This Week’s N.Y. Deal Sheet
The end of Q3 saw NYC’s office leasing activity spike upward dramatically, but interest rate hikes and a newfound sense of caution appears to be stifling loans and sales as CRE players brace for a recession.
TOP LEASES
Alternative asset manager Brevan Howard has expanded its lease at Fisher Brothers’ 1345 Sixth Ave. to take up 83K SF. The expansion takes the asset manager from one partial floor to the entire 19th and 20th floors, where asking rents were in the mid-$90s per SF. The property recently completed a $120M capital improvement project and last week also signed asset manager U.S. Realty Advisors for 8K SF. Brevan Howard was repped by JLL’s Dan Posy and Joseph Messina, while Fisher Brothers was represented in-house by Marc Packman, Clark Briffel, Charles P. Laginestra and Josh Fisher, as well as CBRE’s Howard Fiddle, Peter Turchin, Bill Iacovelli, Anthony Dattoma, Gregg Rothkin and Benjamin Joseph.
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The New York City School Construction Authority has signed a 350K SF lease at Savanna’s 1 Court Square in Long Island City, Commercial Observer reports. The city agency plans to relocate from 30-30 Thomson Ave., a half-mile away, to the building, formerly fully occupied by Citigroup, by 2024. The NYC SCA’s 20-year lease gives it 11 floors in the recently renovated building, where Target signed a 31K SF lease last summer. The deal was reportedly directly negotiated and neither party used brokers. Savanna continues to fill up the building after Amazon initially agreed to occupy 1M SF there as part of its HQ2 deal, but backed out of the $25B project.
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Partnership management technology company impact.com has signed for 18K SF at William Equities’ 136 Madison Ave., according to a release. Impact is relocating from the Empire State Building before the end of 2022, taking the entire 10th floor of the art deco office building. Eric Cagner of Newmark and Alex Leopold of CBRE represented the tenant in the deal, while Colliers' Mac Roos represented the landlord.
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Breaking Ground, which specializes in street outreach and supportive housing for homeless New Yorkers, has signed a 14K SF lease in the Garment District, according to a release. The nonprofit’s new digs are located at GFP Real Estate’s 26-story 520 Eighth Ave., which is 93% leased and is home to several other nonprofit organizations including The Jewish Community Relations Council of New York, IncludeNYC and SelfHelp. GFP recently refinanced the 96-year-old property with a new $87M loan from Conduit and has signed more than 150K SF of new leases in the past year. Matthew Mandell repped the landlord in-house, while Marc Shapses of Savills represented the tenant.
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The Durst Organization has signed new agreements with two tenants totaling nearly 17K SF at 1155 Sixth Ave., according to a release. Global investment firm Francisco Partners took 11K SF, moving from two blocks from its office at the Grace Building, with representation from Newmark’s Eric Cagner and Alex Leopold, while the landlord was represented in-house by Tom Bow, Rocco Romeo and Tanya Grimaldo. Bow and Romeo also repped Durst in its lease with law firm Jenner & Block for almost 6K SF on the 28th floor for 15 years. The law firm is adding to its four-floor spread directly above last year, bringing its total presence in the building to more than 72K SF. CBRE’s Lewis Miller, Jason Gorman and Zachary Weil represented Jenner & Block in the transaction.
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An Israeli coworking firm is opening its first NYC outpost in Rubenstein Partners’ mixed-use office and light manufacturing building 25 Kent in Williamsburg. Mindspace is taking 37K SF in the property, its fifth U.S. location. Developed as a partnership between Rubenstein Partners and Heritage Equity Partners, 25 Kent is a 500K SF, eight-story commercial office building across the street from Bushwick Inlet Park, the city’s newest waterfront park, recently opened to the neighborhood. The lease agreement was a direct deal, with the landlord and the tenant both representing themselves. Mindspace, which has locations already in San Francisco, D.C. and Philadelphia, raised $72M for a U.S. expansion last year.
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NY Life Insurance Co. has signed for 47K SF at One World Trade Center, Commercial Observer reported. JLL worked with the landlords, the Port Authority of NY/NJ and the Durst Organization, to arrange a 10-year sublease for the entire 39th floor of the 104-story tower from Condé Nast’s parent company, Advance Magazine Publishers Inc. NY Life plans to move into the property in May 2023, relocating from its 120 Broadway offices. Asking rents were reportedly in the mid-$60s per SF, in a deal brokered on behalf of the magazine publisher by JLL’s Peter Riguardi, Steven Rotter, Andrew Coe and Brett Harvey. JLL reportedly also represented NY Life, which plans to keep its headquarters at 51 Madison Ave.
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Digital training center Civic Hall has signed an 85K SF lease at RAL Development Services' Zero Irving building, Commercial Observer reported. The Fedcap Group-owned tech company, which focuses on learning and collaboration to advance technology and problem-solving for the public good, signed for 25 years on six floors of the 21-story, glass-fronted, Class-A office space just off Union Square. RAL, which partnered with Junius Real Estate Partners to build the property, has been offering cheaper offices to young companies in the space in a bid to turn the building into a tech hub, while reserving other space for larger firms. So far, tenants include software company Sigma Computing, venture capital giant Sequoia Capital, digital banking platform Laurel Road and fintech firm Melio. Fedcap was represented by Savills’ Ira Schuman, and Property Management Affiliates handled the transaction on behalf of the landlord.
TOP SALES
Black Spruce Management and Orbach Affordable Housing Solutions teamed up to buy Solow Realty & Development Co.’s 685 First Ave. for $387.5M, The Real Deal reports. The joint venture, operating as GO Partners, was courted by a JLL team led by Rob Hinckley and Jeff Julien, who represented the seller. GO Partners reportedly obtained $290.6M in acquisition financing for the 408-unit property from JPMorgan Chase. The purchase adds to Black Spruce’s growing rental portfolio, which reportedly spans more than 4,000 units in NYC and approximately 6,000 units across the U.S.
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Spanish billionaire Armancio Ortega, the founder of the Zara fast-fashion empire, has closed on his purchase of 19 Dutch St. in the Financial District, according to property records. Ortega's family firm, Ponte Gadea, paid developer Carmel Partners $487.5M for the 3-year-old building, which reached 49 stories and includes 483 units. The sale, arranged by a Cushman & Wakefield team led by Doug Harmon, was announced in July as a $500M deal.
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Chris Xu’s United Construction has sold $15M worth of condominium units from its Skyline Tower to Xinyuan Xia, property records show. The tower, which is the tallest skyscraper in of Queens, completed construction last summer, according to New York YIMBY, and The Real Deal reported earlier this year that the building was aiming for a sellout totaling more than $1B.
TOP FINANCING
Cohen Brothers Realty scored a $100M refinancing loan for its 300K SF Billionaire’s Row office property located at 135 East 57th St. as part of a larger, $534M financing package, Commercial Observer reports. The funding comes from Fortress Credit, a division of Fortress Investment Group, and combines an existing $90M in debt with a $10M gap loan. The Cohen Brothers — reportedly juggling several lawsuits, closures and at least one default — secured debt from Fortress backed by one property in Westchester County and two in Florida: for the 245-room Le Méridien Hotel Dania Beach and the Design Center of the Americas, both in Broward County, Florida.
