This Week’s N.Y. Deal Sheet
Retailers were active in the leasing market this week as the asset class remains near the top of investors’ minds, while hotel transactions and stake swaps dominated sales in New York City this week.
TOP LEASES
The Messenger, a newly formed digital media company, has signed a 42K SF lease in the Financial District. The startup will take space on the 26th floor of L&L Holding Co.’s 195 Broadway, subletting space from Orchard Technologies, according to a release. The Class-A, landmarked office building is anchored by retail tenants Anthropologie and Nobu. Cushman & Wakefield brokers repped both sides of the deal, with Peter Trivelas and Gary Ceder representing Orchard and Laura Pomerantz, Ethan Silverstein and Theodora Livadiotis representing The Messenger, which has drawn scrutiny for its of ambitious growth plans and business model.
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Flagstar Bank is taking over the 313K SF office previously leased by Signature Bank at 1400 Broadway. Landlord Empire State Realty Trust agreed to grant Flagstar a discount of $3 per SF for the first five years of the deal, while Flagstar agreed to take on the entirety of the space in a lease than runs until 2039. The discount works out to a 1.5% rent reduction over the course of the lease.
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Lidl is setting up shop for the third time in Queens, Commercial Observer reports. The grocer is taking 35K SF at The Feil Organization's Glen Oaks Shopping Center, located at 255-01 Union Turnpike, for 15 years in a deal brokered by Randall Briskin on behalf of Feil and sourced for the landlord by Schuckman Realty’s Ken Schuckman. Lidl now has more than 170 stores along the East Coast, including 25 in New York state.
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Urban Edge Properties’ Bruckner Commons has signed a total of 45K SF in new leases, led by budget grocer Aldi signing for 22K SF, Commercial Observer reported. The mall, at 1948-1998 Bruckner Blvd. in the Bronx, will house Aldi’s fourth location in a deal brokered on behalf of the grocer by Ripco’s Esther Bukai. Off-price retailer Lot-Less signed for 15K SF in a deal with representation from Hudson RE’s Jason Gerbsman. Physical therapy provider JAG-ONE signed for 4K SF, beauty supplier Saloncentric took 2K SF and Buffalo Wild Wings Go is reportedly nearing an agreement for just shy of 2K SF. Urban Edge negotiated directly with Aldi and Lot-Less, while Ripco Real Estate brokers repped the mall in the deal with Saloncentric, JAG-ONE and Buffalo Wild Wings Go.
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Circle Realty Group’s 14 Penn Plaza, located at 225 West 34th St., has signed structural engineering firm Mueser Rutledge Consulting Engineers to a 40K SF renewal, Commercial Observer reported. The 15-year deal gives the firm the whole sixth floor and part of the fifth floor in the 23-story building, where its neighbors are a Regus, employment agency Abacus Group and accountancy Prager Metis. Asking rents in the deal were reportedly $60 per SF, with Circle Realty’s Jay Futersak representing both the tenant and the landlord in the deal.
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Boston Properties has signed a new deal for an existing tenant at 510 Madison Ave., Commercial Observer reported. One Equity Partners is taking 23K SF in the 30-story, Macklowe-developed office tower, where asking rents are reportedly between $100 and $150 per SF. The private equity firm will take the 18th and 19th floors in their entireties in the lease agreement, having signed a 10-year deal for 11K SF under the building’s previous ownership. Harry Macklowe designed the building with small finance firms in mind and began leasing to hedge funds before eventually leasing up the property in 2010, after which point he sold the building to Boston Properties in 2011 for $287M.
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Accounting firm LM Cohen has signed for 31K SF at 1359 Broadway, taking over from Zentalis Pharmaceuticals via a sublease agreement, Commercial Observer reported. LM Cohen signed for 10 years. Zentalis’ reasons for subleasing — having signed an 11-year deal with owner Empire State Realty Trust just two years ago — are unclear. The sublease agreement had asking rents of $64 per SF and will see the accounting firm relocate from its current location at 535 Fifth Ave., with LSL Advisors’ Daniel Lolai, Ray Balassiano, Wayne Siegel and Eric Siegel repping LM Cohen and CBRE’s David Stockel repping Zentalis.
