This Week’s N.Y. Deal Sheet
Sales remained slow in New York City this week, but the final week of Q1 saw several big leases and a flurry of substantial financing deals close.
TOP LEASES
Major League Soccer is expanding and relocating its New York City headquarters to Vornado Realty Trust's Penn 2 redevelopment. The sports league signed a 126K SF lease at the 1.6M SF, 31-story office building across from Madison Square Garden, The Real Deal reported. As the league's audience grows with the addition of superstar Lionel Messi, so will its office footprint when it moves from 64K SF at 420 Fifth Ave. when its lease ends next year. Asking rents at Penn 2 were between $110 and $125 per SF, and MLS will also have private use of a 770 SF outdoor space and shared use of a 17K SF rooftop terrace. Cushman & Wakefield deals with leasing on behalf of Vornado for Penn 2, while JLL’s Joe Messina and Dan Posy repped the MLS in the deal.
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Boston Properties has a new tenant at 601 Lexington Ave., its 1.6M SF, 59-story tower in Midtown East, Bisnow has learned. State Street Bank, a global financial services and bank holding company based in Boston, has signed a 30K SF, full-29th-floor lease. The bank is relocating from its offices at Vornado’s 1290 Sixth Ave., a few blocks west of its new digs. Asking rents in BXP’s 601 Lexington Ave., whose tenant roster includes Blackstone and Citigroup, were $96 per SF. The tenant and landlord were repped by JLL, with brokers Frank Doyle, Cynthia Wasserberger, David Kleiner and Andrew Coe representing ownership.
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SL Green signed leases totaling 64K SF at 485 Lexington Ave., according to a release. Risk management consultancy and insurance broker RSC Insurance Brokerage took 28K SF, giving it the entire 17th floor for 10 years, with representation from Avison Young’s Michael Gottlieb. William O’Neil & Co., a capital markets firm, signed a 5K SF lease for five years for part of the 30th floor, with representation from Newmark’s Brent Ozarowski and Kevin Sullivan. Engineering and scientific consulting firm Exponent signed a seven-year lease for 14K SF on the 22nd floor, with representation from Cushman & Wakefield’s Peter Trivelas. Broadcast and digital media company Tegna renewed its 14K SF across the entire 27th floor for six years, represented by CBRE’s Brad Auerbach. Finally, Graham Holdings signed for 3K SF for three years on part of the seventh floor. SL Green was represented by JLL’s Paul Glickman, Diana Biasotti, Ben Bass, Kristen Morgan and Kip Orban in all the transactions.
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Rockrose Development has signed two new tenants at 300 Park Ave. S. to a total of 28K SF, according to a release. Luxury e-commerce company 1stDibs and an unnamed mining company signed for 14K SF apiece at the 200K SF office building, which rises 14 stories and was built in 1910. Rockrose had in-house representation from Rob Fink, as well as Cushman & Wakefield’s Josh Kuriloff, Matthias Li, Drew Braver, Remy Liebersohn and Heather Thomas. JLL’s Greg Wang, Christine Colley and Thomas Swartz repped 1stDibs.
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The Callen-Lorde Community Health Center in the Bronx is staying put and expanding at Boom Community Services’ 3144 Third Ave., according to a release. The community health center will now occupy 13K SF across the entire ground and second floors at the 35K SF building, more than quadrupling its 3K SF. The five-story Melrose office property underwent a capital improvement program that included new windows and renovated office spaces. Carri Lyon and Jenna Catalon of Cushman & Wakefield repped the health center, while C&W’s David Lebenstein repped the landlord.
TOP FINANCING DEALS
MF1 Capital has agreed to provide a bridge loan of $216M to Gotham Organization and the Carlyle Group for their acquisition of The Aire, a luxury apartment building at 200 W. 67th St., Commercial Observer reported. The joint venture bought the 43-story, 210-unit building for $265M in an all-cash deal in January. The skyscraper changed hands after its previous owner, A&R Kalimian Realty, defaulted on its $194M mortgage in November. Tom Traynor, Tom Rugg, Lawrence Britvan and Adam Spengler of CBRE arranged the new financing on behalf of Gotham and Carlyle.
