Sunday Summary: It’s a New Year. Now Come the Resolutions.

Well, we made it!

Wednesday was New Year’s Day, and, after the champagne and the potato chips, it was time to get serious and think about our resolutions for 2025.

One could look at the number on the scale and — after a good 20-minute cry — be proactive. Renew that gym membership. Throw away all the chocolate that has somehow only been accumulating in the candy drawer since Halloween. Actually open the Skinnytaste Cookbook that you got for Christmas. (And get rid of the candy drawer!)

Or, one could do the far more fun work of resolving to do better real estate deals in 2025.

“The industry is poised to be in a better place compared to the last few years,” said Manulife Investment Management’s ​​Victor Calanog, in a looking-ahead-to-2025 column that J.P. Morgan Chase’s Al Brooks penned exclusively for Commercial Observer. “It appears that the landing will be relatively soft, which should sustain positive momentum for economic activity, benefiting key drivers such as leasing, rents and occupancies.”

While the year is young, the real estate industry seems to have already made strides in this respect. There’s been some last-minute 2024/first days of 2025 deals that we learned about last week.

So here’s the real estate maven’s resolution list.

Resolution No. 1: Spend less time in the office… Not!

To heck with spending more time with our children. (There’s really only so much “Paw Patrol” a person can take… we’ll wait for the Bluey movie, thank you.)

As we’ve seen already, a lot of companies have finally ditched WFH policies and demanded that everyone come back into the office. To wit, that means more office demand. And Citadel started the year with a doozy — 504,000 square feet at 660 Fifth Avenue!

This Fifth Avenue space is going to be Citadel’s offices as they wait out construction on the megaproject they’re building with Rudin and Vornado Realty Trust (VNO) at 350 Park Avenue, where they’ll occupy some 850,000 square feet. (They’re not expected to finish until 2032.)

Likewise, Los Angelenos are slowly resolving themselves to coming into the office more. According to a new report from Savills, some 13.7 million square feet worth of office deals closed in L.A. in 2024, with more than 3.8 million square feet inked in the fourth quarter, which is the most office leasing L.A. has seen in any single quarter since 2020.

Resolution No. 2: Visit the Florida relatives more often

Grandma and grandpa might have been onto something when they bought that condo in Florida 20 years ago.

“Telluride and South Florida used to be second-home markets,” said Merrimac Venture’s Dev Motwani in an interview with CO. “What happened during COVID was that people realized both South Florida and Telluride can be primary markets.”

You can’t get a better example of this than the fact that the priciest land deal in South Florida history — Oak Row Equities’ bid for 4.25 acres of beachfront property at 1001 and 1111 Brickell Bay Drive from Aimco for more than half a billion dollars — went into contract last week. (That’s just for dirt!)

Also, Southeast Commercial, an affiliate of The Church of Jesus Christ of Latter-day Saints, just plunked down $102.4 million for the 284-unit Elan Polo Gardens apartments just east of Wellington, Fla., from an affiliate of Greystar.

And retail, too, is a hot commodity in Florida, with the New Jersey-based Garden Commercial Properties spending $37 million for a 95,000-square-foot Publix-anchored retail property called Plaza Del Mar in Manalapan (which is about 11 miles south of Downtown West Palm Beach).

Resolution No. 3: Treat yourself to something new

Prices have come down on real estate. A lot. To support this broad generalization we will point to two deals that CO reported on in the last week.

First up, In-Rel, an investment company based in Lake Worth Beach, Fla., just dropped $25.7 million for Ballston Gateway (the 145,672-square-foot, eight-story office property at 3865 Wilson Boulevard in Arlington, Va.) to an affiliate of American Realty Advisors. That’s 40 percent less the property’s assessment at the beginning of last year ($42.1 million) and almost a third less than what American Realty Advisors paid for it in 2003 ($35.2 million).

Second, (also in Washington, D.C.) BXP is spending $34 million on the 12-story, 302,000-square-foot office building at 725 12th Street NW. Previously, Hines acquired the same property for $61 million… in 1993! (Even as recently as 2015 the property was refinanced for $135 million.)

Perhaps these examples are more about D.C.-area real estate than a larger trend. And, yes, there have been some modest gains on property that traded recently — even in and around D.C. For example, Rockwood Capital sold the 396-key Tysons Corner Marriott at 8028 Leesburg Pike to an affiliate of Prospect Ridge for $63.9 million, which is almost $4 million more than they paid for it back in 2018. But the hotel underwent about $25 million worth of renovations in 2022. So there’s that.

Either way, it should make prospective buyers aware that there are deals to be had.

Resolution No. 4: Pay your debts

One shouldn’t really have to say this one, but it’s been happening more frequently.

RFR Holding faced foreclosures (or possible foreclosures) on three separate properties during the last month of 2024, the most recent being the 25-story office tower at 285 Madison Avenue.

And that’s just December. RFR also over the few months prior faced delinquencies and possible foreclosures at 475 Fifth Avenue, 90 Fifth Avenue, One Jackson Square and 219 East 67th Street — and at the crown jewel of any portfolio, i.e., the Chrysler Building.

Resolution No. 5: Give to nonprofits

We could be cheeky here and say give them space — but we sort of don’t need to. They’re actually grabbing space already.

In January 2024, the Paul Taylor Dance Company took 31,000 square feet at 307 West 38th Street.

Selfhelp Community Services, a nonprofit for the elderly, grabbed 45,689 square feet at 1180 Avenue of the Americas in February.

In June, charter school Imagine Me Leadership took a 30-year, 63,000-square-foot lease for the whole building at 39 Truxton Street in Brooklyn.

And that’s just a handful of examples.

Why is this happening? Some of it has to do with lower rent and higher availability across the board, but another unexplored part has to do with taxes. A 30-year lease for a nonprofit on a property that’s structured as a leasehold condominium is eligible for a tax exemption via the state Department of Finance.

“We represent every major player in the office space, including Silverstein, Related, SL Green and Brookfield, and all of them are looking for not-for-profit tenants because of all the changes going on in the business world, where people are not coming back to the office in the numbers that can fill a major commercial building,” said Suri Kasirer of the eponymous New York City lobbying firm. “So they are more and more looking to not-for-profits.”

Do well by doing good?

There’s a New Year’s resolution we can all get behind.

See you next week!