Articles of the week ending September 13th
Why New York’s Office Market Is in Limbo
By Keith Larsen, The Real Deal
New York’s commercial real estate market remains stagnant in a state of “limbo,” with low deal volumes, high vacancy rates, and uncertainty about future recovery, while lenders continue to extend loans instead of foreclosing, and few transactions provide clarity on pricing.
U.S. bank profits overcome drag by credit cards, office loans
By Katanga Johnson and Katherine Doherty, Bloomberg
Banks exhibited stronger profits in the second quarter despite rising stress in credit-card debt and commercial real estate loans, with net income increasing over 11% to $71.5 billion, though concerns about high unrealized losses and the overall economic outlook persist.
Related Companies, Friends of High Line War over Rezoning
By Erik Engquist, The Real Deal
Related and Wynn Resorts face significant challenges in their $12 billion development plan near the High Line due to community opposition and zoning complexities, particularly from the Friends of the High Line, which argues that the casino would obstruct views and negatively impact the area, highlighting the potential for political pushback amid the rezoning process.
How Gensler Cracked the Office-to-Residential Code
By Suzannah Cavanaugh, The Real Deal
Gensler’s conversion scorecard algorithm analyzes office buildings for residential conversion by evaluating key data points to identify viable projects, potentially democratizing access to this niche for developers while still requiring human expertise to address financial and zoning complexities.
Special Servicing Rate Continues Rising, Office Reaches 11-Year High
By Maddy McCarty, Bisnow
The CMBS special servicing rate reached 8.46% in August, marking a three-year high, driven largely by a significant increase in office loans, which had the highest special servicing rate at 11.91%, the highest since 2013.
Something For Everybody_ How Design Transforms Offices Into Branded Experiences
By Elizabeth Reyn, Bisnow
Modern office design, inspired by retail strategies, enhances employee engagement and brand representation by creating versatile, branded environments that promote belonging and accommodate diverse work styles.
Related Files Demolition Plans For 625 Madison, Paving Way For New Luxury Building
By Ciara Long, Bisnow
The Related Companies has initiated demolition plans for the 17-story office tower at 625 Madison Ave, which it purchased for $632.5M, to replace it with a luxury condo and hotel project, as part of a growing trend in New York City to demolish obsolete office buildings in prime locations.
Larry Silverstein Continues Quest For World Trade Center Expansion, 23 Years Later
By Sasha Jones, Bisnow
Larry Silverstein is pursuing the completion of 2 World Trade Center and expanding Lower Manhattan, while also exploring residential developments and office-to-apartment conversions in response to changing market demands.
Investors in 1140 Sixth Avenue’s mortgage face a 60% loss_ rating agency
By Aaron Elstein, Crain’s New York Business
Investors in 1140 Sixth Avenue face potential losses of up to 63% on a $99 million mortgage due to the property’s high vacancy rate and deteriorating financial conditions, while American Strategic Investment’s market capitalization has fallen to $23 million despite a property portfolio valued at $600 million.
Bryant Park Grill may close when its lease ends in May 2025
By Aaron Elstein, Crain’s New York Business
Bryant Park Grill, a high-performing restaurant with $28 million in annual revenue, faces uncertainty as its lease expires next May and potential new operators have shown interest, prompting staff concerns and pleas to preserve a beloved cultural institution in NYC.
Bridgewater nears deal for first NYC office
By Natalie Wong and Katherine Burton, Bloomberg
Bridgewater Associates is close to finalizing a lease for its first Manhattan office at 295 Fifth Ave., marking a significant shift from its Connecticut headquarters, while allowing some employees more location flexibility amidst a struggling New York office market.
SL Green is named special servicer to the Helmsley Building
By Aaron Elstein, Crain’s New York Business
SL Green has been appointed as the special servicer for the Helmsley Building, which has defaulted on its mortgage, potentially leading to a conflict with current owner RXR Realty as both firms are large Manhattan landlords, with SL Green able to recommend foreclosure on the property.
Capstone Equities Buying Savanna’s 360 Lexington Avenue for $65M
By Rich Bockmann, The Real Deal
Capstone Equities and AmTrust RE are purchasing Savanna’s 360 Lexington Avenue for $65 million, a third of the $180 million price paid in 2019, due to declining occupancy and financial challenges faced by Savanna.