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“I think you’re going to see more activity in 2025,” said Bill Rudin, co-executive chairman at Rudin, who noted that his company’s 2024 included renewing and expanding Blackstone’s lease at 345 Park Avenue to 1.06 million square feet, keeping the asset management giant in the building until at least 2034. “You’re going to see more deals either get restructured, or taken back as people step in. There’s still a lot of equity on the sidelines, and, now with the rate cut, there’s definitely a sense of optimism.”
Others in the club, and on its expansive terrace, shared Rudin’s bullishness.
“Markets have turned a corner and the recovery’s setting in, and we’ve got a really exciting path ahead of us,” said Ben Brown, managing partner and head of Americas real estate at Brookfield (BN). “I think we’ll look back and view the last couple years as we skated by pretty successfully, and the future’s pretty exciting.”
As attendees caught up with friends and colleagues, one could almost hear the sighs of relief as anticipation for a post-malaise renewal reached a tangible peak.
“There’s a lot of optimism in the markets,” said Bonnie Neuman, finance co-chair at Cadwalader, Wickersham & Taft. “I think that people are ready to invest and get back into it. It’s going to be an exciting ride for 2025.”
Part of that activity isn’t by choice, either.
“There are a lot of maturities coming due that will force selling and allow transactions to happen,” said Shimon Shkury, president and founder of Ariel Property Advisors. “There’s a tremendous amount of capital on the sidelines that’s ready to invest.”
James Nelson, principal and tri-state investment sales head for Avison Young, has had reason to celebrate of late given last year’s publication of his best-selling book, The Insider’s Edge to Real Estate Investing: Game-Changing Strategies to Outperform the Market.
Nelson sees the tide turning in CRE in a major way.
“I could not be more excited for the upcoming year,” said Nelson. “It’s fantastic that this rate cut is 50 basis points, but even if it was 25, the point is that it feels like we’ve turned a corner. The biggest challenge, besides downward pressure on pricing with rising rates, was the uncertainty over the last two years. When there’s uncertainty, what happens? Nothing. Buyers and sellers move to the sidelines. So this rate cut will hopefully wake up some buyers who haven’t been actively participating in the market, and sellers will think, ‘I can bring my property to market where maybe I’ll get a bit of a tailwind.’ It should lead to a lot of transactions.”
And while the Power Gala crowd was very future-forward, there were, of course, 2024’s victories to celebrate as well.
“Our year has been really strong, because we closed $1 billion worth of construction loans for our development pipeline in New Jersey,” said Kushner Companies CEO Laurent Morali, who noted the pipeline of potential deals has tripled since the rate cut announcement. “We’re in active development of 4,000 apartments in New Jersey right now, and we completed one acquisition of a strategic asset in Washington, D.C., a residential property reflecting the current market condition — so, sort of a discounted price.”
To celebrate victories like these in a more formal fashion, Commercial Observer Editor in Chief Max Gross handed out awards on behalf of the publication for the best deals of 2024, diving right into the theme of the evening.
“Some of the things that are happening right now, that I hear from everybody in this room, are really amazing,” said Gross. “This is an opportune moment that doesn’t happen very often. Everybody here is going to be part of that story, and I am really looking forward to writing it.”
After then thanking the attendees as well as the hosts, Lever House owners Brookfield Properties and WatermanClark, Gross introduced Greg Gomer, co-founder and chief customer officer at proptech firm HqO. Gomer presented the first of the night’s four Power Awards, 2024’s Office Lease of the Year, to RXR for law firm Davis Polk & Wardwell’s 700,000-square-foot, 25-year lease extension at the owner’s 450 Lexington Avenue, which came with over $300 million in capital improvements by RXR.
“Obviously, deals like this ran into some issues the last couple of years, but this lease extension truly is a catalyst for economic activity here in New York City,” said Gomer. “Davis Polk’s decision to renew and expand its footprint truly is a beacon of optimism that all of us can get behind.”
The award was accepted by RXR’s William Elder and Andrew Ackerman, and by Andrew Sussman and Lewis Miller from CBRE, who represented Davis Polk & Wardwell.
Gross presented the next award, for Investment Deal of the Year, to Jeff Sutton of Wharton Properties as well as to Will Silverman and Gary Phillips of Eastdil Secured for a deal in two parts. First, for the sale of Wharton’s 720-724 Fifth Avenue and its adjacent annex to Prada for $835 million in December 2023, making it the largest New York City deal of 2023.
Then, that same team sold the retail portion of Sutton’s 715-717 Fifth Avenue to Gucci owner Kering for $963 million, making it a sure bet for one of the largest transactions of 2024.
Next up, Neuman awarded Financing Deal of the Year to Blackstone for its $2.35 billion BX Commercial Mortgage Trust 2024-XL-5, a commercial mortgage-backed securities deal that financed a collection of over 150 industrial properties spanning 11 states in what Neuman called “the largest single-asset, single-borrower deal of the past two years.” Blackstone’s Rebecca Levitan and Louise Andreeff accepted the award.
The final award of the night, the Urban Developer Award, was delivered to Brookfield, and accepted by Brown.
“After delivering Brookfield Place to Manhattan’s downtown, Brookfield set its sights on transforming the West Side with Manhattan West, a destination for connection,” said Gross. “While Brookfield has left its mark on New York, the firm has had a global impact, and retains a strong presence across all major real estate markets.”
Gross then introduced Mark Mindick, partner at Citrin Cooperman Advisors, to deliver a closing toast and end the night in the same positive, forward-thinking mindset that the attendees exuded all evening.
“To all of our clients and future clients, please join me in raising your glass to toast everyone here,” said Mindick, “and to celebrate the success and achievements of this past year, and what we all look forward to in 2025. And, thank you, Commercial Observer, for hosting this wonderful event. Cheers.”
