Sunday Summary: Why Is Gary Barnett Smiling?

If Gary Barnett has broken a sweat working on all the deals that he’s inked in 2025, a little spritz of Chanel is all he needs.

Which is our cheeky way of saying that the real estate developer who heads Extell is currently negotiating a roughly $450 million deal with Chanel for the 65,000-square-foot retail condo he’s constructing at Madison Avenue and East 60th Street.

You read that right. $450 million. This would be around $7,000 per square foot. (And that’s just the bottom part of the building!) It’s the kind of thing that can restore anyone’s faith in the grandeur of New York City’s real estate market.

Yeah, yeah, there are still discounts on the market. And, yes, some asset classes have had to bob and weave in the current environment, as per Commercial Observer’s health care construction conference last week. But the mood is largely good. (See CO’s other conference last week on the Future of New York.)

You see it in the leasing, where several New York leases cracked the 100,000-square-foot mark last week.

First, Horizon Media renewed a mind-boggling 360,000 square feet over six floors at Hudson Square Properties’ 75 Varick Street.

Santander Bank also made the decision to renew its 197,667-square-foot U.S. headquarters at Sage’s 437 Madison Avenue in Midtown.

Uber’s latest expansion at Silverstein Properties’ 3 World Trade Center might have only been 44,110 square feet, but it brought the ride-sharing company’s footprint at the building up to a dizzying 351,000 square feet.

And, over in Downtown Brooklyn, Brooklyn Prospect Charter School announced that they were opening a new high school at Tishman Speyer’s 422 Fulton Street (aka, the Wheeler) encompassing a hefty 150,000 square feet.

Brooklyn Prospect Charter School was not the only good news traveling around the borough. The City Planning Commission also approved a plan to rezone a 22-block corridor along Atlantic Avenue that could allow for the construction of as many as 4,600 multifamily units, including 1,440 income-restricted ones.

Yes, despite the nervousness around Washington (which we’ll get to in a minute), affordable homes are still in demand, and developers are still prepping for them.

The Los Angeles-based SDS Capital Group just launched SDS Impact Debt, a debt capital platform with plans to issue $1 billion worth of bonds over the next 18 months geared at financing affordable housing.

And, while we’re on the topic of L.A., the city’s real estate wheelers and dealers might also be happy with the news that Measure ULA, the city’s 2-year-old “mansion tax,” might at least be temporarily suspended as the city deals with the aftermath of the Palisades fires.

Washington’s week

Well, nobody could claim that the Washington, D.C., real estate scene is boring.

We’re not talking about Therme DC, Mayor Muriel Bowser and Therme Group’s plan to build a $500 million “urban oasis” wellness center and resort at Poplar Point along the Anacostia River, although the renderings look pretty cool.

No — we’re talking about the city’s political warfare, which has been openly spilling into real estate.

First, the manic economic indicators led the Federal Reserve Board to once again pause either raising or lowering interest rates at its latest meeting.

“If the economy remains strong and inflation does not move sustainably toward 2 percent, we can maintain policy restraint for longer,” said Fed Chair Jerome Powell. “If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

Second, there’s been a lot of tumult at Fannie Mae and Freddie Mac. Aside from the long-standing push to privatize the two government-sponsored enterprises (GSEs), Bill Pulte, the new head of the Federal Housing Finance Agency, which oversees the entities, fired 14 of 25 board members from both GSEs last week and installed himself as chairman.

But the thing that has truly rattled the D.C. real estate class has been Elon Musk’s Department of Government Efficiency, which has essentially burned the rulebook about how the government and the General Services Administration administers and retains its 350 million-plus-square-foot portfolio.

“A lot of landlords just want to understand what the process is, what the impact of any reorganization within the GSA will have on the workflow,” said Marcy Owens Test of CBRE. “There’s a lot of companies that work with the GSA on a regular basis. I don’t know that I would say there’s worry [from the industry], it’s just wanting to understand … If there are any new processes, what are they? That’s what the predominance of our clients are focused on: ‘We’ll respond to the ways that GSA feels like they need to do their work, we just want to understand what’s the best way to do that.’ ”

Just last week, the U.S. Agency for Global Media, which operates Voice of America and Radio Free Europe, announced it was canceling its 350,000-square-foot lease at the EastBanc-owned 1875 Pennsylvania Avenue NW.

Finally, there’s the question of the Trump administration’s proposed golden visa — which is essentially a green card for investment, sort of in the mode of EB-5 — but just much more expensive at $5 million.

“The primary concern for folks on the real estate side is that it’s all really unclear,” said Sam Chandan of New York University’s Chao-Hon Chen Institute for Global Real Estate Finance. “There is no data to help us quantify how much capital this will raise. But, if it comes at the cost of the EB-5 program, which for some projects has been a meaningful source of capital, that’s problematic.”

Actually, let’s get back to New York

Specifically, let’s talk about one of New York’s residential superbrokers, Ryan Serhant.

For our condo issue last week, CO hung around with Serhant and talked about his career, reality TV, starting and running a business, and the commercial and residential real estate landscape.

And, while we’re on the subject, you should check out our stories about how half of the Waldorf Astoria is being sold as condos, and all the spanking new pet amenities on offer at some of the city’s luxury buildings.

While pet spas and dog bath stations might sound cute, it actually makes a difference in selling and renting units. According to Clinton Management’s Sammy Ahmed, pet amenities are a “major driver in leasing decisions” at 3Eleven, which he is leasing.

“Prospective residents recognize the level of care and consideration we put into their pets’ well-being, making these amenities a key factor in closing deals,” Ahmed said. “One of our recent move-ins even joked that their dog had already ‘settled in’ before they did, thanks to the luxurious amenities.”

That should give you something to chew on.

See you next week!