Ladies and gentlemen, it's time for year-end reflection. But instead of letting statistics put you to sleep, we'll be sharing lots of our favorite fun facts and phenomena from the ever-entertaining world of commercial real estate.
office redux. With so little space available and so much demand in Manhattan's best buildings, tenants are reluctant to relocate or expand, with disconcerting predictions that working from home and high interest rates will permanently destroy the market. Can't find room. Park and 6th Avenue, World Trade Center, Brookfield Place, Hudson Yards, Manhattan West, One Vanderbilt, One Bryant Park, and other premier towers have vacancy rates of 0 to 10 percent. (No more stats needed, I promise!)
A tale of two Chinas. Shanghai-based Fosun Wuholding purchased 28 Liberty Street in 2013 and has gone to great lengths to beautify, modernize and backfill the former Chase Manhattan Plaza, which is nearly 100% filled with office and retail space. did. The product has been so successful that it was reported this month that Fosun could sell it for more than double the $715 million it paid for it (a claim Fosun denies).
A different sad story unfolds at the Waldorf Astoria, which was acquired from Hilton by China's Anbang Insurance in 2014. The iconic hotel has yet to reopen after nearly a decade of failed construction work, after another Chinese company, Daya, took over when Anbang collapsed. . Hilton says wait until spring.
skyscraper twist. Built in the 1930s, two of the city's most iconic skyscrapers are thriving. Tenants such as Lazard and Deloitte are based at 30 Rockefeller Plaza, which is 70% owned by Tishman Speyer and the rest by Comcast, and home to “Saturday Night Live'' and “Saturday Night Live.'' It also includes the NBC studios for “The Tonight Show.” The Empire State Building is more than 90 percent leased after Empire State Realty Trust spent hundreds of millions of dollars in renovations and modernization.
But it's been a year of hell for two other skyline-defining landmarks. Chrysler Building leaseholder Abby Rosen's RFR is fighting to prevent foreclosure after being forced out of control of Queen of the Night Sky by landlord Cooper Union. The building is 40% vacant. Downtown, the Trump Organization's 40 Wall Street offices are more than 25% empty and retail stores are nearly empty. The building, which Donald Trump has dubbed the “Mona Lisa of real estate,” requires hundreds of millions of dollars in renovations to make it viable again.
Jeff Sutton time. Real estate is all about timing, and in 2023 and 2024, no one was watching the clock more than Jeff Sutton, owner of Wharton Properties. Capitalizing on the enthusiasm among luxury retailers to own the real estate that houses their stores, Sutton in January sold a three-story commercial apartment building at Fifth Avenue and East 56th Street to Gucci's parent company, Kering. It sold for a staggering $963 million. This followed the sale of two properties on the same street to Prada for $835 million.
From Germany with love. Munich Re, which has no real estate business, poured $1 billion into Big Apple real estate this year. The world's largest reinsurance company poured in petty cash to pay off Wells Fargo's $500 million mortgage at 330 Madison Avenue. A few months later, Munich Re spent another $500 million to acquire its partner at 320 Park Avenue, Mutual of America, making Munich Re the sole owner of the fully leased tower.
Please let me eat everything. SL Green, the city's largest commercial landlord, is also the city's hungriest. Daniel Boulud's incredible steakhouse, La Tete d'Or, opened this month at One Madison in SLG. So is the developer's just-opened Armani Ristorante at 760 Madison Avenue. In 2025, a new Carnegie Diner and fine Greek restaurant will open at 1185 Sixth Avenue. They join Eleven Madison Park, Fasano and Le Pavillon, all in SL Green. building.
Thoughts on the future. Will Brooklyn's Macy's soon become as memorable as the Dodgers? Albert Labos, leader of the group that bought the store's Fulton Street building for a minimum of $23 million, said he envisions the store to be home to an “experiential entertainment retailer.” Macy's said it has not yet decided whether to close the store. Walter O'Malley said this before moving the Dodgers to Chavez Ravine.
Please rearrange this. Class A Plus and all other classes aren't the only things that separate the value of office real estate. It's also between owners who can afford to “relocate” large sums of money and those who can't.
At 295 Fifth Avenue, Tribeca Investment Group, PGIM Real Estate and Meadow Partners completed a $350 million redesign to attract hedge fund Bridgewater Associates to its first office in Manhattan. Paramount Group is spending more than $250,000 to revitalize the deserted 60 Wall Street with a new podium-level façade and public spaces. This trend includes buildings as diverse as Lever House, 1290 Sixth Ave., Penn 2, 10 Grand Central, and the Seagram Building.
Wazoo has a new lobby and electronic upgrades. Features include luxurious air filtration systems, outdoor terraces, a fitness club, golf simulators (22 at 101 Park Avenue alone), pickleball courts, rooftop gardens, and more. However, it is a pity for owners who are not wealthy enough to boast only about their “convenient” location.
A leaky lease contract. This year has seen a rapid increase in large retail space transactions, long after leases have been signed. Brooklyn Fair & Market opened at One Manhattan Square three years after the deal was signed. Next month will mark two years since Simon Kim broke the news about the huge lease deal for the three-eatery complex at 550 Madison Avenue, and it's not even certain if it will open in 2025.
More expected openings than before are completely lost. Two years ago, it was reported that Asian grocery chain Hmart was opening a large store on East 86th Street. Now that I have more space, I'm going back to the market. And we're waiting for interior design chain Blind to Go in the former Dylan's Candy Bar space near Bloomingdale's — even though we reported on the lease more than a year ago. There is no sign that the construction work will be completed.
