Chosen Signature Bid Was 36% Less Than Auction Winner: FDIC
More than a year after controversy surrounded the Federal Deposit Insurance Corporation’s selection for a highly coveted Signature Bank loan portfolio, a clearer picture has emerged showing the true disparity between the winning bid versus those that pitched far higher amounts.
A bid summary released by the FDIC March 11 outlining the 2023 sale of a 5 percent equity stake in Signature’s nearly $6 billion rent- regulated portfolio in the New York metro area showed the $129.3 million winning bid was 36 percent less than the highest offer.
The winning bid, led by Community Preservation Corporation (CPC) in concert with Related Fund Management and Neighborhood Restore, was $47.1 million lower than a $176.4 million offer made by Brookfield Asset Management in partnership with Tredway, according to the FDIC documents.
But the Brookfield-Tredway bid was not the only one that surpassed CPC and Related. The FDIC bid summary also
showed figures of $174.5 million and $172.8 million with the names of the bidders not included. There was also one other slightly higher bid of $130.8 million from an undisclosed bidder.
Sources previously told Commercial Observer of three other failed bids that were north of 80 cents on the dollar, compared to the winning bid, which was 59 cents on the dollar. In addition to the Brookfield-Tredway bid, there were also substantially higher bids from multifamily investor Skylight Real Estate Partners in partnership with Rithm Capital as well as a proposal from Brooksville Company and Sabal, according to sources.
New York Mayor Eric Adams’s administration endorsed the CPC, Related and Neighborhood Restore bid and sent a letter to the FDIC in late November 2023, citing the trio’s experience with rent-regulated and affordable housing in the Big Apple.
In response to reports that surfaced in November 2023 of the FDIC selecting a winning bid that was far lower than the loan
portfolio’s value, Brookfield sent a letter to the FDIC accusing the agency of running a “secret” process. The letter noted that the FDIC had indicated it would not give preference to proposals with support from political leaders, with pricing being the main factor of who would be selected.
The Signature loan portfolio the auction addressed included 868 permanent loans secured by properties with nearly 35,000 units, with 80 percent of the apartments rent-regulated. The pool comprised a large chunk of the roughly $15 billion Signature had tied to rent-stabilized or
rent-controlled assets before the bank collapsed in March 2023.
Changes to New York state’s rent laws in 2019 crushed the loans in the rent-regulated portfolio. Those changes placed strict limits on future rent increases at rent-stabilized properties. Then came the Federal Reserve aggressively hiking interest rates starting in early 2022.
Officials at Brookfield, CPC, Related Fund Management, Neighborhood Restore and the FDIC did not return requests for comment. Tredway declined to comment. —Andrew Coen
Park Tower Group Advances More Greenpoint Buildings
ONGOING:
The 22-acre Greenpoint Landing has been under development for 20-plus years.
LEE/GETTY IMAGES
Park Tower Group appears to be tacking onto its 11-building Greenpoint Landing residential development.
Park Tower Group, which is developing the 22-acre riverfront project in Greenpoint, Brooklyn, has filed plans for three new buildings comprising 1,025 additional residential units at the property, according to an application last week with New York City’s Department of Buildings
Anne Carson Blair of Greenpoint Riverview Associates, also chief operating officer at Park Tower Group, is listed as the owner in all three applications, according to the filings.
In the first filing, Handel Architects’ Gary Handel submitted a new construction project for a 399,685-square-foot, 40-story building at 21 Freeman Street with a total of 503 residential units.
In the second, Handel filed plans for a new 221,808-square-foot, 30-story building at 37 Freeman Street comprising 298 total residential units, according to the filing.
In the last filing, Handel submitted a new
construction project for a 172,129-square-foot, ninestory building with 224 total units at 209 West Street
Park Tower Group declined to comment. PincusCo first reported the news
The three new building filings would join the 11-building, 5,500-unit master plan for the Greenpoint Landing community. The first phase of construction was completed in 2005, and the most recent 41-story tower at 16 Dupont Street, developed in partnership with Rockefeller Group, opened last year.
The East River waterfront project is also set to include 1,400 affordable units and 5 acres of public open space, according to the New York City Department of Housing Preservation and Development (HPD).
Last April, the HPD announced that 374 units of affordable housing opened at Greenpoint Landing at 35 Commercial Street — 57 of which were set aside for formerly homeless applicants, according to a press release at the time.
It’s unclear when the three new buildings will be completed. —Isabelle Durso
IN THE ROOM: Martin Gruenberg was FDIC chairman when the agency selected the winning bid.
KEVIN
MICHAEL
Dustin Stolly Joins Walker & Dunlop’s Capital Markets Team
Dustin Stolly has joined Walker & Dunlop’s capital markets team in New York as a senior managing director, alongside Aaron Appel, Keith Kurland, Jonathan Schwartz and Adam Schwartz, Commercial Observer can first report.
March 10 was Stolly’s first day with the company, and the move represents a reunion for the fivesome, who were previously teammates at JLL
“The addition of Dustin to our exceptional New York capital markets team is simply fantastic and will drive significant growth in our debt and equity placement across the country,” Willy Walker, chairman and CEO of Walker & Dunlop, said in prepared remarks.
Stolly, one of the heaviest hitters in the advisory world, was most recently co-president of debt and structured finance at Newmark. He joined the brokerage in 2017 after a decade at JLL, where he closed $25 billion of capital markets transactions, and left Newmark in October 2024.
Over his career, Stolly has closed more than $100 billion in transactions and made a name for himself tackling the most complex of financings, equity raises and joint ventures.
As such — just like his new fellow senior
managing directors at Walker & Dunlop — Stolly has been a consistent honoree on Commercial Observer’s Power Finance list over the years. In the 12-month period ending March 31, 2023, Stolly co-facilitated more than $29 billion of loans and $5.18 billion of equity plus $1.3 billion of loan sales alongside Jordan Roeschlaub, Stolly’s fellow Newmark co-president of debt and structured finance. The two also led the brokerage’s charge into equity raising for both platform and programmatic JVs in 2023.
In 2024, W&D’s capital markets group arranged capital totaling $16 billion from non-agency lenders, and represented many of the commercial real estate industry’s top developers, owners and operators. The hiring of Stolly highlights the firm’s “commitment to attracting top-tier talent and growing market share,” according to a release.
“Walker & Dunlop represents everything I am looking for in my next chapter — scale, vision and a relentless drive to lead the industry,” Stolly said. “Willy and the leadership team have built an incredible platform, and the opportunity to partner with Aaron, Keith, Jon and Adam is second to none.” —Cathy Cunningham
Brooklyn Developer to Raze Upper West Side Building
A Brooklyn-based developer has filed plans to demolish a 105-year-old building on the Upper West Side that was once home to a branch of the now-defunct First Republic Bank.
Aleksandr Finkelshteyn bought the four-story building at 2160 Broadway in December for $8.5 million, property records show Yaker Engineering CEO Aleksander Yaker, the engineer on the site, submitted an application earlier this month to tear down the modest 8,820-square-foot property, according to a filing with New York City’s Department of Buildings.
It’s unclear what Finkelshteyn plans to do with the site after it’s demolished, but JLL, which brokered the sale of the building, said in marketing materials that the site could accommodate a project of about 27,000 square feet.
Wells Fargo, acting as a commercial mortgage-backed securities (CMBS) trustee, sued J.P. Morgan Chase in federal court March 10, alleging false financial statements that resulted in investor losses for a $481 million loan issued in 2019.
The complaint, which was filed in the U.S. District Court for the Southern District of New York by Wells Fargo through special servicer Situs Holdings, alleges that J.P. Morgan was aware of “dramatically inflated” financial information
when it originated the loan six years ago for the Chetrit Group’s acquisition of 43 multifamily assets.
Wells Fargo, the investors’ trustee for the single-borrower JPMCC 2019-MFP CMBS deal, claims in the lawsuit that Chetrit “massively overstated” historical net operating income (NOI) figures for the properties by 25 percent. The complaint claims that instead of demanding corrected NOI data, J.P. Morgan proceeded with the loan. The borrower eventually
defaulted in 2022 and still owes $285 million.
“The remaining properties that serve as collateral for the mortgage loan are worth far less than that outstanding amount,” the lawsuit states.
Wells Fargo is asking the court to require J.P. Morgan to repurchase the loan at the repurchase price or pay damages for breach of its contract. Wells Fargo and Chetrit Group did not return requests for comment. J.P. Morgan declined to comment. —A.C.
Finkelshteyn could not be reached for comment, while spokespeople for Yaker and JLL did not respond to requests for comment. Crain’s New York Business first reported the news Built in 1920, the building on the northeast corner of West 76th Street and Broadway was formerly home to an outpost of the Philadelphia-based First Republic Bank, which Pennsylvania regulators shut down in May 2023 over uninsured deposits, and which J.P. Morgan Chase acquired. —I.D.
BACK AT IT: Dustin Stolly has closed more than $100 billion in deals.
FUZZY MATH: Wells Fargo is accusing J.P. Morgan of originating the loan despite knowing that financials behind it were “dramatically inflated.”
James Nelson to Lead Avison Young’s New Sales Platform
Global real estate advisory firm Avison Young has established a national investment sales platform called USIS and appointed James Nelson to lead the new effort, according to a March 12 announcement.
Nelson, currently the firm’s leader of investment sales in the New York tri-state area, will be moving into the role of head of U.S. investment sales as part of the launch of USIS, which will “focus on assets in key U.S. markets across multifamily, office, retail and development sectors,” according to the announcement.
Nelson, who has already started in his new position, will operate the platform “within the framework of the firm’s overall capital markets business.” Marion Jones, principal and executive managing director of U.S. capital markets, will oversee the effort, according to the announcement.
Avison Young has also promoted two additional team members to help lead USIS: Erik Edeen as senior director and principal of U.S. investment sales and Traci Bidinger as director of marketing, the firm said.
Edeen will work with Nelson on national business developments, while Bidinger will focus on the “elevation” of Avison Young’s marketing on both the client and asset levels, according to the announcement.
Since joining Avison Young in 2018, Nelson has been involved in more than 225 sales valued at more than $3 billion, according to the firm’s website. In his entire 25-year career, Nelson has been involved in about 500 property and loan sales worth a total value of more than $5 billion. —I.D.
In Big Senior Housing Deal, CareTrust Buys Rival for $817M
A top U.S. health care real estate investment trust (REIT) is advancing into the United Kingdom after it acquired another REIT specializing in senior housing and care complexes.
Los Angeles-based CareTrust REIT purchased U.K.-based Care REIT on March 11 for $817 million. The deal valued Care REIT’s stock at $577 million — a 33 percent premium on the $25.81 share price Care REIT closed at on March 10 — and includes a debt assumption of $240 million.
Care REIT presently has 137 senior care complexes and 7,500 beds in a portfolio spread across England, Scotland and Northern Ireland. The REIT works with 15 different operators that lease their buildings, which carry an average remaining lease term of 20 years and an average occupancy of 89 percent.
Care REIT reported annual rent of $66 million as recently as September 2024, according to CareTrust. Dave Sedgwick, CareTrust’s president and CEO, said in a statement that his firm had been carefully monitoring Care REIT’s performance for a while as it waited “for the right entry point.”
Some REIT experts believe the deal positions CareTrust away from a U.S. health care marketplace that is poised for upheaval in the years ahead. The Trump administration and House Republicans are negotiating a budget that includes cuts to Medicare and Medicaid, potentially harming the reimbursement marketplace for senior housing and medical facilities.
“Health care is a sector going through ups and downs, but with the baby boomer population, there’s not enough supply for the upcoming growth of demand,” said David Auerbach, chief investment officer at Hoya Capital. “Medicare and Medicaid
is always an overhang domestically for these [U.S. REITs], so to expand across the border to reduce U.S. exposure to focus elsewhere on opportunities for growth, we’re for that.”
BMO noted the concerns around Medicaid reform in a note to investors.
Moreover, the deal comes as the U.K.
faces a growing demographic boom due to the post-World War II baby boomer population. There are currently 22 million people over the age of 50 in England, roughly two out of every five citizens, and that demographic is expected to grow by 19 percent between 2024 and 2044, according to AgeUK. —Brian Pascus
Extell Buys Lenox Hill Buildings for $103M, Plans Demolition
Gary Barnett ’s Extell Development has closed on the purchase of three Lenox Hill buildings that it plans to demolish to make room for a 37-story residential tower, according to city records made public March 11.
Extell, through the entity East 60th Townhouses, bought three buildings at 35, 37 and 39 East 60th Street from Solil Management, a company formed out of the holdings of the late Sol Goldman, for a whopping $103.3 million, records show.
Barnett signed for the buyer, while Jane Goldman signed for the seller, which used the entity 33-39 East 60th Street, according to records.
It’s unclear who brokered the deal. Spokespeople for Extell and Solil did not respond to requests for comment. PincusCo first reported the news
While Extell has not yet announced its exact
plans for the property — which the Goldman family had owned since at least 1980 — the developer filed plans last week to demolish 33-39 East 60th Street, Crain’s New York Business reported
The four properties, which are each five stories and cover a total of about 28,000 square feet, are around the corner from 655 Madison Avenue, which Extell purchased in October for $160 million and is also slated for demolition
It seems the East 60th Street sale is related to Barnett’s plans to build a 37-story, roughly 193,000-square-foot residential building at 655 Madison Avenue, complete with 62 apartments as well as office, retail and hotel space, Crain’s reported.
It’s unclear what will happen to current tenants of the buildings on East 60th Street, including Chinese restaurant Philippe Chow at 33 East 60th Street and Italian eatery Il Mulino New York Uptown at 37 East 60th Street. —I.D.
AGES AGO: The five-story properties had not sold since at least 1980.
FORWARD LOOKING: CareTrust bought Care REIT to diversify its holdings outside of the U.S.
COLUMNS
CHANGE AGENT
New York’s Condo Laws Can Unlock Value in Office Conversions
New York’s extensive inventory of obsolete or distressed office properties has investors and developers thinking big, as we New Yorkers tend to do.
