Multifamily vs. Office: Which Hudson Valley Asset Performs Better? 🏢🏘️

Jul 11

Choosing between multifamily and office properties in the Hudson Valley can feel like picking the winner in a heavyweight bout. At Birchwood Property, we guide commercial investors, landlords, and tenants with insightful data and strategic positioning—helping you make smarter decisions for a resilient and profitable portfolio in 2025.

1. Performance Snapshot: Multifamily vs. Office

Multifamily

U.S. vacancy stabilized around 4.8–5.0% in Q1 2025, near decades-high occupancy -kinexio.io & chase.com.
National rent growth ~2.6% annually; Hudson County’s cap rate averaged ~5.3–6.0% in early 2025 .

Office

U.S. office vacancy remains elevated (~20% in Q3 2024), but Class A spaces showing signs of recovery.
Westchester County office vacancy spiked to 26% in Q1 2025.

2. Rent Ranges & Vacancy in the Hudson Valley

| Asset Class   | Typical Rent (PSF)          | Vacancy Rate (HV)            |
|---------------|-----------------------------|------------------------------|
| Multifamily   | $2.00 – $3.50 PSF/month     | ~5.8% (normalized)           |
| Office (Suburban) | $18 – $25 PSF/year      | 18–26% (Class B); Class A slightly lower but stable |

Key pipeline projects:

Poughkeepsie multifamily/mixed-use: pre-leasing at $2.50–3.00 PSF/mo, strong interest from commuters.
Newburgh–Beacon office/retail corridor: older B/C buildings offered at 7–9% cap yields.

3. Notes:

Citing CBRE and Cushman & Wakefield, we note:
“Class A office buildings continue to outperform” in Q1 2025 -NYPost.com.
Kinexio states that multifamily, retail, and industrial sectors “stay strong in 2025…“ mf.freddiemac.com+2kinexio.io+2cbre.com+2.

4. Local Influences & Tourist Data

Hudson Valley tourism produced $2.5 billion in labor income in 2023, providing sustained support for retail and hospitality tenants .
Creative professionals drawn to the region—a sizable upswing in rent-paid creative-class households, per Hudson Valley One hudsonvalleyone.com.

5. Gateway Market Comparisons

| Market          | Multifamily Vacancy / Rent  | Office Vacancy / Rent        |
|-----------------|-----------------------------|------------------------------|
| Manhattan       | ~3%; avg rent $3,900/mo     | ~17%; Class A rent $50–60+ PSF |
| Boston          | ~4%; $2,800/mo              | ~15%; $35–45 PSF             |
| Hudson Valley   | ~5.8%; $2,500/mo (~$30k/yr) | ~20%; $18–25 PSF             |

Trivia: MF vacancy in NYC (~2.8%) is one-third the national average (~8%) .

6. Strategic Takeaways for Investors

Multifamily offers reliable cash flow, low risk, and consistent occupancy—ideal for long-term investors.
Office (especially Class A suburban) can yield higher returns but comes with vacancy risk and operational complexity.
Mixed-use investments combining both can provide income diversity and hedge against single-sector downturns.

7. Call to Action

At Birchwood Property, we specialize in local asset sourcing and analysis:

Multifamily underwriting & feasibility
Office repositioning & repurposing evaluations
Custom portfolio advisory & acquisition support

➡️ Request a personalized consultation today to explore your next investment.

✅ Summary

Multifamily: Strong performance, stable rents, near 5–6% cap rates.
Office: Recovery in progress, but vacancy still near 20%; best-in-class spaces leading recovery.
Investor strategy: Diversify with hybrid assets; lean into multifamily and quality offices for balanced yield and growth.

Scott Boyd