Just when we thought we were out, they pull us back in.
We’re talking about the New York mayoral race, of course. Just when it seemed that Eric Adams had a commanding enough lead at the end of in-person voting in the Democratic primary on June 22, out came the ranked-choice voting results this past week. Those results showed Kathryn Garcia and Maya Wiley gaining on Adams quite a bit, and leaving the whole thing up in the air.
But — it turned out that that old stalwart of the public trust, the New York City Board of Elections, mistakenly included 135,000 fake test ballots in that calculation. Oy.
A redo still found a tight race between Adams and Garcia, with tens of thousands of absentee ballots left to count. Whoever wins is likely a win for commercial real estate, though. Both contenders are relatively friendly to new development. (By the way, CRE’s preferred candidate, Ray McGuire, dropped out of the race and was eliminated in the ranked-choice voting.)
Speaking of having bad weeks …
Trump Organization CFO Allen Weisselberg was indicted in Manhattan last week on 15 criminal counts surrounding alleged tax evasion. Weisselberg pleaded not guilty. The Trump Organization itself faces 10 criminal counts, and lawyers for the company pleaded not guilty as well.
Weisselberg faces many years in prison. Or, he might flip on his employer and strike a deal with prosecutors. Or, beat the rap entirely.
Now, for something different
And big. Major deals this past week underscored the strength of the commercial real estate market and industry coming out of COVID. Where to start?
Well, out in L.A. County, maybe. Aerospace firm Relativity Space signed for 1 million square feet at the Goodman Commerce Center in Long Beach. It’s one of several big-time leases in Los Angeles and its environs lately.
Meanwhile, in South Florida, the dining scene at the massive Miami Worldcenter took shape with the 27-acre development inking its first restaurant deals.
There was also a mighty building sale in the South. CP Group and Rialto Capital Management have teamed up to buy the 1.2 million-square-foot One CNN Center tower in Downtown Atlanta (the buyers are best known, though, for prowling the Miami market, so this deal is newsy just for that).
And, up in New York City, Bolivar Development’s 400 West 219th Street landed one of the largest, single leases in Gotham in months: 124,000 square feet for 30 years for the Zeta Charter School.
Probably the biggest deal of the week, though, wasn’t a sale or a lease — it was the closing on a major refinancing. Wells Fargo and Goldman Sachs apparently beat out a lot of comers to provide $3 billion in refinancing for SL Green Realty Corp.’s titanic One Vanderbilt tower in Manhattan.
Also, it’s not $3 billion, but it’s something (and it gives us a chance to throw some love to Philly): Natixis and Lionheart Strategic Management, the latter an affiliate of Fisher Brothers, provided $178 million to refinance a multifamily portfolio owned by Post Brothers.
There are still a lot of headwinds in the market, and this past week, they blew clean at us. For one thing, we learned that Manhattan has an office availability rate north of 18 percent. That is a lot of unfilled holes — all the more stark given the recovery underway.
L.A.’s not out of the woods, either, despite those aforementioned big leases. Office leasing activity in L.A. County was down 21 percent annually in the second quarter. Miami’s office market isn’t faring that well either.
What’s more, big banks, such as UBS and Capital One, committed this past week to hybrid work models, meaning they’ll likely need less space going forward. (Interestingly, last week, Apple had to fend off some employees’ complaints about not going hybrid enough.)
We’ll end on a positive note.
One of the brightest bright spots in the dark times of COVID has been the ingenuity on display in beating back the virus, including the development of therapeutics and, especially, vaccines. And, one of the side effects, so to speak, of that ingenuity has been a voracious need for space to develop such products and technology.
That’s where the life sciences industry comes in. It’s grown and grown during the past year and a half, particularly in the D.C. area and in New York City. Along the way, it’s attracted more money than ever before, with many investors learning on the go, so as not to miss the boom.
Would you expect anything less in an industry led by the likes of Taconic Partners co-President Colleen Wenke? Of course you wouldn’t.
Thanks for reading, and Happy Fourth of July!