Big ideas, as well as continued governmental flexibility in the form of additional tax incentives and zoning reform, will be necessary to create urgently needed new housing, rebalance the office sector, and revitalize the city. As the private sector continues to seek additional legislative change, it will take more than a low basis and a big idea to maximize opportunity and get the most out of an office conversion.
The enormity of many of the ripest targets for conversion resists a single viable solution, but the prospects for any office conversion — big or small — can be turbocharged by overlaying a condominium structure onto it. This allows a developer to treat an asset as a collection of discrete, individual components, minimizing risk, enhancing value, and unlocking opportunities in unexpected ways.
Condos are more than just your grandmother’s apartment or Beyoncé’s penthouse. When a property is made into a condo, it simply means that each component, or unit, becomes a distinct piece of property. Each piece has its own block and lot, a separate tax bill and a defined allocation of square footage owned (typically in a fee, but sometimes also as a leasehold) that can be financed, net leased, or bought and sold, as if it were a stand-alone asset.
The size, layout and complexity of many underperforming office properties in the city necessitates carefully curating the best mix of repurposed uses at the developer’s disposal, whether that’s market-rate or affordable rentals, for-sale apartments, a school, a dormitory, a health care asset, a storage facility, a hotel or even just signage. Crafting each component into separate legal parcels can be a powerful tool to minimize risk and maximize return.
Consider New York’s iconic Chrysler Building: Its age, condition, landmark status and sub- optimal configuration is a significant challenge — not just for office conversion, but also for any single use, residential or otherwise. However, a winning formula could be found in a combination of real estate uses that leverages the strengths of its various components, such as ground-floor retail on the busy street frontage, modernized offices on the wide floor plates of the podium, residential units in the airier mid-rise tower section, or a boutique hotel or restaurant in the narrow landmarked spaces in the upper floors.
The implementation of a condo structure would enable multiple stakeholders to own and operate within a building, with each owner or investor focusing on their particular needs, such as the asset type or use, yield targets, preferred hold periods, risk tolerance or tax requirements for the types of investments in which they can or want to engage.
A condo regime would also enhance the financeability of a property, as a lender could make a loan on a distinct component, such as on a multifamily or hospitality portion, as opposed to one secured by the entire property with its various uses and distinct operational risks. Extraordinary leasing flexibility can also be had with condos, including allowing not-for-profit tenants to qualify for real estate tax exemptions on leased space.
the Industrial and Commercial Abatement Program.
Other advantages that can be unlocked with this approach extend to nearly any benefit, requirement or condition that is tied to the particular use or square footage of the affected “property.” Local Law 97 is another example, where carbon allowances may be tied to the characteristics of a particular tax lot rather than to the entire physical structure.
This tailored approach to essentially stacking available benefits programs under one roof is made possible through a condo structure, and it can be a true force multiplier in stimulating the kinds of results the city and the real estate industry have been looking for to effect real change.
The city government’s increased flexibility creates more potential, as the City of Yes for Housing Opportunity zoning text amendment now allows some hotel uses above residential spaces, which was previously forbidden.
A condo structure, too, can more closely align available tax incentives and other programs with the optimal mix of uses in a building. For example, rather than dedicating 25 percent of an entire building to affordable housing using the 467m office-to- multifamily incentive program, a smaller multifamily component within the project could be isolated to capture the ideal mix of residential use to qualify. Meanwhile, a separate portion of the building more suitable for commercial space could then be outfitted to qualify for a preferred nonresidential program, such as
New York real estate will never get simpler to navigate — it will only ever get more complicated. Developers can do right by themselves and their partners by bringing all available tools to the table when taking on a conversion project or any present or future challenges presented to them by an ever-evolving real estate market and regulatory environment.
Condo law: Don’t leave home, or convert your office building, without it.
Jonathan H. Canter is a partner in the real estate group and co-chair of the condominiums practice at law firm Kramer Levin Naftalis & Frankel.
2025 EVENTS
Jonathan H. Canter.
Lease Deals of the Week
State Bank of India
41,700 New
Online retail giant Amazon signed a lease totaling 193,000 square feet at RXR and Walton Street Capital ’s 237 Park Avenue
“We continuously evaluate our corporate office needs to best serve Amazon’s businesses, employees and customers,” an Amazon spokesperson told Commercial Observer. The spokesperson added that Amazon expects “to occupy the space sometime this summer,” but would not elaborate.
It is unclear who brokered the deal for either party. RXR and Walton Street did not respond to requests for comment. Asking rent for the space at 237 Park Avenue was not provided, however Midtown office space averaged $78.41 per square foot in February, according to data from Colliers. The New York Business Journal first reported the deal.
Amazon has been on a bit of a shopping spree across New York City. In February, Amazon teamed with WeWork to sublease 112,265 square feet at Five Manhattan West, Commercial Observer previously reported. Amazon and WeWork also partnered on a 303,741-square-foot sublease at 330 West 34th Street. Amazon — which had about 350,000 corporate workers in 2023, according to GeekWire — announced in September that starting in 2025 all corporate employees would be expected to be back in the office “outside of extenuating circumstances” the full five days per week. Amanda Schiavo
Residents of Silverstein Properties’ 74-story Brooklyn Tower in Downtown Brooklyn will soon be getting a massive new health hub, complete with fitness centers, pools and spas.
Health and wellness brand Life Time, which operates health clubs in the U.S. and Canada, has signed a lease for approximately 80,000 square feet across seven floors of the 550-unit tower at 9 Dekalb Avenue, Life Time and Silverstein announced Tuesday.
“As we continue to expand our presence in New York City, we’re thrilled to work with the Silverstein team on this iconic development,” Parham Javaheri, president of club operations at Life Time, said in a statement.
The length of the lease and the asking rent were not provided, but a report from the Real Estate Board of New York found retail rents in Downtown Brooklyn averaged $175 per square foot in 2024 (the most recent data available).
Atlantic Retail ’s Joe Mastromonaco brokered the deal for Life Time, while Newmark’s Jackie Totolo represented Silverstein. Spokespeople for Atlantic Retail and Newmark did not respond to requests for comment.
Life Time’s new club at Brooklyn Tower is set to open in the second half of 2026 and be the brand’s largest location in Brooklyn, following two existing locations in Dumbo and Prospect Heights and seven others across Manhattan, according to its website —Isabelle Durso
Immersive arts and entertainment company Meow Wolf will open a massive new art exhibition at Seaport Entertainment Group’s Pier 17 in Lower Manhattan.
Meow Wolf, known for its psychedelic art and storytelling experiences, signed a 20-year lease for nearly 75,000 square feet across multiple floors of the Seaport District complex at 89 South Street, according to the landlord.
The deal represents Meow Wolf’s first East Coast outpost and seventh permanent exhibition, after debuting in Santa Fe in 2008 and opening locations in Las Vegas, Denver, Houston and the Dallas suburb of Grapevine, according to its website
“The Seaport is a place where New York’s history and future intersect, making it the perfect home for Meow Wolf,” Meow Wolf CEO Jose Tolosa said in a statement.
The asking rent was unclear, but a report from Cushman & Wakefield found retail rents in Lower Manhattan averaged $233 per square foot during the fourth quarter of 2024. CBRE’s Cassie Durand, Sacha Zarba and Aylin Gucalp brokered the deal for the tenant, while Mary Ann Tighe, Gerry Miovski, Evan Haskell, Brett Shannon, Zachary Price and Jacob Rosenthal — also from CBRE — represented the landlord.
Construction of Meow Wolf’s new space is expected to begin during the third quarter of this year, while an opening date has yet to be announced, Seaport Entertainment said. —I.D.
Commercial real estate financing firm Greystone has renewed its 50,000-square-foot lease at the Carnegie Hall Tower
The tenant plans to stay perched atop the TF Cornerstoneowned 152 West 57th Street, where it has been since 1993, for the foreseeable future, according to the landlord, which did disclose the exact length of the lease.
Asking rent in the building was $115 per square foot as recently as early February. Greystone occupies five floors, including the top floor of the 60-story office property that was completed in 1991 and renovated three years ago.
“Over the years Greystone has grown and thrived at Carnegie Hall Tower, cementing their place as a valued, long-standing partner.” Jake Elghanayan, senior vice president of TF Cornerstone, said in a statement. “Steve Rosenberg [founder and CEO of Greystone] was the first tenant to move onto the 60th floor and, by the end of this extended term, he and Greystone will have been there for almost 50 years.”
Matt Leon of Newmark negotiated on behalf of TF Cornerstone in the deal while it was not made clear who handled the deal for the tenant.
“Carnegie Hall Tower’s prime location in the heart of Midtown Manhattan, world-class office space and amenities and close proximity to leading restaurants and cultural venues offers an exceptional work environment,” Leon said in a statement. —Mark Hallum
The State Bank of India has leased the last remaining floors at L&L Holding’s 425 Park Avenue The bank leased 41,700 square feet on floors 33, 39 and 40 of the 47-story tower.
Each of the three floors spans 13,900 square feet and offers views of Central Park. Along with its worldwide offices, the bank currently has U.S. outposts in New York, Chicago and Los Angeles.
The India-based lender has been at 460 Park Avenue in roughly 33,436 square feet on the second and third floors, but that office building is now being renovated.
Along with the information on the lease, public records show the bank was seeking proposals from contractors to build out the new space, which it intends to occupy by the beginning of 2026. Records show Cushman & Wakefield was hired as the project manager.
Both Cushman & Wakefield and L&L Holding representatives declined to comment, citing non-disclosure agreements.
Industry sources said Michael Burgio of C&W represented the lender while L&L’s in-house team represented the building. Asking rents there have been in the triple digits with some rents hitting or over $300 per square foot. The length of the lease is not known. A plan on L&L’s website currently shows no office availabilities.
Among the other tenants is financial house Citadel, while its founder, Ken Griffin, has a perch on the top floor. —Lois Weiss
Lease Deals of the Week LEASES
38,652 Renewal
Spirits expert Shanken will not be stirred from its offices.
M. Shanken Communications, a media company whose brands include Wine Spectator and Whiskey Advocate, has renewed its 38,652-square-foot lease on the entire 33rd floor and part of the second floor at SL Green and RXR’s 825 Eighth Avenue, also known as Worldwide Plaza, Commercial Observer has learned.
The renewal term is for five years, a source close to the deal told CO. M. Shanken moved into one of Midtown Manhattan’s most recognizable buildings in 2014. Asking rent was not available, however the average asking rent for office space in Midtown was $77.89 per square foot for the 2024 fourth quarter, according to Colliers data
Newmark’s David Falk and Jason Greenstein represented M. Shanken in the deal. Newmark declined to comment on the lease renewal. SL Green represented the landlord in-house.
“We are delighted to extend our valued relationship with such a high-profile tenant,” Steven Durels, director of leasing and real property at SL Green, said via email.
Together, SL Green and RXR acquired a 49.9 percent stake in Worldwide Plaza back in 2017. (New York REIT Liquidating retains the remainder of the ownership.)
The deal comes just as a $940 million commercial mortgagebacked securities loan tied to 825 Eighth Avenue moves out of special servicing following a modification. —A.S.
The nonprofit Legal Aid Society has completed a deal at 60 Bay Street in Staten Island’s St. George neighborhood.
Legal Aid, the largest social justice law firm in New York City, signed a 15-year renewal and expansion for 29,467 square feet on the second, third and eighth floors of Muss Development’s 10-story building, according to the landlord.
It’s unclear how much space Legal Aid originally had at the building, but its Staten Island office is one of several locations across the five boroughs, according to its website
“The Legal Aid Society has long operated out of 60 Bay Street, and this expansion will enhance our ability to represent the people and communities we serve,” Legal Aid CEO Twyla Carter said in a statement to Commercial Observer. “We appreciate Muss Development collaborating with us on this expansion, strengthening our mission of providing critical legal services to low-income New Yorkers.”
Muss Development’s Bill Bergman represented the landlord in-house, while CBRE’s Christopher Mansfield, Craig Reicher, Greg Maurer-Hollaender and Julia Passante brokered the deal for Legal Aid.
A spokesperson for CBRE did not return a request for comment.
Muss’ 114,590-square-foot office building across the street from the Staten Island Ferry terminal is also home to the New York State Workers Compensation Board and business management consultant Maximus —I.D.
Snøhetta, a Norwegian architecture and design firm, is moving its New York City headquarters to 55 Washington Street , having signed a 25,000-square-foot lease at the Two Trees Management-owned Brooklyn building.
It is unclear when the firm will move from its current location at 80 Pine Street in Manhattan’s Financial District to the Dumbo office, where it will operate alongside other design firms that call the Brooklyn neighborhood home, including Bjarke Ingels Group, Garrison Architects and Post Company
The length of the lease and the asking rent were not disclosed. However, the average asking rent for office space across Brooklyn was $54.74 per square foot in the fourth quarter of 2024, according to CBRE data.
“Our new office space embodies the collaborative approach that defines our work in a location which fosters innovation and connection to explore new ideas alongside so many other talented design firms,” Elaine Molinar, partner and managing director at Snøhetta, said in a statement.
Snøhetta was represented by Jason Kroeger and Aron Schreier of Cushman & Wakefield
Alyssa Zahler of Two Trees Management represented the firm in-house in the deal. —A.S.
Coworking firm Industrious is working diligently to establish a presence on East 50th Street in Manhattan,. Industrious signed a 20,000-square-foot lease for the entire second floor of the Rudin-owned 560 Lexington Avenue, where members will have access to about 158 seats, the coworking firm and the landlord announced March 11.
The asking rent and the length of the lease were not disclosed, but Midtown office space averaged $78.15 per square foot in the fourth quarter last year, according to a report from Cushman & Wakefield
“We continue to see significant demand across our Manhattan locations and we’re excited to strengthen our network with the addition of a new location in Midtown,”
Douglas Feinberg, senior director of real estate at CBRE-owned Industrious, said in a statement.
