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The city’s top 5 December leases alone totaled almost 1M sf
In December 2024, office leasing saw several significant developments, with the top 5 December leases totaling almost 1 million square feet of rented space. WeWork, a co-working company, signed a massive new lease in the Penn Plaza building on behalf of Amazon, Winston & Strawn, a law firm, renewed their lease in the MetLife building, Alvarez & Marsal, a business management consulting firm, signed a new lease in the Grand Central building,. The Travelers Companies, an insurance company, signed a 10-year lease renewal in the Grand Central building,.
Authentic Brands Group, a brand management company, signed a new lease in the Garment District building,. Metropolitan Commercial Bank signed a new 15-year lease in the Murray Hill building,. Sciame Construction signed a 20-year renewal in the Financial District building,. Andreessen Horowitz signed a new lease in the Soho building, replacing former tenant Chobani. William Grant & Sons signed a new lease in the Flatiron building. Fidelity signed a new lease in the Plaza District building.
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Ownership plans $300M renovation of Murdoch-dominated building
RXR has acquired a 49 percent stake in Ivanhoe Cambridge's 1211 Sixth Avenue, a Midtown office tower dominated by Rupert Murdoch's media empire. The property, valued at $1.2 billion, was purchased by Ivanhoe and Callahan Capital Properties over two separate stake sales. RXR and Ivanhoe Cambridge plan to invest $300 million in renovating the 45-story tower, including updates to the lobby and plaza, as well as the addition of a wellness center. The renovations are part of a lease agreement with Murdoch's Fox Corporation and News Corporation.
Rechler's firm will also provide education workshops and wellness initiatives. The first challenge for RXR as a member of the ownership group is a $1 billion loan due to mature in August. RXR is covering 49% of the renovation costs and debt. Fox and News Corp. signed 20-year renewals for their respective headquarters at 1211 Sixth Avenue two years ago. Ivanhoe recently lost one of the building's top tenants, law firm Ropes & Gray, which is set to move to 430,000 square feet at 1285 Sixth Avenue, owned by RXR.
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Namdar Realty Group and Empire Capital have sold 345 Seventh Ave. for a nearly 21% haircut, less than a year after facing foreclosure. The Katan Group, in partnership with Kohan Retail Investment Group and investor Ilya Mikhailov, paid $85M for the Midtown property. The century-old building and other properties span 75% of the entire block between West 29th and West 30th streets. The sale is an example of how far values have fallen for office buildings that are considered below Class-A quality.
Namdar and Empire bought other distressed properties, such as 830 Third Ave. in 2022 and 321 W. 44th St. last year, for a roughly 67% discount to the previous sale price. Many older office buildings could be converted due to changes under City of Yes, which passed at the end of last year. The 25-story tower at 345 Seventh is also in the area of Midtown South that the Adams administration is looking to rezone to allow commercial buildings to be turned into residential uses.
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A lawsuit filed in Manhattan's Supreme Court has exposed the relationship between Cushman & Wakefield and the New York City official responsible for the city's real estate decisions. The complaint alleges that Jesse Hamilton, the deputy commissioner for real estate services at NYC's Department of Citywide Administrative Services, pushed for a Cushman & Wakefield broker with whom he has a personal relationship to be put in charge of the city's lucrative $1.5B account, disregarding more qualified candidates. JRT Realty, a woman-owned real estate services firm, is suing Cushman & Wakefield for defamation and interfering in its relationship with its client.
JRT had a deal with Cushman to manage the city's real estate deals and collect roughly 34% of the commissions as the minority-owned business enterprise. However, last year, it was iced out of conversations and future deals, according to the complaint. JRT Realty, founded by Jodi Pulice, has served as the M/WBE representative for Cushman on the DCAS account since 2012, although the two firms have had a strategic agreement in place since 2003. The relationship soured in August 2023 when Cushman's former head of the DCAS account, Robert Giglio, was replaced with Boutross, a broker whose experience is largely concentrated in retail.
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Williams Equities has acquired 470 Park Ave. S., a historic 300K SF office property in Manhattan's Midtown South submarket, for $147.5M. The property, also known as the Silk Building, was sold for $245M by SJP Properties and PGIM Real Estate two years before the pandemic. The buyer, Michael Cohen, a third-generation principal at Williams Equities, sees the opportunity to make long-term investments that will position them well for the next cycle and beyond. The firm also owns 136 Madison Ave., 28 and 40 W. 23rd St. The building features prewar architecture, two loft-style office towers, and has received upgrades to offer tenants modernized systems and interiors. The buyer intends to make further capital improvements. The building features prewar architecture, two loft-style office towers, and has received upgrades throughout its lifetime.
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Tishman Speyer Properties and a partner will collect nearly $1 billion in cash from The Spiral when the Hudson Yards tower's mortgage is refinanced later this month. The success of The Spiral, which opened only three years ago, highlights why rival Manhattan developers are eager to build new office towers at a time when many Manhattan buildings struggle to retain tenants and are exploring ways to convert into apartments. The success has attracted many would-be imitators, with RXR Realty and BXP aiming to develop new towers around the block, Vornado Realty Trust and Rudin Management planning to build a new tower for Citadel, and Related Cos. seeking permission to develop a casino and additional towers at the 17 million square-foot site.