TOP SALES
Thor Equities sold 43% of its stake in the 24-story office building at 245 Fifth Ave., The Real Deal reported. The Moinian Group, which was already an investor in the building, purchased the stake, leaving Thor with 7% of the equity in the property while Moinian owns the remaining 93%. The Moinian Group has been an owner in the property since 2007 when it partnered with Goldman Sachs to purchase the office building for $190M. The deal was underpinned by a debt-to-equity move, converting the Moinian Group’s $20M loan to Thor into equity.
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An undisclosed buyer has made a move worth somewhere between $325M and $335M for a 26-story Flatbush apartment development from Moinian Group and Bushburg Properties, The Real Deal reported. PincusCo first reported the deal for the property at 123 Linden St., citing a filing from the Tel Aviv Stock Exchange. The 467-unit residential complex, which benefits from a 421-a tax abatement that sets aside 141 units as income-restricted, was built using a $160M loan from Moinian Capital Partners. The developers also received a $170M refinancing package from an AIG subsidiary a few years ago, which was replaced by a $223M loan from Bank of China a few months later. The apartment complex will include amenities such as a fitness center, a rooftop pool and a spa.
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McSam Hotel Group has sold its Long Island City hotel, the Holiday Inn located at 37-10 10th St. in the hip Queens neighborhood. The off-market deal saw Bayrock Capital make the purchase for $76.5M, working out to roughly $671 per SF for the 381-room property spanning a total of 114K SF, The Real Deal reported. This is Bayrock’s second Queens acquisition in several months, per TRD, after buying a Corona parking lot and the adjacent Holiday Inn LaGuardia Airport for $50M from the Moinian Group in January. Bayrock was repped by KFIR Capital’s Jake Blatter in the deal for the Long Island City hotel, which is being financed by an all-cash private debt fund, while the McSam Hotel Group had in-house representation.
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Mumbai-based Reliance Industries has acquired almost the entirety of Investment Corporation of Dubai’s stake in the Mandarin Oriental Hotel at 80 Columbus Circle, Crain’s New York Business reported. The United Arab Emirates' sovereign wealth fund sold a 75% stake in the hotel, which has 244 rooms and runs from the 35th to 54th floors of the building, for $98.2M.
TOP FINANCING
Joy Construction and Maddd Equities scored a $143M financing package for their Downtown Brooklyn mixed-income development located at 202 Tillary St., The Real Deal reported. The developers cobbled together the sum from Valley National Bank, Metropolitan Commercial Bank and Bank Leumi, replacing a $30M leasehold loan from Bank Leumi USA (which Valley National acquired last year). The property, slated to bring 465 apartments to the area by its planned completion in 2025, will reserve a quarter of units as affordable housing as part of the 421-a program. But the joint venture’s difficulty in arranging new financing is emblematic of the current obstacles facing developers in search of ground up financing, Joy Construction’s Eli Weiss told TRD.
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A nonperforming note on a newly renovated Sunset Park office tower known as The Whale has sold for $70M to Capstone Equities, Commercial Observer reported. Capstone reportedly purchased the note from TPG Real Estate Finance Trust at a “discount to par” on the Nightingale Properties-owned building, located at 14 53rd St., sources told CO. Nightingale bought the building from Madison Realty Capital for roughly $84M in 2020, with plans to turn the former Whale Office Co. headquarters into a creative office space. The purchase came with $90M in debt on the property, originated by TPG in 2018. The property’s tenants include indoor soccer facility Soccerroof and tortilla producer Vista Hermosa. But the note sale has been controversial, winding up at the center of two recently filed lawsuits in Kings County Supreme Court. In one dismissed case, Nightingale alleges that Capstone interfered with a loan purchase between TPG and Nightingale.