“This new location also marks an expansion in our relationship with Rudin, with whom we have an existing location within Tribeca.”
C&W’s Justin Halpern, Ed Wartels and Ben Bouganim negotiated on behalf of Industrious while Rudin’s Kevin Daly handled the deal in-house for the landlord.
C&W did not respond to a request for comment.
Other tenants in the 22-story, 400,000-square-foot building include education software provider Schoology on the seventh floor. —M.H.
Swiss pharmaceutical company Novartis is staying put at its Midtown office right next to Bryant Park
Novartis has signed a fiveyear lease renewal for its 15,865-square-foot office on the entire 12th floor of Property & Building Corporation’s 10 Bryant Park, also known as 452 Fifth Avenue, according to tenant broker CBRE
“We worked closely with Novartis to secure a new lease extension that addressed the firm’s current and future real estate requirements,” CBRE’s David Stockel, who brokered the deal for the tenant, said in a statement. “Novartis chose to extend its lease because of its strong relationship with ownership and stellar property management.”
The asking rent was not provided, but a report from Colliers found office rents in Midtown averaged $79 per square foot in February.
JLL represented the landlord in the deal. Spokespeople for CBRE, JLL and Novartis did not respond to requests for comment, while a spokesperson for the landlord could not be reached for comment.
Novartis signed for its space at the Fifth Avenue building between West 39th and West 40th streets in January 2023. It represented the firm’s first New York City office.
Other tenants of the building include private equity firm 17Capital, investment house Brighton Park Capital and alternative investment company HBK Capital Management —I.D.
FINANCE
Debt Deals of the Week
Affinius Provides $50M Refi for Los Angeles Multifamily Apartment
Jamison Services has secured $50 million to refinance The Roya, a 157-unit multifamily complex that includes 10,000 square feet of ground-floor retail space in Los Angeles’ Koreatown neighborhood, Commercial Observer has learned.
Affinius Capital provided the financing. No broker was listed on the transaction.
Affinius Capital Managing Director Tom Burns said in a statement that The Roya is expected to benefit from the tailwind of strong demand, mainly due to its walkable location within central Los Angeles and the nearby shopping options.
“The property has already been well received by the market, and we expect it to continue to perform,” said Burns.
The Roya opened in 2023 at 760 Serrano Avenue, about 3.8 miles west of Downtown Los Angeles. Standing six stories and featuring 157 units, the property holds studio, one-bedroom and two-bedroom apartments. Amenities include a resident lounge, on-site coworking spaces, a fitness center, a karaoke room, and a pool deck and spa.
Jamison Realty did not respond to requests for comment.
Brian Pascus
Tamares Group Seals $505M CMBS Loan Extension for Times Square’s 1500 Broadway
Tamares Group just sealed a four-year extension for its $505 million debt package on 1500 Broadway in Times Square, Commercial Observer has learned.
With longtime tenants “Good Morning America” and Nasdaq leaving their spaces at the building this summer, the extension will allow the owner to prepare the trophy office property — with a premium location in Times Square’s bow tie between West 43rd and West 44th streets — for its next chapter.
“1500 Broadway offers a unique opportunity very few retail spaces and signs can compete with,” Tamares Group Chairman Poju Zabludowicz told CO. “We have owned this asset for 30 years. This is a new era, and we are feeling very positive about it.”
The debt on the property consists of a $335 million commercial mortgage-backed securities (CMBS) senior loan, and a $170 million mezzanine loan — held outside of the CMBS trust — from Nuveen. Both the senior and mezz loans have now been extended and the senior loan, once securitized in the TMSQ 2014-1500 single-asset, single-borrower (SASB) deal, is now securitized in the TMSQ 2024-1500 transaction.
Iron Hound Management’s Chris Herron , Anthony D’Amelio, Jack Casper and Will Forbes led the restructuring, with SL Green Realty advising Nuveen in the transaction. Rialto Capital is the CMBS special servicer in the transaction.
As part of the transaction, Tamares made a roughly $20 million equity infusion into the property, as well as a roughly $20 million payment for leasing and capex as part of the property’s stabilization.
The senior loan on the Times Square office building was transferred to special servicing ahead of its October 2024 maturity date. At the time, the building was sitting at around 75 percent occupied, with a couple of big lease expirations around the corner this year.
ABC ’s “Good Morning America” — which has filmed at 1500 Broadway since 1999 — is moving to Walt Disney Company’s new Hudson Square campus this summer, and occupies 66,000 of 1500 Broadway’s 520,000 total square feet. The studio space, with the famous backdrop of Times Square activity and
tourists, is perhaps one of the most famous studios in New York City.
Nasdaq, which leases 53,000 square feet at 1500 Broadway, is also moving out at the end of August to 150 West 42nd Street When those tenants leave, however, Tamares Group will have some top-tier, diversified space to offer new tenants.
“We are in preliminary discussions with some potential tenants for the Disney space,” Itrat Sayeed, a managing director at Tamares Group, told CO. “We’re also working on some concept plans for expanding the signage at the building. On the office front, we’ve seen a significant return for demand for office space. So all three of those fronts have very positive outlooks.”
There are plenty of pluses for a new tenant ready to say “Good Morning America!” or at least, “Good Morning Times Square!” in ABC’s studio space.
“The Disney space is on a corner and comes with great signage. The space has very high ceilings and can accommodate retail, experiential or studio tenants. The location, right in front of the [New Year’s Eve Times Square] ball drop, has one of the widest pedestrian plazas within Times Square. All of those aspects make it a very unique opportunity.”
Other tenants at the building include Ice Miller law firm and Shanghai Construction Group America
It’s not often that office buildings have a happy story to tell today, but Tamares Group was proactive in initiating a successful extension for its CMBS loan well in advance of its October maturity date. Sources said that all parties in the deal negotiated in good faith to make sure the property was adequately recapitalized and had enough term left on the loan to see the lease-up time through.
“Tamares Group recognized a need to begin conversations around an extension well in advance of the maturity of the loan, and demonstrated a commitment to the asset from the very beginning, as evidenced by a significant new capital investment towards the restabilization of this trophy office building in Times Square,” Iron Hound’s Herron told CO.
“All options are on the table for [the Disney] space, given its location and prime time Times Square frontage,” Herron added. —Cathy Cunningham
BHI Supplies $35M Construction Loan for Jersey City Apartments
Yuval Shram’s Tay Investments has secured $35 million of construction financing to build a multi- family development in Jersey City, Commercial Observer has learned. BHI, the U.S. branch of Bank Hapoalim, provided the loan for the real estate private equity fund’s planned 202-unit project at 277-301 West Side Avenue. Tay Investments acquired the property, which previously housed a warehouse, from IPRG for $9.35 million in May 2024 with plans for an adaptive reuse project to convert it from industrial use to residential.
The 213,282 square-foot property will consist of a six-story apartment building along with 5,800 square feet of retail space and 100 parking spots. The residential unit mix will include 42 studios, 119 one-bedrooms and 32 two- bedrooms, with 10 percent of the apartments designated as affordable housing. Community amenities will feature a fitness center, a yoga studio, a sauna, an outdoor swimming pool, a hot tub and barbecue areas.
“We look forward to continuing our ongoing
relationship with Mr. Shram and continue working with developers aiming to identify opportunities to add value to compelling markets,” Ilana Druyan, senior vice president and head of international origination at BHI, said in a statement.
Shram said in a statement that BHI has been the lender for many of ]ay Investments’ previous projects and has enabled it to “execute our goals and accelerate our opportunities to provide more value to the communities we serve.” Andrew Coen
ROYA FLUSH
A rendering of Tamares Group’s 1500 Broadway in Times Square.
The Roya in L.A.’s Koreatown.
FINANCE
Savanna Lands
$380M to Complete Luxe Resi Project in West Palm Olara at 1919 North Flagler Drive.
New York developer Savanna has secured a $380 million construction loan for a luxury waterfront residential project in West Palm Beach.
The financing from One Investment Management , Sculptor Capital Management, Octo Capital Management and Zeckendorf Development covers Olara, a two-tower development at 1919 North Flagler Drive
The Olara development will face the Intracoastal Waterway, about two miles north of the city’s downtown. A 26-story building will include 287 condo units, and the other tower will house 170 apartments. The ground floor will feature a restaurant helmed by celebrity chef José Andrés
Construction is expected to be completed in 2027. Newmark’s Adam Spies, Adam Doneger and Nick Scribani represented Savanna in the latest debt transaction.
Two years ago, the New Yorkbased developer secured a $50 million construction loan from Madison Realty Capital. Savanna assembled the 3.4-acre site, paying nearly $30 million in total, according to property records.
Olara is part of a new crop of luxury condo developments going up in West Palm Beach as the supply on the nearby, uberwealthy Palm Beach island town has dried up. Other developments include Related Ross’ Shorecrest and South Flagler House, as well as Related Group’s Ritz-Carlton Residences
Developers in South Florida have managed to secure financing, despite elevated interest rates, in part thanks to strong pre-sales, though a representative for Savanna declined to provide Olara’s figures.
Major recent deals have included $390 million for Mast Capital and Starwood Capital Group’s project in Miami Beach Julia Echikson
L.A.’s West Harbor Development Secures $62M Refinance From Oceanview
West Harbor, the 42-acre waterfront development on the LA Waterfront in San Pedro, Calif., has secured $61.5 million in financing.
The refinancing combines a new senior loan, funded by Oceanview Life and Annuity Company, and subordinate Commercial Property Assessed Clean Energy (C-PACE) financing to fund the completion and stabilization of the $500 million development at 612 – 1422 South Harbor Boulevard near Long Beach. The development and ownership team is a partnership between the City of Los Angeles and the Port of Los Angeles, along with Jerico Development and The Ratkovich Company
The entertainment, dining and experiential destination will include 321,205 square feet of leasable building and ground space, of which more than 80 percent has been pre-leased. West Harbor will open in phases starting later this year. It will feature the first satellite location of Hollywood icon Yamashiro as well as Mike Hess
Brewing, Poppy + Rose, King and Queen Cantina, and Mario’s Neighborhood Butcher Shop & Delicatessen. Developers also plan a 6,200-seat amphitheater and an art gallery next to the famous San Pedro Fish Market
“This refinancing allows West Harbor to take advantage of our recent pre-leasing momentum and combine what originally was a two-phase project delivery into a sustained single phase, accelerating full buildout of the entire West Harbor site by years,” Eric Johnson, president of Jerico Development, said in a statement.
Newmark’s Bill Fishel, Wyatt Strahan, Alethia Halamandaris, Broderick Flagg and Anna Sporrong arranged the financing.
Oceanview Life and Annuity is an affiliate of Bayview Asset Management, which focuses on mortgage and consumer credit, including whole loans, asset-backed securities, mortgage servicing rights, and other credit- related assets, along with C-PACE financing. —Greg Cornfield
Washington Capital Management Closes $120M Refi for Two Zenith IOS Portfolios
“It takes two to make a thing go right. It takes two to make it outta sight,” Rob Base and DJ E-Z Rock once reasoned. So, what’s better than sealing one portfolio financing? Sealing two.
Zenith IOS, together with institutional investors advised by J.P. Morgan Asset Management, has closed a $120 million refinance for two regional industrial outdoor storage (IOS) portfolios, Commercial Observer has learned.
The transaction, which represents the second tranche of a financing with lender Washington Capital Management, was arranged by Cooper Horowitz’s Justin Horowitz. The deal comprises two loan pools covering 30 IOS assets across the U.S.
“This execution demonstrates how the industrial outdoor storage sector continues to mature and attract interest from a wide variety of capital partners,” Daniel Laub, chief operating officer and co-founder of Zenith IOS, said in prepared remarks. “We continue to see and embrace the institutionalization of the IOS sector as capital sources — both debt and
equity — seek to invest in what they increasingly view as an essential asset class.”
Laub described Washington Capital Management as “an ideal financing partner, providing flexibility and a seamless execution that aligns with our overall portfolio goals.”
The portfolio assets are spread across the U.S. in Zenith’s target locations, with the Brooklynbased firm acquiring and developing IOS properties in markets where there’s strong tenant demand and reduced supply. The platform was co-founded by Ben
Atkins and Laub in 2021.
“Zenith remains focused on strategic growth in markets with strong fundamentals,” said Laub.
“These include infill locations near major transportation corridors where we see sustained tenant demand and significant barriers to entry.”
Horowitz led the charge in bringing Seattle-headquartered Washington Capital into the deal, and closing the financing. The deal rallied stiff competition from lenders, he said.
“It was a privilege to arrange the financing for Zenith
with Washington Capital Management,” Horowitz said. “We conducted a competitive process and achieved an excellent result due to the institutional sponsorship and quality of the underlying collateral.”
Last August, Zenith and J.P. Morgan Asset Management announced the formation of a second $700 million IOS venture that would expand Zenith’s U.S. footprint, as reported by IPE Real Assets.
In a December interview with CO, Zenith’s Atkins spoke of the continued institutionalization of the IOS asset class.
“You’re seeing many of the largest institutional players in the space, entering the space or looking at the space, and I think that institutionalization is going to continue,” he said. “With that, you’re going to see larger transactions being done, both on the equity side and on the debt side. As you start seeing portfolio transactions being done, I think there’s actually going to be a very robust capital markets environment in the IOS space over the next year.”—C.C.
The West Harbor development in San Pedro.
Zenith’s Daniel Laub and one of the outdoor storage properties in Houston.
Chart Finance
CRE CLO Distress Rate Reaches Record 16%
By Mike Haas
The CRED iQ commercial real estate collateralized loan obligation (CLO) distress rate added 90 basis points (bps) in February — reaching a new high of 16 percent. A year ago, the CLO distress rate was only 9.4 percent but has been steadily rising as floating-rate loans fail to pay off at their maturity dates.
Underpinning the distress rate, February’s delinquency rate tacked on 44 bps to reach 12.2 percent. The special servicing rate added 57 bps to hit 9.4 percent in the latest print.
