This Week’s N.Y. Deal Sheet
There was no New Year's hangover for New York City's commercial real estate market, which saw several notable sales, loans and leases close in the first full week of 2024.
TOP LEASES
Food delivery app DoorDash has signed for 115K SF at BXP and J.P. Morgan Global Alternatives’ 200 Fifth Ave., according to a release. The lease is an expansion and direct lease for DoorDash, which previously had a 58K SF sublease at the property. DoorDash moved into the 860K SF building’s eighth floor last March and plans to expand into the ninth floor by the end of this year. BXP has a stake of around 27% in the joint venture that owns the 115-year-old building. Institutional investors advised by J.P. Morgan own the remaining interest. The property’s tenants include Eataly, which is on the first floor and also has rooftop amenities. Bruce Mosler, Ethan Silverstein, Anthony LoPresti and Bianca Di Mauro of Cushman & Wakefield repped ownership in the deal. Adam Ardise and Greg Pickett, also of Cushman & Wakefield, repped DoorDash.
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The Icahn School of Medicine at Mount Sinai has signed for 10K SF at Elevate Research Properties’ 619 W. 54th St., known as The Hudson Research Center, according to a release. The space will serve as the Icahn School’s Human Immune Monitoring Center, a hub focused on characterizing individual patients’ immune systems to personalize their care. Elevate, Taconic Partners’ life sciences subsidiary, along with Silverstein Properties, invested more than $56M to turn the former 1930s’ Warner Brothers film editing house into lab space. Icahn Mount Sinai is already a tenant at The Hudson Research Center, which is now 90% leased even as Elevate finishes building out the final floor of the building. Developers expect that the pre-built labs will be complete in October.
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BXP’s 599 Lexington Ave. has signed investment bank TD Cowen to a one-year extension on its 126K SF space in the office tower, Commercial Observer reported. The short-term renewal will tide the bank over for the year before it moves to a new headquarters at an unreported location closer to its parent company, TD Securities, which has Midtown offices at One Vanderbilt and 125 Park Ave. In the meantime, TD Cowen will stay on the six floors at 599 Lexington that it has occupied since at least 2007. CBRE’s Peter Turchin, Arkady Smolyansky, Evan Fiddle and Caroline Merck repped BXP in the deal.
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Flagstar Bank has signed for 59K SF of office space on 320 Park Ave.’s second and third floors, as well as a little over 4K SF of retail space, Commercial Observer reported. Asking rents for the retail space, previously occupied by First Republic Bank, weren't disclosed, but prices for the office space reportedly ranged from $100 to $125 per SF. The 776K SF building, known as the Mutual of America Building, is owned by Mutual of America Financial Group and Munich Re and was built in the 1960s. The tower scored major tenants even in some of the office sector’s more difficult days following the start of the pandemic, signing big leases in 2020 and 2022, per previous reporting from the New York Post. Colliers’ Michael Cohen, Howard Kaplowitz and Andrew Roos repped Flagstar in the transaction, while ownership was represented by JLL’s Frank Doyle, David Kleiner and Carlee Palmer.
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Spotify has gotten another taker for sublease space at 4 World Trade Center, with payroll management platform Rippling taking 69K SF of its footprint, Commercial Observer reported. The sublease agreement follows the audio streaming platform’s 86K SF sublease of two floors in the building to language learning app Duolingo in late December, with rent in that deal coming in at roughly $62 per SF. Asking rents for the Rippling deal were not disclosed, but the payroll company plans to leave its current NYC digs at 470 Park Ave. South’s sixth floor for the Financial District office tower. Spotify had representation from Colliers' Sheena Gohil, Brian Given, Eric Ferriello and Jack Senske. Building ownership, Silverstein Properties, and the Port Authority of New York and New Jersey were represented by Kyle Riker and Justin Haber of JLL.
TOP SALES
Kushner Cos. sold six East Village properties totaling 112 units for $57.5M, Crain’s New York Business first reported. The portfolio spans 118, 120, 199, 201 and 203 E. 4th St. and 315 E. 10th St. Most of the buildings are fairly small, but 120 E. 4th St. contains 48 units, according to The Real Deal, which calculates that the sale price works out at roughly $513K per unit. An LLC affiliated with Targo Capital Partners was the buyer for all six buildings.
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Swiss luxury fashion house Akris paid SL Green and Walter & Samuels $40M for three commercial condos at 772 Madison Ave. and 21 E. 66th St., The Real Deal reported. The Madison Ave. space is currently occupied by Oscar de la Renta, but the Dominican designer's company reportedly plans to relocate once its lease expires in the near future. Akris plans to use the Madison Ave. address for its own store as soon as the space becomes available.
