Not all sectors are moving in the same direction. According to Bob Knakal, today’s New York market is highly fragmented.
Hotels (currently the hottest sector)
Retail
Industrial
Development Land
New construction Class A office
Free-market multifamily
B and C office buildings
Rent-regulated multifamily properties
Rent-regulated assets in particular have experienced value declines of 65%–75%, creating what Bob describes as “zombie buildings”—properties with impaired debt, no equity, and little incentive for owners to invest.
One of the most promising developments in New York is the large-scale conversion of obsolete office buildings into housing.
Currently:
57 office buildings in Manhattan are being converted
23.7 million square feet of office space is transitioning to residential use
This trend:
Reduces office vacancy
Adds desperately needed housing
Helps stabilize values across sectors
The key driver? Well-designed tax abatements that finally align public policy with private-sector economics.
Construction lending in New York has become increasingly relationship-based.
Bob noted:
Hundreds of active construction projects
Only a handful of lenders with multiple active loans
Most lenders involved in just one deal
This reinforces the importance of:
Deep lender relationships
Broker specialization
Market credibility
Rod Santomassimo emphasized a principle he teaches consistently:
Specialists outperform generalists.
Whether you are:
A broker
An investor
A developer
Focusing on a specific product type or niche allows you to:
Command better pricing
Avoid fee compression
Deliver superior outcomes
Bob’s career is a case study in the power of focus—having represented only sellers for his entire career and remaining agnostic to who the buyer is.
Looking ahead, both guests see strong opportunity—but not uniformly.
Increased transaction volume
Rising values in most sectors
Continued stress in rent-regulated multifamily
More redevelopment and conversion activity
Growing importance of broker insight and specialization
As long as market participants hold differing opinions on value, deals will happen.
As the year closes, Rod offered advice that applies to every real estate professional:
Review and reflect
Reposition your strategy
Refine your focus
Step off the transaction treadmill
The most successful professionals deliberately take time to work on their business, not just in it.
America’s Commercial Real Estate Show delivers market intelligence, forecasts, and strategies from top industry experts across the U.S. and around the world.
🎧 Learn more at CREShow.com
🌎 Sponsored by TCN Worldwide Real Estate Services
🏢 Produced by Bull Realty, Atlanta, GA