The CRED iQ distress rate includes any loan reported 30 days delinquent or worse, past its maturity, specially serviced or a combination of these metrics. We also examined the most recent property-level net operating income figures and compared them to underwritten expectations.
Looking across payment status in February, 30.7 percent of loans are performing matured (down from 33.4 percent in January). Of these loans, 32.7 percent were nonperforming matured (up from 25.6 percent in January). Combining these two metrics, 63.4 percent of the CRE CLO loans in our study are past their maturity dates, up 436 bps from 59 percent in the previous report.
About one-fifth of CRE CLO loans (20.3 percent) are current (up from 18.8 percent in January). Combining late but less than 30 days delinquent, the percentage increases to 23.1 percent, up from 22.1 percent in our January print.
Delinquent loans that have not passed their maturity date accounted for 13.5 percent of the CRE CLO loans — down from 18.9 percent in January
Analysis scope and methodology
CRED iQ consolidated all of the loan-level performance data for every outstanding CRE CLO loan to measure the underlying risks associated with these transitional assets. Our team examined $66.4 billion in active CRE CLO loans. Many of these loans were originated in 2021 at a time when cap rates and interest rates were low and valuations high. These loans are starting to run into maturity issues given the spike in rates.
Some of the largest issuers of CRE CLO debt over the past five years include MF1, Arbor, LoanCore, Benefit Street Partners, Bridge Investment Group, FS Rialto and TPG. The vast majority of the $79.1 billion in CRE CLO loans are structured with floating rates with threeyear loan terms equipped with loan extension options if certain financial hurdles are met. Mike Haas is the founder and CEO of CRED iQ.
CREDIQ
Where major real estate transactions happen
It’s commercial real estate now for Ryan Serhant, who built a residential juggernaut off roles in ‘Million Dollar Listing’ and ‘Sell It Like Serhant’
yan Serhant is no stranger to success — or the spotlight.
After early stints as a daytime soap opera actor and even a hand model, Serhant found stardom in 2012 as the breakout broker on Bravo’s “Million Dollar Listing New York,” and ultimately went on to star on spinoff shows like “Sell It Like Serhant” and “Ryan’s Wedding.”
Throughout the next decade, Serhant cemented a name for himself as one of the world’s most famous residential real estate brokers, closing nearly $10 billion in sales throughout the course of his career for firms like Nest Seekers International, Town Residential and Brown Harris Stevens.
Serhant eventually took the reins himself and started his own eponymous company in 2020. And Netflix took notice — Serhant got his very own show with “Owning Manhattan,” which tracks the firm’s agents and its biggest listings (and the drama that follows).
Headquartered in 15,000 square feet at SoHo’s 372 West Broadway, Serhant has quickly become a top name in New York City residential real estate, with $4 billion in inventory and nearly 50 new development projects in 2024 alone.
And it’s not just residential. In addition to sales of ultra-luxury residential condos, “Owning Manhattan” shows the firm’s first foray into commercial real estate with sales of office and mixed-use buildings across the city.
In its biggest commercial deal, Serhant’s team sold the four-story, mixed-use building at West Chelsea’s 548 West 22nd Street for $50.5 million just before the new year.
Serhant said he plans to continue that momentum and present his firm as a “unique choice” for commercial clients, as his firm has “more qualified eyeballs all over the world than any commercial real estate
By Isabelle Durso | Photography by Peter Garritano
brokerage combined.”
With Season 2 of “Owning Manhattan” likely to premiere sometime this year, it seems like Serhant will add on even more eyeballs to its already burgeoning firm. Commercial Observer caught up with the man behind it in late January to discuss his career and future plans.
This interview has been edited for length and clarity.
Commercial Observer: So, obviously, a lot of people have followed your transformation from being a reality star on “Million Dollar Listing” to starting your own business at Serhant and Netflix’s “Owning Manhattan.” But how did you get started in real estate? Do you remember your first deal?
Ryan Serhant: I got started in 2000, but I got my license in 2008. I did rentals in Manhattan’s Koreatown, Brooklyn, Queens and the Bronx, and I did my first sale in 2009. I got my first new development building in 2010, and I was cast on “Million Dollar Listing New York” in 2010, which changed my life. I’ve been building ever since.
You’ve had a bit of an acting career as well. Did you always know you wanted to be on TV, and what do your friends and family say about the show?
I grew up wanting to do TV. When I moved to New York City in 2006 after I graduated college, I did the soap opera “As the World Turns.” I was doing theater. … It was my talent. It wasn’t my job. And it was really hard to turn into a job, which is why I got into real estate, because I ran out of money.
My mom watches the show. My dad doesn’t. Reality TV is not his thing. They’ve always sort of been in the mind of, “If you work hard and you’re a really good person and you think it’s good for your business and for
your livelihood, then do it. But, if any of those start to falter, then we’re going to have problems at Thanksgiving.” So that was kind of the conversation, but “Million Dollar Listing” changed my life.
I then did three spinoff shows at Bravo: “Sell It Like Serhant,” “Ryan’s Wedding,” “Ryan’s Renovation.” And, then, when we started Serhant in 2020, I went to Netflix and said, “Let’s do a show together.” And we created “Owning Manhattan.” That came out last year, and we’re shooting Season Two right now. My parents like “Owning Manhattan” a lot better.
Why did you decide to live in Brooklyn as opposed to Manhattan, since “Owning Manhattan” largely focuses there?
I bought our house in 2018, I think. I had just gotten married. I knew we were going to have kids. I knew I wanted to have a bigger house or apartment. I wasn’t necessarily looking for a townhouse and I wasn’t necessarily looking to be in Brooklyn, but some of our businesses are in Brooklyn, we’re in Brooklyn all the time, and I’m driving through Brooklyn to get to both airports all the time. And there’s just good value.
I had a listing, which is the house I live in, and the seller needed to sell, and I was able to get a really, really good deal on it that I ordinarily wouldn’t have been able to get. I was like, “Hey, I think I’ll let the deal decide where we get to live, and we can do a renovation and have fun, and we’ll build for the future.” We did that in 2018, and moved in in 2022 because COVID-19 threw us, obviously.
Being on reality TV, what hurdles did you not see coming when it comes to starting your own company?
Well, one, ignorance is bliss until it gets expensive. There’s a lot that I didn’t anticipate, because if I had overly anticipated every
Ryan Serhant at the 372 West Broadway offices of his company.
single thing, I would have had what a lot of our buyers have, which is analysis paralysis, which I didn’t want. Analysis paralysis keeps me from making decisions. Life is short, right? So I wanted to make sure that we just move forward regardless. And, if there’s a will, there’s a way.
I think with the cost of certain things, I didn’t realize how ridiculous legal expenses were going to be, or insurance, or how starting a business is not necessarily one big expense. It’s 10,000 little expenses that add up to a big expense. Defining your mission and your value prop is incredibly important. What does it mean to go from being a real estate broker to being a CEO? What does it mean to be the decider and make decisions? Am I a good leader, a good manager, both, or just one?
So there was a lot of personal discovery I had to do the first couple years that I think was unexpected, but obviously I had to go through it.
Does having a reality TV show make it harder to get deals across the table since it’s so public? Or has it actually helped if there’s buyers who want that kind of visibility?
The only people who go on TV are people who sign up to go on TV. I mean, TV changed my life. There’s 8 billion people on this planet — the people that don’t want to work with us because we’re on TV, I’ll never even know who they were. And the people who do want to work with us because we’re on TV is 1,000 percent more than anyone who ever didn’t want to work with us.
By the end of this year, we’ll have 10 million direct followers and subscribers across social accounts, and it doesn’t include the 300 million eyeballs Netflix has. There is no other residential real estate brokerage that has the reach that we have. And, if you’re going to hire a residential real estate agent or commercial — because we do commercial now, too — and you’re going to pay a commission, why not pay it to the firm that can put your property in front of more qualified eyeballs than anybody for the same exact cost? And, so, our ability to take market share — I don’t know if I’d be able to do it without the exposure that we have.
How big is Serhant now?
There’s four businesses here. The brokerage is in eight states. We just crossed 1,000 agents at the end of last year, and I think we have 110 employees. SellIt.com is our sales training business, that’s a big business. We have 38,000 members in 131 countries, and it has a staff of 20. The production studio that creates the Netflix show and all of our social content is called Serhant Studios with a staff of 30. That produces all of that organic content and all the social. And then S.mple is a big team as well, and that’s all the tech and the AI service.
So how do all of those different business lines fit together under one Serhant brand?
Well, they’re all me, and they all sit under
Serhant.Technologies, and they’re all sales enablement. That’s what our business is. We enable agents to sell homes and buildings, we enable customers to buy homes and buildings. We enable sales people to learn about sales in Mumbai and Sydney. We enable properties and products to increase lead flow and pipeline due to organic content.
Serhant Studios is a content-to-community- to-commerce business. The books, the podcast and the TV show are all in the war for attention. Especially in real estate, in 2013 when Instagram was invented, the product moved from your skill set to your ability to gain attention for your properties and for your personal brand. So all of that just helps brand awareness.
Is commercial real estate an area you’re trying to focus on more, and is it hard to get into?
It’s definitely hard to get into, much harder to get into than residential. It’s far more Rolodex-based. You need to know people that are looking to buy buildings, lease offices, do commercial spaces. We’ve been growing so much on the commercial side over the past 12 months, really. We’ll probably do about $1 billion in 2025 in pure commercial transactions as a residential firm, which is, like, totally bonkers, because the market and the marketplace is currently being consolidated. You see that. Small firms are being absorbed by big firms, medium firms are absorbing smaller firms.
And the difference between how you sell a residential townhouse and a multifamily building or garage has kind of become a little bit blurred, especially in a city like New York. We sold 548 West 22nd Street on Dec. 31 for $50 million. In a traditional core commercial brokerage, you’re not even selling the asset, you’re selling a financial instrument. You’re selling a cap rate, right? You’re looking for that institutional purchaser, even if the purchaser is just Bob, who wants to buy the building. You’ve got a pro forma, you’ve got your index of purchasers who purchase these types of assets, your financial adviser for commercial real estate.
For us, we sell brand, we sell story, we sell value appreciation. That building we sold at an incredible premium because of how we sell residential property and the fact that we can put buildings in front of more qualified eyeballs all over the world than any commercial real estate brokerage combined. So that’s why so many commercial agents are coming to us that want to join us, that want to work here, because they’re seeing that the writing’s on the wall for their industry and we’re a unique choice for their clients.
How big is Serhant’s commercial team now?
We have about 10 people in Manhattan, an additional 10 in Florida. We have a couple commercial agents now in every state we operate in, so maybe that’s 50 or 60 strictly commercial agents.
You’re from Texas — have you ever tried to get into real estate there?
Our president, Josh Team, is based in Dallas. A lot of my family is between Dallas, Houston and Austin, and we will eventually go to Texas. We’re just analyzing all markets that make sense for our model right now.
Serhant is quickly becoming a huge brand. Do you think you’ll ever move into the development game, or will we see any Serhant-branded buildings?
Never say never. I know what I’m good at, and I know what I’m not good at. I know what I have a stomach for, and I know what I definitely don’t have a stomach for. And I don’t think I have the stomach to be a real estate developer. I like my own properties and investing in our own things and our own flips, and we do that, and that’s fun, but I have enough on my plate at the moment.
Where are buyers coming from for luxury condos in New York City? Is it mostly from overseas?
No, most of the buyers are domestic. There’s definitely international money, but most of the buyers are renters who, like everyone, just don’t want to pay rent anymore. They’re looking to create roots, and have their first baby or second baby. You have a lot of domestic purchasers coming from different states. And, obviously, right now we have a lot of people coming from California.
What would you say are the current trends in the market for luxury condos right now? Which price points really help move product?
The trend right now is — and it hasn’t really changed a whole lot in the past couple years — is people want to live the way they travel. So, if you like staying in four-, five- and six-star hotels, you want to live that way, so the most full-service, the best brands. There’s a flight to quality.
When I got into the business doing new
developments in 2009, 2010 and 2011, the market was so upside down, the only thing you could buy was unbranded buildings, like the third floor of a six-unit building on 63rd Street by the 59th Street Bridge. That’s what you would sell because they were better deals and better value. No one was willing to spend the money to buy quality.
Today, it’s the exact opposite. You wouldn’t even spend on something that wasn’t quality, where you would even overspend on quality because the investment value is protected and you also get a better quality of life. You can see it in the buildings that we’re even selling now, like Williamsburg Wharf with Naftali in Williamsburg, Brooklyn. It’s an incredible example. We just sold the penthouse for over $2,700 per square foot in Williamsburg. If you had told me that we were going to do that even two years ago, I probably would have questioned you. Even the Huron, which we’re selling in Greenpoint, Brooklyn, we’re nearly sold out there. We sold a unit on the seventh floor for $2,661 a foot. Again, it’s not about price per square foot anymore. It’s a flight to quality.
Interest rates are still super high, so are people actually buying now with that?
Yeah, people are just adjusting their expectations. It’s not about buyers. When you have rates spike so fast, you’re not removing buyers from the market the way that people talk about — you’re removing sellers. Every mortgage immediately moved from being debt service to becoming a financial asset. And so why would you ever give that up today? Why would you sell unless you need to?
Historically, you probably have about 2 million homes on the market in the United States at any given time. Today, we’re lucky if it’s 1 million. So half is nuts. Last year, fewer homes sold in the United States than in 2023, and 2023 was the worst year we had in 30 years. I think all you need is balance, and you need there to be a new normal. So the longer rates remain where they are, the less people
can wait. They’ve got to move. Like, they’ve had that baby, they’ve had that job, they’ve got to make a change. So I think we’ll see greater transaction volume this year, for sure.
