Sunday Summary: Whew — That Was a Pretty Crazy Week!


We thought we felt well rested after a couple of days off for Thanksgiving. … But noooo.

Obit writers nationwide were working fast and furious all week starting with the death of investment legend Charlie Munger. This was followed a day later by the death of Henry Kissinger. And, finally on Friday came the death of Sandra Day O’Connor, the first woman on the Supreme Court. And that’s just the obits. We’re not even mentioning news like the expiration of the truce in Gaza, or the expulsion of George Santos, ersatz Baruch College volleyball standout, from the House of Representatives.

SEE ALSO: Sunday Summary: Shuffle Up and Deal

We heard about Munger at Commercial Observer’s opportunistic investment forum at 22 Vanderbilt last Tuesday. At this forum some of the best brains in the business opined about where and how to deploy capital in the coming months, as the dry powder that has been sitting on the sidelines is starting to make everybody’s fingers itchy.

Indeed, while there’s reason to believe that the bottom has not yet been reached, there are some deals that are already taking form.

“I actually think the reason why deals are happening where people don’t see them is because there are off-market opportunities,” said Shlomo Chopp of Terra Strategies. “If you’re a borrower with a lender, you can transact off-market without the lender coming to market.” (Chopp has more to say here.)

In a conversation with JLL (JLL)’s Bob Knakal, Scott Rechler said that, as prices have declined, his RXR has quietly been taking equity positions in a number of buildings around the city. And he was philosophical about the hand-wringing over values and interest rates.

“Everyone who had been borrowing and buying over the last 15 to 20 years now needs to reset the value of their real estate, reset their capital structure, and that’s a painful process,” Rechler said over cocktails as the program’s closing keynote.

Rechler’s not alone in terms of well-capitalized firms taking a stake in projects or companies. Invesco Real Estate (IVZ) announced that it was acquiring a stake in the industrial firm Faropoint’s platform. (Just how much of a stake was not revealed but it’s a minority interest.) And Global Holdings is joining MAG Partners and Safanad in capitalizing their new 194-unit, mixed-use luxury development at 300 East 50th Street in Turtle Bay. And Norges Bank Investment Management purchased a 45 percent interest in two of Boston Properties (BXP)’ life sciences developments in Kendall Square in Cambridge, Mass., which valued the properties at about $1.66 billion.

We understand why those life sciences properties were attractive. It’s an industry that still requires physical space and the tenants are usually decently capitalized. Yes, a scientifically inclined tenant is a godsend. For instance, last week Weill Cornell signed one of the biggest New York leases of 2023 when it scooped up 200,000 square feet at the Breuer Building at 945 Madison Avenue, once home to Sotheby’s. (We would be remiss if we didn’t say there were other good leases, too: SoundCloud subleased 23,000 square feet at 2 Gansevoort Street; Hawthorne Country Day School took 35,000 square feet at the Woolworth Building; and Current, the mobile banking app, took 71,692 square feet at 620 Avenue of the Americas.)

Trouble in the city?

Mayor Eric Adams did not have a great week. He had to distance himself from his (now former) top fundraiser Brianna Suggs weeks after the FBI raided her home; just before Thanksgiving the mayor was accused of sexually assaulting an unnamed complainant back in 1993; and this all comes after the mayor’s phone was seized and questions were raised about his top donor. It’s gotten so bad that apparently even Andrew Cuomo is toying with running against him.

We can’t speak to Mayor Adams’s next election (and he has not been accused of any wrongdoing and denies the assault allegation), but if he were somehow forced to resign real estate should think about a post-Adams New York. For one thing, the guy who would step into the role of acting mayor is not someone we would call a friend of real estate: Jumaane Williams.

But we might be getting a little ahead of ourselves. Life in the city rolled on — that is, it rolled on for now. It might be way more expensive to roll on come next year thanks to the Traffic Mobility Review Board.

On Nov. 30, the group submitted to the MTA its recommendation on price congestion in which most drivers entering Manhattan below 60th Street would get charged $15 and trucks would be hit with $24 to $36 in charges depending on their size.

And the mayor announced a crackdown on illegal cannabis shops by targeting landlords. Owners could face fines anywhere from $1,000 to $5,000 for every day an illegal head shop is in operation on their property.

One final piece of cruddy news for real estate folks: It looks like New York Gov. Kathy Hochul backed down on mandatory housing targets in negotiations with state lawmakers. This was something that was going to add 800,000 units of housing over the next decade.

“Change is hard and it takes a long time for large legislative changes in the state to get through the process,” RuthAnne Visnauskas — head of New York State Homes and Community Renewal (HCR) — told CO in a Sit-Down last week. “The governor understands it’s a marathon and not a sprint.”

Try to relax

Wise words, Ms. Visnauskas.

Truthfully we should try to relax at, like, a spa. Or a clinic. Or something. And, if not us, then our pets should be at least allowed to unwind.

And this is actually more possible than ever before because pet clinics are on the rise. A perfect thing to read while you forget about New York woes on this December Sunday.

See you next week.