Hudson Yards has attracted large financial institutions and law firms from Midtown, with average asking rents of $137 per square foot being double the average in Manhattan. The highly profitable tower benefits from a generous property tax discount granted by the city many years ago to incentivize developers to build on what had been a rail yard. Under the terms of The Spiral's refinancing, the building will take out a $2.85 billion five-year loan at an expected fixed interest rate of 5.85%.
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Agency leases 139K sf near JFK airport, citing “high-level security infrastructure”
The U.S. Customs and Border Protection and Queens has signed a 139,000 square foot lease at Edward J. Minskoff Equities’ One Aviation Plaza in Jamaica, with the lease transacted through the General Services Administration. The agency will be relocating from Building 77 at the John. F Kennedy International Airport and will occupy the first three floors and part of the fourth at One Aviation Plaza, sharing the property with the Federal Aviation Administration. The lease length and asking rent were not disclosed. In-house representation from Minskoff’s Jeffrey Sussman. The location was logical for CBP due to accessibility to the airport and “high-level security infrastructure.” The GSA’s maneuvers in recent years have shifted towards office space reduction, with the government releasing a plan to dispose of 23 properties nationwide in 2023.
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Mack Real Estate suing over alleged $223M debt at 250 West 43rd Street
The Chetrit Group, a Manhattan-based real estate company, is facing foreclosure due to alleged debt defaults. Mack Real Estate Credit Strategies filed a lawsuit against Joseph and Meyer Chetrit in Manhattan state Supreme Court, alleging they owe $223 million for three mezzanine loans secured by the property. Mack is requesting a summary judgment next month. If the Chetrits fail to settle their debts, the lender could initiate a UCC foreclosure against the 22-story hotel, once voted as the dirtiest hotel in the city.
Joseph Chetrit's lawyer is aiming to postpone the February court date by two months. Mack sued in September to collect a $6.5 million personal guarantee for one of the mezzanine loans, which they allegedly defaulted on in August. The Chetrits purchased the hotel in 2015 for $192 million and planned to renovate the property. Joseph Chetrit also allegedly defaulted on a $19 million mortgage attached to his own Upper East Side townhouse. Joseph and Meyer Chetrit's brother, Jacob, died this month at 69 years old.
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First major single-asset, single-borrower deal of its category in 2025
Tishman Speyer and Henry Crown are undergoing a $2.65 billion bond sale to refinance their Hudson Yards office tower. The sale is expected to conclude by the end of the week, making it the first major single-asset, single-borrower bond sale tied to commercial mortgage-backed securities this year. The proceeds will refinance existing debt, including a $1.37 billion construction loan and $216 million tied to EB-5 investors, go towards tenant reserves and return equity to the sponsor.
An additional $200 million in debt is expected to be securitized in future deals. The Tishman Speyer property is a popular choice for tenants looking to find a home in a trophy office building. In October, private equity giant TPG agreed to take 301,000 square feet across eight floors, one of the largest office leases in Manhattan that month. The building opened in 2023 and has tenants such as HSBC's US headquarters, Pfizer, Debevoise & Plimpton LLP, AllianceBernstein, Turner Construction, and Marshall Wace.
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These were 2024’s top NYC investment sales. What do they mean for 2025?
The biggest investment sales of 2024 in New York City were characterized by deep discounts, mortgage problems, and optimism. Some of the largest sales involved maturing mortgages that were difficult to refinance or other issues behind the scenes with lenders. However, the industry had its share of big price tags that gave it something to smile about. Jeff Sutton's sale of 715 Fifth Avenue (nearly $1 billion) had the retail sector buzzing, while SL Green's sale of a stake at One Vanderbilt penciled out to a $4.7 billion valuation, making it possibly the most valuable office building in the country. The top 10 New York City investment sales of 2024 totaled $4.6 billion, slightly lower than 2023's total of $4.8 billion.
The top 10 CRE sales include 715-717 Fifth Avenue, 625 Madison Avenue, 980 Madison Avenue, 320 Park Avenue, 250 Park Avenue, 180 Maiden Lane, 119 West 56th Street, 700 Eighth Avenue, and SL Green's sale of a stake at One Vanderbilt. Sutton's sale of 715-717 Fifth was a sign-and-close deal that happened quickly without a deposit or contract period. The high drama surrounding 625 Madison Avenue closed one chapter and opened a new one with SL Green's sale of the Midtown office building to Related Companies. The German reinsurance giant Munich RE took full ownership of the building when it bought out its partner, Mutual of America. The deal valued the tower at around $700 million. The top 10 New York City investment sales of 2024 included 715-717 Fifth Avenue, 625 Madison Avenue, 980 Madison Avenue, 320 Park Avenue, 250 Park Avenue, 180 Maiden Lane, 119 West 56th Street, 700 Eighth Avenue, and 119 West 56th Street.
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