And, in terms of developers, who are the new developers entering the market? What are your interactions like with them? All of our developers, for the most part, are pretty well known, whether it’s Michael Stern’s JDS Development Group and Mercedes-Benz with places in Miami, or Benjamin Shaoul of Magnum. We’re working with Magnum right now, doing the Colette in Greenwich Village — we’ll put that on the market soon. Or David and Gary Feldman of One Park Row that we just put listings online for for the first time.
What would you say are the hardest assignments to get this year as a broker?
Markets come and go. You have high markets and you have low markets. You have unique assets. You do everything you possibly can. Sometimes there’s buyers, sometimes there’s not. Sometimes you have buyers who bring 10 offers and the seller just doesn’t want to take them. I think the hardest listing to get is your first. That’s it. Everything from there, if you play your cards right, is an extension of the first listing you ever got. And you just want to ride that price roller coaster up.
What would you say is the role of tech in the industry today? I know Serhant uses a lot of tech to its advantage, but would you say AI is helpful for dealmaking and content creation, or have you found it to be detrimental?
It’s incredibly helpful. All you’re doing is making people smarter. We have an AI service called S.mple. We invest into our agents and buy their time back. They use the service to do all their administrative work for them. It’s as life changing as the combustible engine was.
I’m curious to get your take on New York office-to-residential conversions. Can you see those properties being a good fit for residential?
It depends. Something that we spend a lot of time with on new construction condos, when we have the site from the ground, is understanding what is the envelope that we’re dealing with. How do we create the best floor plans? How do we create the best experience to live here? And that’s hard to do when you’re doing a conversion project, because the conversion is coming out of a building where the highest and best use is for office or for commercial. And sometimes that means you have a really, really deep floor plate and your core has to go in a tricky place.
But I think there are great opportunities for great conversions. They don’t have to be office. They can be hotel. There’s a lot of hotels that have converted to residential that are great. I’m excited about all the opportunity, though, to create amazing new residential products because we definitely need them.
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Oh My Posh!
The heavy legal lift behind the Waldorf Astoria’s swanky new condos
By Larry Getlen
n the late 1880s, the Astors, one of New York City’s most prominent families, lived in two neighboring mansions on 34th Street.
Despite the Astors’ blood relations, the occupants of the two homes hated each other.
The complications this would engender seemed to foreshadow the property’s complicated future — which, as of last month, includes the debut of newly developed luxury condos following a series of legal acrobatics stretching back to before the pandemic.
Living in the epitome of luxury was never quite enough for the Astors.
“It was William Waldorf Astor in one mansion and his aunt, Caroline Astor, who lived next door, and who was the very height of society, and they did not get along at all,” said historian Kevin Draper, who runs New York Historical Tours. “Caroline said that everyone had to refer to her as the Mrs. Astor. But other members of the family said, ‘Who do you think you are?’ Because there are other women in this family that are Mrs. Astor.”
At a certain point, the animus grew so heated that William Waldorf Astor decided to tear down his mansion and turn it into a hotel. Named to resemble the Astor family’s home city of Walldorf, Germany, the 450-room Waldorf Hotel opened in 1893 and immediately became the most luxurious hotel in New York.
And it might have remained the greatest hotel ever built out of pure spite if Caroline’s branch of the family hadn’t retaliated in kind.
“You’re living in a nice mansion when all of a sudden, you look next door and you have this huge hotel,” said Draper. “So then [her son] John Jacob Astor IV decides to fight back. They’re thinking of tearing down their mansion and building a horse stable to spite the hotel, because the smell would be terrible. Then they realize that money-wise, you’re not going to make a lot of money off of a horse stable. So they think, ‘Why don’t we just build a bigger hotel?’ So they build a bigger hotel right next door, right up to the property line. So now the buildings are touching, and it’s the Astoria Hotel, and it’s much bigger.”
In time, the branches of the family realized that the feud was bad for business, and combined the two buildings to create one grand hotel: the Waldorf-Astoria. (The hyphen was dropped in 2009, though it remains carved into the building’s facade.)
The grandeur their pettiness created became one of the world’s legendary hotels and, in time, luxury residences.
Throughout the mid- to late 20th century, the Waldorf Astoria, which was built anew on Park Avenue and East 50th Street in 1931 as high society moved uptown, became home for some of the country’s most sought-after talents. Legendary
composer Cole Porter lived there for three decades, supposedly writing some of his most famous songs within its walls. And upon Porter’s death in 1964, Frank Sinatra moved in, making Porter’s massive five-bedroom suite his home until the late 1980s.
Sophia Loren, Marilyn Monroe and even Gen. Douglas MacArthur all called the Waldorf Astoria home.
Given its impressive history, current owners or renovators have to account for not just immense practical considerations, but also the weight of the hotel’s considerable contributions to New York City’s history, prestige and glamour.
This year, the Waldorf Astoria is beginning a new phase of its existence.
The hotel/home was purchased from Hilton Worldwide Holdings for $1.95 billion by the China-based Anbang Insurance Group in 2014 and shuttered for renovations in 2017, with the legendary building set to be transformed into 375 luxury condos, 375 hotel rooms to be managed by Hilton, and some retail as well.
The first of the property’s new condos have now sold — units start at $1.875 million and go to $18.75 million — and the hotel portion is slated to reopen later this year.
The law firm Kramer Levin was brought on board around the time of the acquisition not just to facilitate the transformation, but, initially, to also assist with the hotel’s modernization.
Given the property’s rich history, the first significant endeavor was determining which potential changes might be derailed by the city’s Landmarks Preservation Commission. The hotel’s exterior was designated a New York City landmark in 1993, but portions of the interior weren’t so designated until 2017.
“The concern was that once the use of the building changed, spaces that might have been formerly public would become privatized. And one of the requirements for interior landmarks is that they have to be customarily accessible to the public,” said
a
Campbell worked closely with the Landmarks Preservation Commission and project architect Skidmore, Owings & Merrill (SOM) to determine which areas targeted for renovation would be designated as protected landmarks, and how to best design the property around them.
After a process of about six months, the commission made its determinations, designating many interior spaces of the hotel as landmarks. These included the main lobby, many of the guest rooms, and the hotel’s ballroom.
Then, Campbell worked with SOM to determine how to best execute the architecture firm’s vision while preserving any area given landmark status.
“One of the programmatic needs was to get a distinct residential entrance to the condos that was separate from the hotel entrance,” said Campbell by way of example. “That required a lot of back and forth with the architects and the commission because the residential entrance needed to be distinct from the hotel entrance, but not detract from that entrance, which was the historic entrance to the building.”
The hotel’s raised entrance generated much discussion after the owners briefly considered altering it to make it more level to the street.
“When the Waldorf was first built in that location, the train tracks for the New York Central Railroad were close to street level. So you were literally walking over tracks,” said Kramer Levin partner and real estate chair Jay Neveloff.
But the landmarks commission made it clear that this change would not be acceptable.
“Those sections are part of the designated interior — that whole lobby,” said Campbell. “So those levels became part of the designated interior landmarks.”
Another area that landmarking affected was the hotel’s windows.
“The Starlight Lounge, where I’ve been to a number of
Valerie Campbell,
partner at Kramer Levin.
wedding ceremonies, is now a fabulous pool area for the residences,” said Neveloff. “They kept the height and the windows off the exterior, and there are glass partitions looking down from the exercise rooms onto this pool area. It’s terrific.”
The Plaza Hotel underwent a similar conversion back in the mid-aughts. Miki Naftali, founder and CEO of Naftali Group, purchased that hotel for $675 million in 2004, and spent $400 million restoring the interiors and converting it into 180 private condos, 152 piedà-terre hotel-condos, 130 hotel rooms and 160,000 square feet of retail space.
Naftali remembers the many challenges landmark considerations can present for this type of conversion.
“Not only was the Plaza a New York landmark building, it was also a federal historic building,” said Naftali. “And, in addition to that, [landmarks officials] declared seven of the interior rooms as landmarks. So we had a lot of complications, not only with the facade, but, for example, if we wanted to change windows, or introduce new mechanical systems. There are a lot of things that you need to get approved through the landmarks committee, with excessive approvals needed before you start to do the work.”
Naftali said that the greatest challenge to a conversion of this sort is dealing with unknowns.
“In a new construction, the biggest unknown is what is below grade,” he said. “Once you’re done with the foundation and start to go vertically, everything is clear. But when you deal with a 100-year-old building that has undergone multiple renovations and new mechanical systems, every corner you open, every ceiling you open, every new riser creates issues. That makes it very difficult to estimate the budget or the schedule, because you can have a lot of setbacks.”
Even beyond landmarking considerations, the Waldorf’s formative negotiations required examining every aspect of the building to determine its future.
“I remember some internal discussions about whether the ballroom should remain,” said Neveloff. “There was a clear consensus that the ballroom at the Waldorf is an asset of New York City. It was never a serious discussion. There were never any big debates. The debates were about tempering the architect’s creativity with the need to preserve history.”
Once these issues were dealt with, Kramer Levin had to establish the condominium’s governing documents in a way that accounted for the presence of the hotel, including a deal that had been signed with Hilton to manage its operations, alongside the for-sale condos and some retail.
“Usually, there isn’t a negotiation of condominium documents. As condo counsel, we just implement the structure that our client wants to implement,” said Josh Winefsky, a partner at Kramer Levin. “But, here, we had to form the condominium’s governing documents for the entire building, ensuring that the rights and obligations of the hotel component were captured relative to the rights and obligations of the residential for-sale
component.”
Kramer Levin had to negotiate with Hilton to ensure that the agreement lived up to the brand standards of both Hilton and the Waldorf Astoria while also establishing substantial rights for the residents.
“We negotiated the condominium documents for probably a year,” said Winefsky, “making sure that all of the various rights that Hilton required were built into it while still preserving the ability of the residential component to operate with some freedom. That was a significant and unique challenge. We don’t end up doing that often.”
Part of this negotiation was determining which of the legendary luxury hotel’s services and amenities would be available to condo residents.
“You have this world-class hotel and the services it offers. Those services are part of the marketing of the residential sales process,” said Winefsky. “We took a lot of time negotiating how residential unit owners can benefit from the services that are provided by the hotel and not the building as a whole and baking that process into our condominium documents, as well as separately identifying other services they would have to pay for.”
Winefsky cited the hotel’s concierge services, which will be available to Waldorf Astoria residents.
“You don’t get that if you’re just buying an apartment at an ordinary luxury condo building,” said Winefsky. “You’re getting the Waldorf Astoria hotel’s personal concierge service at your disposal. That’s baked in. To the extent that there are Waldorfbranded events happening, because you’re an owner in the building, you get to enjoy those.”
Other hotel services will be available to residents for a fee, including housekeeping and valet services as well as in-room dining.
Winefsky, who notes that part of the reason for the long negotiation was that they were contending with factors that all parties involved rarely dealt with, compares the end result to a joint venture agreement.
“You’re effectively setting out the rights and obligations of partners,” said Winefsky. “So the way it was resolved in a lot of instances was going line by line through 220 pages of condominium documents, making sure that whenever there is something that is operationally specific, that it’s being addressed to a level that satisfies Hilton’s requirements for branded standards while also satisfying the developer’s desire to maintain a marketable product.”
With the result of all this work now coming to fruition, the Waldorf Astoria is poised to usher in the next phase of its history, introducing younger generations to the prestige and glamour New York City has enjoyed for the past century.
“I think it’s going to be one of the hot hotels again,” said historian Draper. “It still has that name, and younger people are very into these older hotels. It’s amazing how popular some of these places have become. I think it’s definitely going to be a destination.”
INN NEGOTIATIONS: Separating the entrances of the hotel portion (above left) and the condo portion (above center) came up as the Waldorf Astoria’s governing documents were worked out. Preserving the ballroom — pictured at top in 1934 — was not up for debate.
Societal shifts explain why pet-friendly amenities are here to stay — stay, boy! — in urban residential buildings
By Amanda Schiavo
oof, there it is.
Forget marble countertops, rooftop infinity pools, in-building cafes and coworking spaces. If luxury developers really want to attract residents to their apartment and condo buildings, they better start thinking about providing tenants’ dogs with everything a pup will need to live that bougie life.
OK, maybe don’t forget those other amenities. But, honestly, adding some dog-specific elements to your developments could make your buildings more attractive.
Just ask Mary Wallace, a New York City resident with a fulltime marketing director job who spends her free hours volunteering for Rescue City, an organization that helps dogs in need find their fur-ever homes. Wallace has fostered 14 dogs since joining Rescue City in 2021, and now that she is on the hunt for a new apartment, the building she moves into will need to meet some pretty specific dog-friendly criteria.
“A dog bath station is an amazing amenity,” Wallace said. “Dogs can roll around in God only knows what, so having a place that is not necessarily your bathroom where you could wash your dog, and you don’t have to take the dog to a groomer, is amazing. A dog-friendly outdoor space [as part of the building] would be incredible. To just be able to let your dog out and play with other dogs in the middle of the day, if you don’t have time to take them for a longer walk, would be incredible.”
Just the simple act of a building allowing pets of any kind can have a positive impact on tenant attraction and retention. Indeed, residents living in pet-friendly housing stay 21 percent longer — or 10 additional months — than residents in non-pet-friendly housing, according to research from The Pet Inclusive Housing Initiative. Additionally, 83 percent of owners and operators say they fill vacancies in pet-friendly units faster than in their non-pet-friendly properties. Some 79 percent of owners and operators say it is easier to fill petfriendly units as well.
Now imagine what adding those luxury dog-specific amenities might do for tenant attraction and retention.
At 3Eleven, a luxury Manhattan rental at 311 11th Avenue, dogs receive concierge-level service, including a split third-floor dog run — one side for small dogs and the other side for bigger dogs — as well as boarding, doggy day care and spa services, all on-site and operated by services company Throw Me A Bone
Some 30 percent of residents at 3Eleven have pets, and the dog amenities proved to be a “major driver in leasing
decisions,” Sammy Ahmed, regional leasing manager for Clinton Management and general manager at 3Eleven, said in an email.