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Fortress Investment Group and Aview Equities were paid $41.5M by a newly formed development company, Bungalow Projects, for development parcels in Brooklyn, PincusCo reported. The deals happened in two separate transactions, with Bungalow paying $26.6M for 201 and 225 Moore St., both in East Williamsburg and zoned for mixed-use development. The second, $14.8M transaction was for 232 Seigel St., also in East Williamsburg but zoned for a hotel.
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Luxury retailer Prada shelled out $822.4M for two properties in a deal that closed on Jan. 5, Crain’s New York Business reported. Prada acquired 720 5th Ave., which spans 15 stories, from Wharton Properties for $397.4M, as well as the 12-story 724 5th Ave. for $425M. The retailer has had 22K SF of retail and office space at 724 Fifth Ave. since 1997, paying $19M in annual rent. Both towers have 0% vacancy, according to CoStar, with retailers like Abercrombie & Fitch and fitness group Gym on Fifth among their tenants. Abercrombie & Fitch is due to vacate and move to a new flagship at 668 5th Ave., WWD reported.
The sales price works out to roughly $3,896 per SF for the deals spanning the two properties.
TOP FINANCING DEALS
Kassin Sabbagh Realty’s investment arm, KSR Capital, has agreed to buy a 49% interest in L.H. Charney Associates’ 1410 Broadway for $170M as part of a recapitalization deal, according to a release. The 395K SF, Class-A office spans 34 stories and has recently been upgraded to improve its lobby, common areas, elevators and restrooms. The property is now more than 90% leased following 16K SF worth of deals signed in Q4 2023. KSR’s Albert Sultan and Marc Sitt repped the firm in the deal.
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MAG Partners and Safanad scored $151.4M from Bank OZK and MetLife Investment Management for the partners' seven-story, 188-unit residential development at 335 8th Ave., according to a release. Bank OZK provided a $73M loan, with the remainder coming from an equity raise led by MetLife. MAG Partners is planning to develop a mixed-use development on the Chelsea site after being selected by the property's existing residents via a request for proposals. The eventual building will largely be made up of studios and one-bedroom units and will have 30% of the units set aside as affordable housing under 421-a. It will also feature 30K SF of amenities, including a coworking lounge and a private garden, plus a 25K SF retail space leased to budget supermarket Lidl. The financing was arranged by a JLL debt advisory team led by Geoff Goldstein, Jillian Mariutti and Stephen Van Leer, plus an equity team led by Rob Hinckley, Jeffrey Julien and Nicco Lupo.
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Slate Property Group’s debt financing arm, SCALE Lending, has agreed to give Ranger Properties and KD Sagamore a $46M bridge loan for Arris Grand, a multifamily building in Brooklyn’s Clinton Hill neighborhood. The 113-unit building was completed in late November and has 7K SF of street-level retail and 10K SF of amenities, according to a release. The loan will help the developers pay off the existing construction loan on the property, with the remainder going toward leasing efforts.
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Regional hotel management and development consulting services firm Synergy Hospitality Management has scored a $64.5M loan to convert the LaGuardia Plaza Hotel, according to a release. Synergy plans to convert the 353-room property, located at 10404 Ditmars Blvd. in Queens, into a DoubleTree by Hilton. Investment management firm Sabal Investment Holdings and global real estate companies Bsafal and Argo Real Estate provided the funding.
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CW Realty nabbed $56M to replace a construction loan on its 98-unit 1499 Bedford Ave. development, Commercial Observer reported. HIG Capital’s loan retired a $44M sum from Cross River Bank and Bankwell that CW obtained in 2022. CW first bought the property in 2020, spending roughly $20M, and began construction last year. The transaction was arranged by Skyline Capital’s Shloime Goldstein.
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Madison Realty Capital notched a $180M construction loan from Elliott Investment Management for a planned multifamily project in Greenpoint, The Real Deal reported. The site was previously a superfund site that housed a plastics factory, but Madison Realty Capital has plans to turn 65 and 75 Dupont St. into 400K SF of housing. Madison was previously the senior lender but took over the project from DuPont Street Developers in 2021 after DuPont filed for bankruptcy. Plans include 279 apartments at 65 Dupont St. and 94 apartments at 75 Dupont St., and Madison has to complete the projects by June 2026 to qualify for the 421-a tax break currently awarded to the building.
