Sunday Summary: That ‘70s Rerun

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The Tuesday morning shooting spree at the 36th Street subway station in Sunset Park, Brooklyn felt like a bad flashback to a previous era. Dozens shot in the subway at rush hour. An active shooter on the loose. Cops swarming the stations and … nobody with any idea where the perp had disappeared to.

The incident which finally ended with the arrest of Frank R. James ​​ should be considered the first major test for Mayor Eric Adams’ administration.

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The mayor is a former NYPD captain, and campaigned as somebody who would brook no disagreement on the issue of public safety. Months into his administration Adams had already added 1,000 police officers to patrol the subways.

However, it did nothing to prevent the tragedy.

Moreover, the fact that it took about 30 hours before James was apprehended kept New Yorkers on edge for a full day.

There could well be collateral damage from the incident. The subway system is, after all, the lifeblood of the city’s economy. Without this cheap and (sometimes) efficient form of transportation commerce would grind to a halt. Terrifying the subway-commuting part of the population is a sure way to ensure that skeptics who have long been grumbling about return-to-work initiatives have a little more currency.

“The New York City subway system relies on trust,” Mitchell Moss, professor of urban policy and planning at New York University as well as director of the Rudin Center for Transportation, told Commercial Observer in an email. “The rider trusts that the MTA will operate safe, reliable trains; but of greater importance, we trust that the people next to us, on the subway platform or on a train are not terrorists, deranged or trigger-happy killers. Clearly, the system of trust is not sufficient in the 21st century. The subway shooting in Sunset Park will not fade away but will be a part of the new safety challenges that the MTA and New York City must address. We do not need politicians offering their ‘thoughts and prayers’ but cameras and cops on every platform and train.”

All in all, it made for an anxious week.

But, to be fair, there’s anxiety everywhere. Californians are feeling it too.

According to a new poll put out by U.C.-Berkeley, California voters are putting housing affordability and homelessness at the top of their list of 15 concerns that also included issues like crime and public safety and gas prices.

And in Miami-Dade, Mayor Daniella Levine Cava went so far as to declare an “affordability crisis.”

Crime? Gas prices rising? Inflation? Wars overseas? Congressional investigations of the White House? (True, previous administrations, but you get the point.) It’s almost as if we’re reliving the 1970s.

Readers of CO can at least take some comfort in the fact that inflation probably won’t devastate real estate. “When you’re in an inflationary environment, rent can often be raised, offsetting the upward pressure rising interest rates place on capitalization rates,” Joseph Baksic, an associate managing director with the structured finance group at Moody’s Investors Service, told CO. “This is particularly true for some property types, such as multifamily and industrial, right now.”

Let’s get back to the present, shall we?

We can all take some comfort in New York’s leasing scene, which saw some good deals this week that were all in excess of 20,000 square feet.

At 195 Broadway, Lattice, the human resources firm, took 42,000 square feet; the New York State Office of General Services re-upped its 45,350-square-foot lease at 123 William Street; Phaidon, the recruiting agency, took 71,239 square feet at SL Green Realty Corp.’s 711 Third Avenue; and the Museum of Women landed a 25,000-square-foot lease at 480 Broadway in Soho.

But the big daddy of them all was Facebook taking another 300,000 square feet at Vornado Realty Trust’s 770 Broadway bringing its total presence in the building up to 813,000 square feet. (Nobody will ever accuse Mark Zuckerberg of not putting his money where his mouth is.)

And beyond leases we saw A&E Real Estate do two major deals this week: the firm is in a deal to buy a 14-building portfolio consisting of 1,217 units in Gravesend and Sheepshead Bay from LeFrak for $250 million and we learned that A&E plunked down $43 million to purchase 1080 Amsterdam Avenue from SL Green Realty Corp.

Leases and sales are not just in New York, you know!

Southern Florida continued its hot streak: Last week Blackstone put forth a proposal for a $700 million, 2.3 million-square-foot industrial complex near Miami; CenterPoint Properties is buying a last-mile “luxury” truck parking lot for $47.5 million; CS Ventures purchased two neighboring office buildings at 340 and 350 Royal Palm Way in Palm Beach from Pearlmark for $35 million and the law firm Shutts & Bowen inked a 10,950-square-foot deal for space at The Main Las Olas in Downtown Fort Lauderdale.

But two Florida deals stood out: Waterton closed on the purchase of Verona at Boynton Beach, a residential complex at 1575 SW 8th Street, from the Massachusetts-based Robbins Property Associates for $80 million made jaw-droppingly impressive by the fact that when the property last changed hands in 2018 it had only fetched $43 million, according to Palm Beach County records.

We also heard the Sydell Group, which is behind Manhattan’s NoMad Hotel, is partnering with the Related Group and Tricap to develop NoMad Residences Wynwood, a 329-unit condominium, with prices starting in the mid-$500,000s and will include Casa Tua, an Italian restaurant, and The NoMad Bar on the roof that will be helmed by Leo Robitschek, the former bar director of Eleven Madison Park.

There was also interesting Los Angeles news: MF1 Capital is making a bold $328.8 million purchase of five Downtown L.A. properties; and the Magic Castle, home of the Academy of Magical Arts, is apparently changing hands with video game mogul Randy Pitchford as its new owner.

In the nation’s capital we learned that local development legend Mark Lerner, owner of Lerner Enterprises, might be selling the Washington Nationals. We guess the new farmers market just wasn’t enough for him.

Sunday reading

We got the big reveal this week of something a very long time coming.

Specifically, we’re talking about 270 Park Avenue, the much anticipated JPMorgan Chase tower that Tishman Speyer is developing and that’s being designed by Foster + Partners. Its first official renderings were released.

In addition to an architectural marvel, the building promises to be a zero-net carbon emitter; it will be sourcing all of its power from a Canadian hydroelectric transmission line.

One thing we weren’t able to find out yet is what 270 Park is planning on doing about the question of a trading floor.

Such floors are actually a much bigger carbon emitter than one might think and because of this they’ll soon be raising prices for developers citywide thanks to Local Law 97. Will JPMorgan not have a trading floor in its new digs?

Something to think about on this Easter Sunday.

Speaking of which, to all of our readers who are observing: Have a happy Easter and a zissen Pesach!