“Prospective residents recognize the level of care and consideration we put into their pets’ well-being, making these amenities a key factor in closing deals,” Ahmed said. “One of our recent move-ins even joked that their dog had already ‘settled in’ before they did, thanks to the luxurious amenities.”
Dog- and pet-specific amenities
“create stickiness,” said Dan Kaplan, a senior partner with architectural firm FXCollaborative, the design team behind 3Eleven. “It keeps people in the building, and that’s the most important thing for a rental developer.”
At the Dupont, a luxury apartment building in Brooklyn’s Greenpoint neighborhood, residents have access to a fully equipped doggy spa, where they can bring their pups for a bath in a cutely designed space, with a large professional-grade tub and blow dryers.
To be able to groom your dog “outside of your apartment, for free, on a daily basis is a huge benefit,” said Isaac Henderson, managing director for Northeast development at Rockefeller Group — the firm behind the Dupont. “It makes sense to have this at the Dupont and was a critical early amenity we wanted to offer.”
Given the Dupont’s waterfront location and proximity to parks, there are lots of opportunities for pups to get good and dirty while out and about with their humans.
“We felt very confident that given the location we would attract a large percentage of residents with dogs,” Henderson said. “We wanted to be able to accommodate the demand for cleaning services.”
At the time of publication, the Dupont — which began leasing in late fall of 2024 — was about 35 percent leased. And some 40 percent of that resident population owns a dog, according to Henderson.
But the Dupont’s developers aren’t stopping at just offering dog parents a grooming salon for their pups. Henderson said the firm is close to securing a veterinary clinic tenant in its ground-floor retail space.
“We wanted the Dupont to be a place where your pet can come and have it all,” he continued.
And it’s not just 3Eleven and the Dupont. Buildings across New York City — including 77 Greenwich in Lower Manhattan, 555Ten in Hudson Yards, 277 Fifth Avenue in NoMad, 547 West 47th Street in Hell’s Kitchen, 130 William in Downtown Manhattan, and Pierhouse in Brooklyn Bridge Park — all offer a variety of dog-specific amenities. Such luxuries include dog runs, pet spas, grooming stations and covered outdoor dog parks on property. Some even offer in-house training and doggy day care programs.
The cost of adding a doggy washing station can start at $3,500 for a large tub and other equipment, according to
pre-pandemic figures in Building Design & Construction, amounts likely to have risen along with the general increase in material costs since COVID-19. That cost, however, can be quickly covered in many of these buildings. At the Dupont, rents for studios start at $3,506 a month, and a one-bedroom condo at 77 Greenwich sells for at least $1.5 million.
New York developers aren’t alone in realizing the benefits that come with prioritizing dog lovers when building a project. Cities nationwide have luxury condo developments that also feature dog-specific amenities.
In Philadelphia, One Thousand One — the city’s largest condo project — is proudly offering dog parents a 25,000-square-foot dog park on the second floor, alongside the building’s human-focused amenities space. The dog park will include canine turf, a doggy race course, and other features to provide small and large dogs with the stimulation they need during playtime.
It cost about $200,000 to add the dog park amenity at One Thousand One, given the top-quality turf that was used and the addition of a washdown area to take care of messes and smells, said Elise Halter, co-chief operating officer for Post Brothers, the brains behind One Thousand One. It might not take them long to recover that investment considering a studio at One Thousand One starts at $1,563 per month and a three-bedroom tops out at $6,704 per month.
“The dog park has become an essential — just like having a great kitchen, the best closets, a world-class gym,” Halter said. “We just have to have it for our residents. It just needs to be easy for them to be able to take their dog out.”
When conceiving One Thousand One, Halter said the Post Brothers team took a deep look at the expanding life cycle of the residents who’d be moving into the building. For many young professionals, having a dog is a big part of that cycle, and designating a significant portion of the amenities space — which includes a spa, a pool deck with a hot tub and a golf simulator — for dog parents just made sense.
A dog park “is just an essential,” Halter continued. “It doesn’t make sense that we would have all of these other [amenities] and we wouldn’t have this.”
Some 58 million households across the U.S. own a dog, according to data from trade group American Pet Product Association, with millennials between the ages of 28 and 43 making up the largest percentage of pet parents in general. Millennials are also the generation that most expects to rent forever, data from real estate firm Metonic found. Additionally, 51 percent of pet parents say they consider their pets to be as much a part of the family as their human relatives, according to the Pew Research Center.
The way people interact with their dogs has evolved dramatically over time. Dogs, once relegated to tiny outdoor doghouses,
WOW!: Some 30 percent of the residents at the luxury Manhattan residential building 3Eleven (top, above) have pets, and brokers for the property reported it was a “major driver in leasing decisions. This is due to the “revolution” in the way people relate to pets, says the Good Dog Foundation (right).
now sleep cosily alongside their humans on memory foam mattresses, eat farm-totable food, and enjoy a drive-through pup cup on their way to doggy day care.
“Over the past several decades there has been a revolution in the way humans relate to pets. No longer property relegated to back yards and kitchens, pets have ‘moved inside the home’ becoming full-fledged family members,” Bruce Fagin, executive director and chief advancement officer for The Good Dog Foundation, a provider of therapy dog services, said in an email. “So profound is the shift in the human-animal bond that over the past quarter century, state legislatures have changed laws to allow loving, wellmannered dogs into hospitals, nursing homes and schools as cohorts to health care and education professionals.”
Seeing this change in the human-dog relationship has inspired some developers to think more about the different kinds of families moving into their rentals and condos as they become more aware of the deeply rooted bond between humans and dogs.
“More people are bringing more dogs into their family, and I don’t think this is a trend that is going to slow down,” Rescue City’s Wallace said. “Dogs are integral to our culture, and developers need to think about how people’s expectations will change in the next five or 10 years, about what they want their dog to have access to on a property, in the same way they think about what children would want access to.”
BOW
Home Equity
New York lawmakers aim to curb the homebuying power of institutional investors
By Aaron Short
ov. Kathy Hochul is trying to alleviate New York’s housing shortage by blocking private equity firms from bigfooting families that want to purchase a starter home.
This year, the governor proposed a new law requiring institutional investors with more than $50 million in assets and a portfolio of 10 or more single-family properties to wait 75 days before making an offer to purchase a one- or two-family home on the market, or face a $250,000 fine per offer.
Hochul acknowledged that private equity firms could end up acquiring these
kinds of properties but that a two-and-ahalf month delay would give lower- and middle-income families the first crack at owning a home they could afford.
“I don’t want any more hardworking individuals or moms or dads or anybody who wants this dream to become reality to have to lose out to you. And that’s how we’re going to stop it,” she told a crowd of civic leaders outside Rochester on Feb. 28. “I want to make sure that people have a chance to get in that market and be able to bid on it.”
The homeownership proposal is a key cog in the governor’s $252 billion budget proposal that attempts to rein in the state’s high cost of living after voters said
it should be Albany’s top priority this year. The plan includes a number of responses targeting the effects of rising inflation, including checks worth $300 to $500 to taxpayers and spending $50 million on aid for families to make down payments on their homes and to encourage the construction of more starter homes.
Real estate leaders remain cool to the private equity curb, which Hochul first floated at her State of the State address in January.
“The messaging around this legislation creates yet another impression that investment in housing is not welcomed in New York,” Real Estate Board of New York President James Whelan said in a
statement to Commercial Observer. “We encourage elected officials to instead focus on solutions that will actually improve the quality and amount of housing across the state.”
But the rule arose from concerns among lawmakers that the price of housing has spiraled out of reach for people across the state, and that New Yorkers were increasingly competing with deep-pocketed investors that could pay for properties without a mortgage.
Nearly 5 percent of all homes in the state between 2018 and 2022 were purchased by large institutional investors, according to the Private Equity Stakeholder Project, a watchdog.
‘The messaging around this legislation creates yet another impression that investment in housing is not welcomed in New York.’
“Our parents and grandparents didn’t have to bid against private equity firms when they were buying their first home,” Hochul said at the event. “And these huge, greedy conglomerates are gobbling up the housing stock, and they’re trying to increase their portfolios and bring in more money, and they’re building up a lot more vacation homes and rentals.”
Private equity has become a reliable political boogeyman for myriad harmful effects to the nation’s economy, including substantial job losses, higher rents and even premature deaths. Some of the hand-wringing over private equity’s role in the dwindling supply of housing, however, appears justified.
When more than 5 million homes went into foreclosure during the Great Recession, investors scooped up hundreds of thousands of distressed single-family properties throughout the Sun Belt and converted them into rentals. In 2023, the country had an estimated shortfall of 4 million to 7 million homes after a decade of underbuilding and rising mortgage rates.
Construction of new housing has started to rebound since the pandemic.
Production of single-family homes reached more than 1 million nationally in both 2022 and 2023 — the first time since the Great Recession. But the price of single-family homes also rose 47 percent from 2017 to 2022.
Private equity firms have continued to enter the U.S. market, building tens of thousands of residential properties available for rent but not for sale. If trends continue, those firms could own 40 percent of the country’s single-family rental homes by 2030.
Finance advocates wary of private equity’s creeping influence on the housing market believe Hochul is getting ahead of a trend developing in New York state.
“As private equity control of housing has driven up rents and shut out prospective homebuyers across the country, Gov. Hochul’s proactive move to limit private equity intrusion into the single- and two-family home market in New York state is wise,” said Sam Garin, a spokesperson with the Private Equity Stakeholder Project, which tracks the effects of private equity on industries.
Other states are considering even stricter measures. A North Carolina bill proposes restricting institutional investors from owning more than 100 homes or face daily fines up to $100. Lawmakers
in Washington state are considering a bill that would prohibit investment entities that own more than 50 single-family homes from buying any more. Minnesota legislators are evaluating a bill that bars corporate entities from turning single-family homes into rental units. And Connecticut lawmakers have looked into banning private equity firms from purchasing single-families, duplexes or triplexes entirely.
Investors said New York’s proposed waiting period could limit the construction of new units in the future.
“Anything that restricts the free market is problematic, and I think institutional participation in the homeownership market is more positive than it’s been given credit for,” said John Isakson, CEO of the Atlanta-based ARK Homes For Rent. “We have a shortage of homes, whether it’s rental or ownership, and we need to increase the stock.”
Sam Chandan, director of New York University’s Chao-Hon Chen Institute for Global Real Estate Finance, said he believes state lawmakers’ focus on limiting private equity’s investments isn’t tackling the root causes of the state’s housing shortage.
“Given the challenges we have around housing affordability, high interest rates and limited supply, the focus on institutional investors as part of the political discourse isn’t unexpected, but it’s not necessarily supported by the data,” he said. “The real challenge for us is the rise in mortgage rates and the availability of skilled labor, cost of materials, and how we zone developments.”
That hasn’t stopped investors from purchasing single-family lots in certain parts of the state. Last year, corporate investors (not individual ones) owned about 248,000 residential properties in New York state, or about 6.2 percent of the state’s housing stock. That included 76,000 properties in the New York metro area, or just over 10 percent of the region’s residential parcels, according to the Center for Geospatial Solutions at the nonprofit Lincoln Institute of Land Policy. During the third quarter of 2024 alone, investors purchased 2,345 homes in the New York City metro area, or 16.7 percent of all residential properties, a Redfin analysis found
Private equity investors typically hoovered up houses in low-income neighborhoods in the New York metro area such as Mount Vernon and Peekskill, as well as
in western New York’s cities. In Rochester, for example, institutional purchases of single- family homes rose 220 percent between 2021 and 2024, one of the largest increases in the nation’s top 100 metro areas. Three out-of-state firms alone accounted for the purchase of 415 single-family homes in Monroe County over the past four years, the Rochester Business Journal reported
“In almost every market we’ve looked at, they’re concentrated in low- to moderate- income, high-minority census tracts where house prices are relatively low but rents are still high,” said George McCarthy, president and CEO of the nonprofit Lincoln Institute of Land Policy. “What they’ve found out is that low-income people tend to pay their rent on time, so their capitalization rates are going down.”
State lawmakers are discussing several additional measures to discourage private equity firms from buying New York homes ahead of the April 1 budget deadline.
State Sen. Liz Krueger of Manhattan and Rep. Michaelle Solages of Nassau County introduced a bill, the End Hedge Fund Control of New York Homes Act, that would impose a 50 percent tax on hedge fund purchases of one- to four-family homes. The bill would also force managed fund companies to lower their holdings of single-family homes by 10 percent each year over the next decade. The revenue raised would go toward a state-managed grant program helping families with their home down payments.
Rep. Linda Rosenthal of Manhattan, who chairs the Assembly’s Committee on Housing, also proposed a measure that would prevent corporate entities that own more than one single-family rental from deducting interest or depreciation values on their properties.
Rosenthal wasn’t sure whether the Assembly would include the private equity policies in its one-house budget, typically released in the second week of March, but said that the governor’s measures had broad appeal in both legislative houses.
“Many people would support this because of the problem of private equity firms gobbling up homes and inflating prices,” she said. “It’s already happening in parts of upstate, and that’s what’s giving me and others pause, because rapacious buying up of one- to two-family homes is driving up the cost and eliminating the possibility that families can stay or settle in those areas.”
By Patrick Sisson
What President Trump’s golden visa proposal could mean for commercial real estate investment
t’s not surprising that the often transactional nature of President Donald Trump’s policy decisions might carry over to commercial real estate. But what investors and developers want to know is whether his proposal for a so-called golden visa — in effect, selling access to a U.S. green card for $5 million to attract high-net-worth investors — will end up benefiting the real estate industry or hampering some of its access to foreign capital.
“The program’s announcement has
already triggered alarm bells in the real estate sector, an industry Trump knows very well,” said Murat Coskun, managing partner at Get Golden Visa, a consultancy for those hunting for residencies in a range of nations. “The program isn’t focused on real estate investment, but talks have started about a possible rise in demand. Wealthy individuals who can invest $5 million often buy luxury homes in the U.S.”
During his March 4 address to Congress, President Trump declared his golden visa program would “allow the most successful job-creating people from all over the world to buy a path to U.S. citizenship.”