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The Brodsky Organization and Greenland USA landed a $415M loan from M&T Bank to refinance a residential tower at the Pacific Park megaproject, The Real Deal reported. The sum covers the 51-story Brooklyn Crossing project at 18 Sixth Ave. in Prospect Heights, which has retail space partially leased to gym chain Life Time Fitness. The 10-year, fixed-rate loan for the multifamily portion of the residential part of the recently completed building is backed by Freddie Mac. The Brodsky Organization entered a joint venture with Greenland Forest City Partners in 2019 on Pacific Park, but the massive project, originally named Atlantic Yards, part of the development deal that included the Barclays Center, is unfinished. It has 858 rental units, some 258 of which are reserved as affordable housing. The project is expected to deliver a total of 6,340 housing units, including 2,250 affordable units across 15 buildings.
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Criterion Real Estate Capital and Charney Cos. have landed $55M in financing to acquire and restore a historic dormitory building near Columbia University, the New York Business Journal reported. Madison Realty Capital provided the bridge loan for the historic McGiffert Hall, an 80K SF building that the venture plans to convert to luxury student housing. The joint venture acquired the 92-year-old property for $38M from Riverside Church, the NYBJ reported.
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Hudson Cos. nabbed a $135M construction loan for a Brooklyn multifamily project, Crain’s New York Business reported. The developer is working on a nine-story, 328-unit property in Brooklyn’s Crown Heights neighborhood that benefits from the now-expired 421-a tax abatement. Hudson Cos. acquired the site in 2021 for $41.5M. Santander Bank provided an $85M construction loan to the developer, and Related Fund Management chipped in another $50M. Construction started in August 2022 and is expected to complete by fall 2025. Around 30% of the apartments will be reserved for households earning 130% of the area median income, with the remainder operating as free-market apartments.
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SL Green refinanced its loan, lowering its debt in the process, at its Midtown office tower at 10 E. 53rd St., The Real Deal reported. The new $205M loan comes from Wells Fargo and replaces a $220M, five-year, interest-only debt on the 37-story, 385K SF building, also from Wells Fargo. The lender also provided a $180M loan on the building in 2017. SL Green acquired the 1972-built property in 2012 for $252.5M and later sold a 45% stake to the Canada Pension Plan Investment Board. The building’s tenant roster includes real estate brokerage Compass and upscale fitness chain Equinox.
TOP SALES
Sam Chang’s McSam Hotel Group has sold another hotel, this time a 142-key property it developed in Long Island City, PincusCo reported. The building at 38-04 11th St. sold for $40M to a shell company linked to hotel operator Letap Group principal Jasmin Patel, Commercial Observer reported. McSam Hotel Group completed the hotel's construction in 2022, five years after it acquired the site for $7.8M and four years after Madison Realty Capital supplied a $16.5M construction and acquisition loan for the development. Chang said before the pandemic that he was planning to slowly exit the hotel business, and he has completed a series of asset sales since — although last year, he also launched the development of a new hotel at 223 W. 46th St., near Times Square.
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A development joint venture led by Gotham Organization has acquired an East New York site in a deed transfer valued at $13.9M, PincusCo reported. Gotham Organization will act as the beneficial owner in a joint venture with Monadnock Development and the Christian Cultural Center following the acquisition of the site at 12096 Flatlands Ave. in Brooklyn. The deal closed on March 27 and was recorded on April 1. The site is part of a parcel with a planned development featuring a 386-unit affordable apartment building.
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GDS Development Management and Sabal Investment Holdings are now the owners of a controlling stake at 146 W. 57th St., a mixed-use condominium building in Midtown Manhattan, Commercial Observer reported. The joint venture purchased the stake in the property for $82.6M. The transaction has reportedly been in progress since November when GDS and Sabal teamed up with lender Aareal Group to acquire the distressed debt on the 77-story property. The building’s 240 residential condos aren't part of the deal, but the tower also contains an 18-story, 238K SF office condo. The deal was arranged by Adam Spies, Adam Doneger, Christopher Kramer and Evan Layne of Newmark.
