This Week’s N.Y. Deal Sheet
New York City retail and office leases kept at a steady pace in Manhattan this week, while one developer narrowly avoided foreclosure with a $70M refinancing deal.
TOP LEASES
TIAA has subleased 39K SF of its space at 730 Third Ave. to risk advisory firm K2 Integrity, according to a release. The sublease, which runs through 2035, has asking rents in the mid-$60 per SF range. TIAA still has its headquarters at the property, while K2 will relocate from three floors at 845 Third Ave. to the Gensler-designed Midtown East office tower. JLL’s Scott Vinett handled the transaction for TIAA, while David Carlos and Andrew Dzenis of Savills worked on behalf of K2.
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GFP Real Estate has signed leases totaling over 20K SF with four tenants at its SoHo office tower at 594 Broadway, according to a release. The building, formerly known as the Lyons Building, is 12 stories high and spans 250K SF. Cybersecurity firm WithSecure renewed its lease for 6K SF on the 12th floor for 12 years. Athleisure brand Athleta took 5K SF for a five-year term, with Newmark’s Ariel Schuster and Justin Fantasia negotiating the deal on behalf of the brand. Green energy firm Xeal Energy took 5K SF on the eighth floor and McIntosh Group, a holding company specializing in audio equipment, took 3K SF on the third floor, both in one-year deals. Donna Vogel represented GFP in-house in all the leases. Vogel had assistance from Newmark’s Andrew Taub and Benjamin Birnbaum in the Athleta lease.
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George Comfort & Sons, along with its partners, Jamestown and Loeb Partners Realty, have leased 34K SF to communication firm Prosek Partners at 28 East 28th St., formerly 63 Madison Ave., according to a release. Prosek will move its NYC HQ to fill the entire 15th floor of the NoMad office tower and had representation from Cushman & Wakefield’s Jonathan Serko, Barry Zeller and Barry Garfinkle. The landlords were represented in-house by George Comfort & Sons’ Peter Duncan, Matt Coudert and Alex Bermingham. Prosek's current New York City office is at 105 Madison Ave., according to its website.
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Design and construction firm The McKissack Group also signed a lease with George Comfort & Sons this week, for 14K SF at 498 Seventh Ave., according to a release. The McKissack Group will move to the Midtown building in the first quarter of 2023 and will use part of the 17th floor as its headquarters in the 10-year lease. The office tower is now 94% leased, according to the landlord. Savills’ Erik Schmall and Scott Weiss brokered the deal for the tenant, while George Comfort & Sons was represented in-house by Andrew Conrad and Matt Coudert.
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Marx Realty’s 10 Grand Central has leased 10K SF to Indiana-based Merchants Bancorp, Commercial Observer reported. Asking rents were $84 per SF for the entire 24th floor, which the bank will use as its NYC headquarters in the 10-year lease negotiated for the tenant by Chris Foerch and Roi Shleifer of Savills. Mitchell Konsker, Benjamin Bass, Kip Orban, Carlee Palmer and Thomas Swartz of JLL represented the landlord in the transaction.
TOP SALES
Investment firm KKR and apartment operator Dalan Management have closed on the purchase of a Brooklyn apartment building at 260 Gold St. for $225M after signing the contract a year and a half ago, Commercial Observer reports. The acquisition was funded with $145M in debt from Square Mile Capital. The building and has 286 apartment units, 30% of which are earmarked as affordable units. It was part of one of last year's biggest multifamily deals in Brooklyn, when it was one of 15 buildings sold by Bruman Realty in a $1.3B deal. The deal was brokered by Cignature Realty’s Peter Vanderpool, who told CO the property didn't close with the rest of the portfolio while the 13-story building finished construction and leased up to tenants.
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Good Day Apartments LLC, owned by the Hofer family, sold two Bronx properties for $25M to a local private investor in an off-market transaction, according to a release. Hofer sold 2160 Newbold Ave. and 2200 Powell Ave. which combined span 149K SF across 159 apartments and 14 commercial units in Castle Hill. Alpha Realty’s Lev Mavashev and Yehuda Leser arranged the deal on behalf of the buyer and seller.
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A mixed-use building, whose current retail tenants include adult entertainment venue Peepshow and adult video store Gotham City, has sold for $20M. Trans World Equities is the buyer while Midtown-based real estate firm Adcort Realty is the seller, according to Crain’s New York Business. The building, which also features two residential units above its retail, last sold for $13.75M in 2018, The Real Deal reported.
TOP FINANCING DEALS
Family-owned development firm Real Estate Equities Corp. scored a $70M refinancing and construction loan from Parkview Financial for a Greenwich Village Class-A office building, according to a release. The borrower bought a 99-year leasehold interest on the land in 2017 and has already begun development on a nine-story, 62K SF office, replacing a demolished commercial building at 1 and 3 St. Marks Place. The deal came after construction was delayed due to the pandemic and other factors, leaving the borrower in need of restructuring its loans. The project — which narrowly avoided foreclosure after its original lender, Madison Realty Capital, filed a complaint in state court last August — is expected to be completed by June 2024.
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Capital One has agreed to lend an undisclosed amount in acquisition financing for a two-building luxury residential property known as the Addison in Downtown Brooklyn, Commercial Observer reports. The Dermot Co., in partnership with Dutch pension fund PGGM and USAA Real Estate, purchased 225 Schermerhorn St. from BentallGreenOak for $142.3M. The 271-unit property, which was built in 2011 and features ground-floor retail, last sold in late 2016 for $154.3M, adding up to a $12M haircut for BGO. A JLL team led by Jeffrey Julien, Rob Hinckley, Steve Rutman, Paul Spellman and Jonathan Faxon marketed the property. Paul Spellman was also part of the JLL team that brokered the loan, alongside Steven Klein and Christopher Pratt.
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Real estate development firm OKO Group secured a $754M loan from JPMorgan Chase for luxury hotel and condominium project Aman New York, Commercial Observer reports. The deal, which closed Friday, provides a three-year financing deal including a bridge loan and a condo inventory loan. The hotel, which is slated to open on Aug. 1, takes up the top 20 floors of the Crown Building at 730 Fifth Ave. and contains 83 rooms across 117K SF, while the residential portion of the Aman spans 95K SF for 22 units. Keith Kurland, Aaron Appel, Jonathan Schwartz and Adam Schwartz of Walker & Dunlop arranged the loan.
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Extell Development clinched a $125M loan from German commercial lender Helaba to refinance an Upper East Side development site at 1637 First Ave., Commercial Observer reports. The development, which sits between East 85th and 86th streets, will eventually reach 22 stories and will feature both market-rate and affordable units among its 459 apartments, in addition to ground-floor retail and a 30-foot-long yard at the rear of the building. Helaba previously provided $118.2M to Extell in 2018 for its purchase of the lot and development rights, The Real Deal reported at the time, although the development has faced lawsuits from tenants within two of the properties within the site.
CORRECTION, JUNE 14, 6:30 P.M. ET: A previous version of this article misstated the brokers on the K2 sublease. This story has been updated.