What both intrigues and worries the commercial real estate world is that this gold card concept doesn’t require these job creators to fund real estate development necessarily. Plus, it could crowd other avenues for drawing foreign real estate investment.
“The primary concern for folks on the real estate side is that it’s all really unclear,” said Sam Chandan, founding director and professor at New York University’s ChaoHon Chen Institute for Global Real Estate Finance. “There is no data to help us quantify how much capital this will raise. But, if it comes at the cost of the EB-5 program, which for some projects has been a meaningful source of capital, that’s problematic.”
The current vehicle for foreign investment in U.S. real estate, the EB-5 Immigrant Investor Program, requires at least an $800,000 investment in a U.S. business or property in exchange for a green card. EB-5 attracts “outstanding demand,” said Basil Mohr-Elzeki, managing partner and head of the Americas for Henley & Partners, a foreign investment advisory. It was instrumental in financing marquee projects such as Hudson Yards, and has a significant backlog of interest from investors in China and India.
‘Typically, this type of offshore capital will pay top dollar for newly built or newly renovated and stable office product.’
But even the broad outline of the golden visa program has intrigued investors, despite some expectation that it won’t necessarily have a real estate component. Currently, if you’re a green card holder, you are taxed on worldwide income, regardless of where you stay. Golden visa holders, on the other hand, would not be subject to taxes on their overseas income, according to the administration. Getting expedited access to the U.S. market without that additional tax burden could be a potent selling point.
“We’re getting two types of calls,” said Mohr-Elzeki. “One is, ‘I want to get in on the EB-5 at that threshold before the prices go up.’ And the other is, ‘Tell me about this gold card. What are the tax implications? What are the residency requirements? How fast can I get citizenship?’ We’re seeing quite a bit of interest.”
Other analysts believe the prognosis for the golden visa remains much less understandable. Coskun pointed out that in Europe, deals using existing golden visa-like programs made up less than 1 percent of all property transactions. Chandan argues that it’s not certain how many investors will actually be able to take advantage of the program and avail themselves of the opportunity. Without any concrete details about how income from the golden visa will be allocated — and if that allocation will benefit real estate and its access to capital — it’s uncertain to him how this will help or hamper the industry.
“EB-5 is structured in a way you know that much of the benefit does flow to real estate,” Chandan said. “But, with this program, it’s not clear that real estate would be a beneficiary.”
Replacing EB-5 with the golden visa would, in effect, “wipe out and destroy” the regional investment industry that has formed around the program since it was initiated 35 years ago, said G. Lamont Blackstone, a commercial real estate consultant and urban redevelopment specialist. EB-5 has been instrumental in raising capital for a variety of real estate projects, Blackstone said.
However, some argue that it really is as simple as getting high-net-worth investors more comfortable with investing in the U.S. Alex Foshay, Newmark’s executive vice chairman and head of international capital markets, believes this idea will be a boon to U.S. commercial real estate, as private family offices and private investors — such as Pontegadea
Investments, the family office of Zara founder Amancio Ortega; Pontiac Land from Singapore; or the Reuben brothers from London — already provide a significant and rising share of overseas investment into U.S. real estate.
“Looking at the golden visa program, I see it as only a benefit,” said Foshay. “I see it as putting the U.S. on an equal footing to many of the other markets around the world that have systems that allow these wealthy individuals to have permanent residency in their countries.”
Foshay ultimately believes the program will provide a lot more liquidity at the trophy end of the market, increasing the demand and asset prices for high-end offices in gateway cities.
“Typically, this type of offshore capital will pay top dollar for newly built or newly renovated and stable office product, and allow the more nimble U.S. equity to take on the value-add initiatives immediately below that,” he said. “It will create more depth and a better functioning market.”
It also would help steer more of a growing pool of international investment from high-net-worth individuals and families to the U.S. from Europe, China and, increasingly, Vietnam, South Korea and Brazil. This very rich segment of investment migration has become more populous, said Mohr-Elzeki, with wealthy families looking to diversify. If the U.S. became a more accessible market, and investment didn’t adversely impact taxation, it would make the gold card quite attractive.
“I think what Trump wants to do is to remarket this, to kind of remind the millionaires that, ‘Hey, you know we exist, please look at us,’ ” Mohr-Elzeki said. “If they make it attractive in terms of residency requirements, or how long you have to stay in the country and the tax aspect — if they make that attractive, I think that they can have a decent flow into the program.”
The concept exists in other countries, offering a pathway to citizenship in exchange for investment, either real estate-focused, donation-based or in specific companies. New Zealand charges 10 million New Zealand dollars ($5.7 million U.S.) to get residency, while Malta has an 18-month pathway to citizenship with a nonrefundable 1 million euros donation ($1.09 million U.S.). In that respect, said Mohr-Elzeki, $5 million for the U.S. “doesn’t seem crazy.”
Investors still need to see — in
addition to concrete details about the program’s procedures — whether the gold card will replace or complement the existing EB-5 program. Commerce Secretary Howard Lutnick has said the program will replace EB-5
Typically, the U.S. government, specifically the Commerce Department, would be consulting with different firms and their government advisory teams to help shape the rules and regulations around a program like this, but it’s been quite silent, said Mohr-Elzeki. For instance, EB-5 requires investors to reveal the source of their funds. Would expedited gold card access require the same amount of scrutiny?
Replacing the EB-5 program outright would require an act of Congress, said NYU’s Chandan, so it might be easier for the Trump administration to simply wait until 2027, when the program is set to expire or be renewed. There’s also significant questions about the application process and legal framework of the program, even the evaluation criteria for determining who qualifies, said Coskun of Get Golden Visa.
If the gold card replaces EB-5, raising the threshold for investment from $800,000 to $5 million would cut out a significant number of smaller investors. But Henley & Partners’ internal statistics found that there are 2 million millionaires in the world with $5 million in liquid, investable assets, and the U.S. ranked second in attracting millionaires via migration in 2024, behind only the United Arab Emirates.
Mohr-Elzeki believes some millionaires, but not all, would be interested in the program, as the U.S. remains quite an attractive place for the ultrawealthy. Families would want their kids to grow up here. U.S. firms might even use the program as a way to provide citizenship to key employees. He believes that, while there would be fewer applicants, the golden visa would be beneficial to the United States in terms of revenue.
While details remain scarce and no deadlines have been set for implementation, the administration seems to be vigorously pursuing the idea, with both the president and Lutnick commenting on the concept.
“They’re putting it up as an idea to see what the level of reaction is,” said Foshay. “From our perspective, in our industry, I believe this would be an enormous positive.”
Andrew Cuomo would like your vote for New York mayor
— you know, the one that was probably going to Eric Adams
n trading Eric Adams for Andrew Cuomo — two scandal-ridden candidates for New York City mayor — the question of who has the heavier political baggage can be pretty subjective.
With Adams, it’s his still pending corruption charges and alleged quid pro quo with the Trump administration to get his criminal indictment tossed. With Cuomo, it’s baggage from when he was forced to resign as governor in 2021 amid sexual misconduct probes, and then later allegations that thousands of deaths resulted from his pandemic-era requirement that nursing homes in the state take in people with COVID-19.
What you end up with is a question of whether a candidate with so many political enemies can govern considering the collaborative nature of any executive position. It’s an important question for New York’s commercial real estate industry, as in the past it has cheerfully supported both — and vice versa.
“He will buffalo the City Council,” Jordan Barowitz, principal of consulting firm Barowitz Advisory, said of Cuomo. “The statutory power dynamic between the state legislature and the governor is pretty advantageous to the state legislature just in terms of the powers they have, constitutionally. … It’s not the same in the relationship between the City Council and the mayor. The mayor is an empowered executive, and the council has land use, budgetary — all that stuff. But the mayor, vis-a-vis the council, is much more powerful than the governor vis-a-vis the legislature.”
During Mayor Bill de Blasio’s time in office, there was a notable gulf between City Hall and the governor’s office under Cuomo, a situation that could be reprised if Cuomo took office once again. The governor would be his former No. 2, Kathy Hochul.
In August 2021, as Cuomo’s
By Mark Hallum
administration was on the skids and women came forward with their stories of abuse, Hochul called his alleged misconduct “repulsive” and “unlawful.” U.S. Sen. Kirsten Gillibrand also said the allegations, which Cuomo still denies, were “serious and deeply concerning.”
U.S. Rep. Ritchie Torres of the Bronx also called for Cuomo’s resignation at the time but is now endorsing him for mayor.
The Cuomo campaign — which launched officially at the start of March — did not respond to a request for comment.
The two candidates present a stark choice. On one hand you have Adams, who had his time in the sun as first choice of the real estate industry and pushed through the widely popular — if perhaps insufficient — City of Yes for Housing Opportunity. Calls for Adams to resign or for Hochul to remove him from office after a major exodus of top aides pertaining to the federal investigation have the incumbent against the ropes.
Meanwhile, polls show Cuomo is popular with voters, and several real estate leaders have told Commercial Observer that he is their first choice at the voting booth thanks to his record while governor of making major infrastructure projects a reality and his mostly business-friendly policies.
Scandals of misconduct aside, real estate leaders are taking a sober view of both candidates.
“[The] 2019 Housing Stability and Tenant Protection Act — aka the Housing Destruction Act — significantly restricted rent increases on regulated apartments, making it harder for landlords to remove units from rent control and reducing their leverage in lease negotiations,” Adelaide Polsinelli, vice chairperson of brokerage Compass, said of state legislation that Cuomo backed and signed. “While he was effective in crisis management and driving large policy changes, his tenant-friendly
reforms were a major blow to landlords and developers.”
To Polsinelli, it’s simply a matter of whether voters will value tenant protections or a less hands-on approach to housing policy.
“Unlike Cuomo, Adams has not aggressively pursued strict rent regulations, making him more favorable to property owners,” Polsinelli added. “However, his struggles with crime reduction and budget cuts have hurt property values, especially in the retail and commercial sectors. Additionally, while he promotes growth-friendly policies, he has yet to execute large-scale real estate initiatives effectively.”
The damage may be irreversible for the most part regarding the 2019 housing law, which prevents landlords from raising rent to market value on recently vacated rentregulated apartments, considering that property owners post-pandemic are already behind with depreciated buildings, insurance rates, higher labor costs, rising inflation and stubbornly high interest rates, according to a source familiar with the issue.
Kathryn Wylde, president and CEO of the nonprofit business group Partnership for New York City, said she believes Cuomo can function as mayor.
“Former Gov. Cuomo is good at building alliances with other political forces when he needs them,” Wylde said in a statement. “Whether it’s the carrot or the stick, he knows how to use both to his advantage. At a time when New York is facing serious challenges on many fronts, I have no doubt that he would figure out how to manage relationships with Washington, D.C., and Albany to the city’s advantage.”
Can voters, specifically those in commercial real estate, overlook the damage done by the 2019 housing law? We’ll find out in June when the Democratic primary weeds
out the 11 candidates running for mayor.
Apart from Adams and Cuomo, other names on the ranked-choice mayoral ballot include New York City Comptroller Brad Lander; former city Comptroller Scott Stringer; state legislators Zohran Mamdani, Zellnor Myrie and Jessica Ramos; attorney Jim Walden; former hedge fund manager Whitney Tilson; and former Bronx Assemblymember Michael Blake.
Earlier this month, New York City Council Speaker Adrienne Adams also threw her hat in the race.
As for the incumbent, Adams’s legal problems are severe and have spread to the national level. He was accused of
engaging in a straw donor scheme with the Turkish government that helped him get an additional boost from the New York City Campaign Finance Board’s matching funds program, as well as receiving illegal travel perks. In September, federal prosecutors indicted Adams and cited a monumental body of evidence against him that included text messages.
Prison time seemed possible for Adams, who became the first sitting New York mayor in history to be indicted on such charges.
Then Donald Trump won the White House in November. Adams held multiple meetings with the once and
current president, who soon ordered his Department of Justice to drop the charges. Trump’s order prompted three prominent resignations from the U.S. attorney’s office and the Justice Department, but a counsel for the Southern District of New York reviewing the case has recommended that the courts abide by the presidential directive to drop the charges.
Still, for all that, it might be Cuomo with the steeper road to political redemption.
“I doubt there’s been a candidate for mayor that has one-tenth the amount of scandal baggage that Andrew Cuomo has,” John Kaehny, executive director of watchdog group Reinvent Albany, told CO. “To me, the
‘While he was effective in crisis management and driving large policy changes, his tenant-friendly reforms were a major blow to landlords and developers.’
of defamation.
Cuomo is also still dealing with a probe into his $5 million pandemic book deal for a memoir titled American Crisis: Leadership Lessons From the COVID-19 Pandemic, which he wrote as the state of emergency was unfolding. The state Commission on Ethics and Lobbying in Government attempted to reclaim proceeds he gained in the deal, claiming that he was given permission to write the book on the condition that state resources were not used.
The commission sued Cuomo in New York State Supreme Court, claiming he breached that condition. In February, the state Court of Appeals ruled against him.
most interesting thing happening is how do you reconcile that, and how does the press kind of process that?”
Cuomo has survived scandals before, including supposedly coming up with a controversial slogan for his father’s unsuccessful 1977 campaign for mayor against Ed Koch. The slogan utilized a slur against LGBTQ people, one that rhymed with “Cuomo.”
In December, just weeks after Charlotte Bennett, Cuomo’s primary accuser in the sexual misconduct controversy, withdrew her legal claims against him, the former governor went on the offensive by filing a legal notice that in turn accused Bennett
In the end, if Cuomo were to win, his biggest problem may not be his relationships with city officials, according to Kaehny. Instead, the real snags would come from Albany, considering the fact that any governor has the ability to remove mayors. New York City’s mayor also is unable to do things like raise taxes beyond the 2.5 percent limit, install speed cameras, or even change the speed limit without the state’s blessing, Kaehny said.
“If you look around at the attorney general, Tish James, or the governor, these are people who Cuomo has engaged in active hostilities with. They don’t like each other,” Kaehny said. “That, to me, is another problem for Cuomo as a candidate, because that ain’t ancient history, right? There’s a massive potential for disruption for him around the corner. So it’s hard to see him as being anointed.”
It wasn’t all Trump all the time at the annual MIPIM real estate conference in France last week — but the U.S. president loomed larger than anything else
t was clear from the first question during the March 18 keynote of the annual MIPIM global real estate convention in Cannes, France, what the topic on everybody’s mind was going to be this year.
Mario Draghi, the former Italian prime minister and the ex-president of the European Central Bank, was asked his thoughts about President Donald Trump and what the United States’ relationship with Europe is going to be like now.
Draghi demurred.
“People like me, and most of you, have grown up basically thinking that we share with the United States much more than we have something to share with Russia or with China,” Draghi said. “The question that is deep, and without an answer, is will all commonality continue … during this cultural revolution that is taking place in the United States?”
“The big ‘T,’ ” as AEW Capital Management Europe CEO Rob Wilkinson put it, was on everybody’s mind during the convention as they wondered what the impact of Trump’s policies, including tariffs, would be as they try to finance deals, get developments off the ground, convince Europeans to invest in U.S. real estate, or branch off to create European divisions.
One U.K. property owner described the situation as a “cocktail of confusion” for the real estate industry, which is sometimes scrambling to keep up with the latest Trump news while simultaneously worrying about a potential recession in the U.S. And the political situation seems to be top of mind for people in the industry more so than in years past.
“The conversation around geopolitical uncertainty is real,” said Michael Lehrman, president of the United Kingdom
By Nicholas Rizzi
for Newmark and former CEO of BGC Real Estate. “Investors have told us they can’t remember a time when the market talked about geopolitical uncertainty so much and how this will be reflected in pricing.”
Lehrman added that the main worry was how all of this was going to “affect real estate fundamentals.”
An American working for a London developer, who asked not to be named, said the issue has caused “paralysis to everyone” over the “instability” of the quick, and hard-topredict, pace of Trump 2.0.
While candidate Trump came up a bit during MIPIM last year, most people in the industry were hopeful that once the election ended, the topic would exhaust itself. That clearly hasn’t been the case.
“The concept of everything post-election that things are going to be stable is not going to pan out,” said Max LaVictoire, managing director of investor relations for student housing developer Landmark Properties, which recently ventured into the U.K. market.
Instead, Trump’s quick and sweeping policy decisions — from giving Elon Musk near carte blanche to gut the federal government to berating Ukrainian President Volodymyr Zelenskyy in front of cameras in the Oval Office — has everybody scratching their heads about what will happen next. (It should be noted that, whether intentionally or not, the U.S. booth was across the aisle from the Ukraine booth on the MIPIM convention floor this year.)
“When the election happened, people were feeling more bullish because people thought it was going to be a pro-business administration,” said Thibault Adrien, CEO of single- family rental operator Lafayette Real Estate. “But with what’s going on right
called Marquis Homes. “Vendors have not increased their pricing on our ongoing projects, so we have to rely on analysts in the space.”
Adrien said he’s seen some projections that showed tariffs will increase his construction costs 2 to 3 percent, something he’s not too concerned with. “It’s completely manageable for us, especially because we do [construction] in-house, so I feel like we have better control,” he said. “It shouldn’t impact our underwriting on the 1,500 lots that we need to build.”
Sara Queen, managing director and head of real estate equity for MetLife Investment Management, said during a panel that when she returned to New York from the convention she was going to have to relook at the construction deals MetLife has in its pipeline and evaluate if they still make sense.
“One of the things that we have to do next week is we have to go back through and [see] whether we locked in rates on steel,” Queen said last week. “If we haven’t, is it worth continuing to spend money on it if we know it’s not going to pencil?”
And, while people are hoping the U.S. tariffs are going to just be a temporary measure, Draghi warned people during his keynote not to get their hopes up.
now I think people are just stopping and trying to understand — if there’s anything to be understood — what’s going on right now.”
Both LaVictorie and AEW’s Wilkinson said Europeans were thinking about starting to return to invest in the U.S. before the election, but the relative chaos from the White House has caused them to pause plans and retreat back to their home markets for the time being.
“Let’s just wait and see, focus back on my market,” Wilkinson said of investor sentiment. “It’ll come back, but it’ll be a slower burn than the GFC [Global Financial Crisis].”
The Trump administration’s tariffs policy has caused the most uncertainty for the real estate industry, with fears it could turn into a global trade war and lead to a recession.
Trump has imposed — then pulled back, then imposed — numerous tariffs on different countries’ goods. He most recently threatened a 200 percent tariff on wine and champagne coming from Europe, and implemented a large 25 percent one on steel and aluminum coming into the U.S. from anywhere. The latter is not exactly the best news for developers who rely on those materials for construction.
Europeans hoping for the perspective of heavy hitters at the convention’s annual panel “Trends in U.S. Real Estate and Capital Markets” were disappointed as those bankers swiftly dodged the question during the panel’s Q&A.
MIPIM attendees on the development side said they’ve been monitoring the potential effect on material costs the tariffs could have, but so far it’s been hard to quantify.
“We have not seen the impact yet,” said Adrien, who has a build-to-rent platform
“People think it’s going to be temporary — well, it’s not going to be temporary,” he said. “Why would people say that tariffs would be a source of tax revenue — which is something the U.S. government is counting on — if they were going to be temporary? They’re going to stay.”
Tariffs aside, many people said the questions around Trump haven’t squashed any deals between U.S. and European firms so far. Rather, they insist the uncertainty is something that has to be baked into dealmaking, and that it may delay some deals as people wait to see how it all shakes out.
But one thing it has done is create an unease among some Americans traveling to the continent and talking to European investors.
“It’s starting to feel a little bit embarrassing to be American again,” said Aaron Block, co-founder and managing partner of proptech venture capital firm MetaProp, adding he hasn’t felt this way since the days of President George W. Bush. “I feel like we’re right back there.”
Of course the convention wasn’t all dominated by talk of Trump or of the rain storms throughout the week. The main mood at MIPIM was positive as people expect more deals to close this year.
Dean Shapiro, global head of development for Oxford Properties Group, said other recent MIPIM conferences felt more like they were being used for information gathering for investors, but that has shifted for 2025.
“The mood is certainly better every year — people seem to be investing again,” Shapiro said. “There’s always caution, but it feels more transactional now.”
And Shapiro wasn’t the only one singing that positive tune about the industry.
“The sentiment has been a lot positive,”
Landmark’s LaVictoire said. “People are looking for a reason to do something as supposed to not do something.”
Oxford, the real estate arm of the Canadian pension fund Omers, has been looking for opportunities to invest in office and retail projects, especially in New York, as the recovery of those markets seems to be in full swing.
“We see opportunity, we see history repeating itself,” Shapiro said, pointing to the recovery in the wake of the GFC, where there was a lack of high-quality office space on the market — something Oxford partnered with Related Companies to address with the massive Hudson Yards project. “There still is an awful lot of toxicity on the whole idea of office, but it’s irrational.”
Indeed, what a difference a year makes regarding office. Many last year viewed the asset class as a four-letter word. That’s started to change in certain markets, especially New York, where Manhattan’s strength spurred Blackstone for one to make its first office acquisition in the borough in almost three years.
Michael Lascher, a senior managing director and global head of real estate debt capital markets for Blackstone, confirmed during a panel that the private equity giant was under contract to buy a 49 percent stake in 1345 Avenue of the Americas from Fisher Brothers for a yet-unknown price.
“[It’s a] really high-quality office building, a great partner, and really a testament to the strength of the New York City office market,” Lascher said.
Panelists said that “banks are back” with liquidity to lend again, while others said the time is ripe for certain developers.
“There’s never been a better time to be a borrower,” said Laurent Morali, the CEO of Kushner Companies, during “The Big Picture for Real Estate Today” panel. “If you’re looking to borrow money to refinance an asset or acquire an asset, you’re going to get a full array of proposals from all types of lenders.”
On the technology side, MetaProp’s Block agreed that it feels like “the clouds have parted” and the mood’s sunnier again. And much of the attention has been on the artificial intelligence market, with Block joking that “six out of 10 of the people I met have changed their surname to A.I.”
However, even with the increased optimism, there’s a realization in the industry that it needs to temper expectations for 2025.
“We’re still not completely out of the woods,” AEW’s Wilkinson said. “People have adapted, they’ve seen the adjustments. They still feel there’s a little bit of inertia in the market.”
Peggy DaSilva, the head of asset management for PIMCO Prime Real Estate in the United States, said the mantra of staying alive until 2025 might need to be altered as people adjust their expectations for the year.
“It’s hardly ... back to what we were seeing in the early 2020s,” DaSilva said during a panel. “Hopefully, we’ll get there. Maybe now we need a slogan for 2026.”
CANNES DO: Former Italian Prime Minister Mario Draghi (left) was MIPIM’s keynote speaker. Meanwhile, there was a panel (above) on trends in commercial real estate in the U.S.
HOUSING AND HUDDLES: In between panels such as the one above about housing, MIPIM attendees networked — and discussed the fallout of new U.S. policies.
The Plan
WHO’S WHAT AT TERMINAL WAREHOUSE
DEVELOPERS: L&L HOLDING AND COLUMBIA PROPERTY TRUST STRUCTURAL
ENGINEER: DISIMONE CONSULTING
ENGINEERING NEW ADDITION
DESIGNER: COOKFOX ARCHITECTS ORIGINAL
DESIGNER: GEORGE MALLORY
By Amanda Schiavo
They think they can, they think they can, they think they can finish Terminal Warehouse in West Chelsea.
The preservation and restoration of this historic multi-block building involved significant structural modifications, as well as integrating new and old elements of the property’s interior and exterior, to create what will eventually become premier Manhattan office and retail space — the bulk of which is still under construction.
“One of the challenges for this building, for DeSimone, was that it combines pretty much every structural system imaginable,” said Rodolfo Medina, associate principal with DeSimone Consulting Engineering. “The new construction is a combination of concrete, steel and the
existing mainstream with timber.”
Terminal Warehouse is a 130-year-old landmarked building at 11th Avenue and West 28th Street. In its previous life, the warehouse was a bustling hub with freight trains coming through its arched tunnel directly into the core of the building, making it easier to load and unload goods.
Not wanting to paint over the building’s history, part of the newly designed interior of Terminal Warehouse includes views into the tunnel floor with lighting that showcases those train tracks, giving tenants a literal window into the building’s past.
“The cutout is meant to reveal the train tracks underneath,” Medina said. “So as you walk you’ll be able to see the original structure that is carrying through the building.”
A significant challenge that came
with redeveloping the warehouse was addressing the lack of light in the cavernous space. So, the design and architectural teams worked together to let in more. One way they did this was to create an outdoor public space adjacent to the tunnel with massive floor-toceiling windows.
“This was the biggest modification in the middle to allow some sunlight to come in,” Medina said. “This outdoor space was entirely new, to allow light to come in.”
To make room for this park-like area, the team had to tear out some floors, and you can see lines on the walls surrounding the outdoor space marking where the floors used to be.
As you walk along the tunnel glancing left and right, there are openings to corridors highlighting what life will look like when construction is done and tenants
move in. The temporary certificate of occupancy is expected this spring, according to a source close to the project.
Some areas along the corridor will be home to retailers. About 6 percent of the gross area of the building has been designated for retail, while 1.1 million square feet will become office. Tenants will have access to 100,000 square feet of outdoor space between the private terraces on some of the floors, the amenity rooftop, and the tunnel courtyard.
Renderings in some of the corridor openings showcase how the property will be transformed into cafe, event and coworking spaces, giving employees access to a place to escape while doing their work, while the tunnel itself can be used as a massive event venue. Indeed, the Michael Kors fashion show took place at Terminal Warehouse in February.
READY TO WARE: The 130-year-old Terminal Warehouse in West Chelsea “combines pretty much every structural system imaginable,” said Rodolfo Medina of DeSimone. The old train tracks are visible from the main tunnel floor (bottom right), which also has adjacent outdoor public space. The tunnel itself can be used as an event venue. (First up, Michael Kors did a fashion show in February.)
April 3 | Wynwood Plaza, Miami, FL
LISSETTE M. CALDERON Founder & CEO Neology Development Group
DANIEL LEBENSOHN Co-CEO & Founder BH3 Management
HECTOR DELATORRES CEO Cymbal DLT Companies
FERNANDO D NUÑEZ Y LUGONES Co-Founder & CEO Vertical Developments
RYAN SHEAR Managing Partner PMG
BEN MANDELL Principal Tricera Capital
NELSON STABILE Principal Integra Investment ALFONSO COSTA JR. C0O Falcone Group
AARON STOLEAR President of Development 13th Floor Investments
RYAN DOYLE Sr. Director, Originations, Southeast Nuveen Green Capital
DAVID MARTIN CEO Terra
ALLIE EICHNER President Continuum Company IAN BRUCE EICHNER Chairman & CEO Continuum Company
RUSSELL GALBUT Co-Founder & Founder Crescent Heights & GFO Investments
HARVEY HERNANDEZ CEO Newgard Development Group
CAMILO MIGUEL JR. Founder & CEO Mast Capital
ANDREW TILL Chief Operating Officer and Principal Baron Property Group
NITIN MOTWANI Managing Partner Miami Worldcenter Associates and Merrimac Ventures
ISAAC TOLEDANO CEO BH Group
GREG NEWMAN Senior Managing Director Bank OZK
ZACHARY DARROW Chairman DarrowEverett LLP MODERATOR
TIM PETERSON CEO Altman
HORATIO W. JONES IV Managing Director –Multifamily Capital Wells Fargo MODERATOR
UPCOMING EVENTS
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Level Ten at Starrett-Lehigh, New York
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New York
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CUNY Graduate Center, New York
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New York
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June 24
Paramount Group, New York
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