Sunday Summary: Somebody Didn’t Get the Message

Yes, we’re talking about Andrew Cuomo.

Despite getting trounced by Zohran Mamdani in New York’s Democratic primary for mayor last month by more than 12 percentage points, the former governor is not taking no for an answer. Last week Cuomo announced that he was nevertheless mounting a general election campaign as an independent.

And can he count on real estate support?

Actually, no.

Almost no one is stepping up to announce their backing of Cuomo despite the fact that there was a time when he was considered (or, rather, considered himself) the greatest builder since Moses. (Robert Moses, not the one from Mount Sinai.)

In fact, the money seems to be flowing pretty freely toward the current mayor, Eric Adams. Politico reported this week a $1.5 million haul since June 10 with some $3 million of cash on hand — a figure which puts Adams ahead of both Mamdani and Cuomo. According to Politico, $1 million of this raise came from a fundraiser hosted by one of the most recognized names in CRE: SL Green’s Marc Holliday. (Among other donors from CRE were names from Silverstein, Cushman & Wakefield and Fried Frank.)

Holliday hasn’t been shy in his opinion on who should best run the city.

“We’ve been pretty clear in what we look for in a mayor in terms of being both pro-business but also active in social causes and affordability,” Holliday said last week on an SL Green earnings call, “and we think Mayor Adams has achieved that, but the voters will have their day in November.”

Also last week the REIT revealed that its SLG Opportunistic Debt Fund — which is bankrolled by pensions, high-net-worth individuals and insurance companies — had raised $1 billion, with $500 million alone coming last week, with the intent of buying loan portfolios around New York. (Man, if there’s one thing SL Green is good at, it’s raising the green.)

However, if they’re looking for shaky loans, the fund might not have as much luck as it might have had a year ago. A lot of neighborhoods are turning around and seeing tenants returning.

One sees it in all sorts of big and little ways. The 14th Street-Union Square subway station, for instance, services 12 percent more daily subway riders now than last year, according to a new report from the Union Square Partnership. The report also counted 53 new businesses in the area, including 26 new restaurants.

Somebody’s coming to the surrounding offices. Sure, the leases are in many cases shorter, and the footprints are often smaller. But the flex deal is alive and well.

Of course, New York City politics almost offers a respite from the national political debate — which got scary nerve-wracking for CRE again this week when rumors started coming out that President Donald Trump was finally going to ax Fed Chair Jerome Powell.

According to The New York Times and Bloomberg, the president showed a draft of a letter firing Powell to House Republicans on Tuesday night, but backed off when the news became public.

But if the president were to follow through? We almost don’t want to think about it.

“A move by the executive branch to replace the chairman would seriously impair this independence, introducing the risk of political considerations influencing rate decisions,” New York University’s Sam Chandan told CO. “Such interference would likely result in interest rates that are set below levels consistent with maintaining price stability, thereby increasing the probability of higher and more persistent inflation.”

Nobody’s sitting on their hands

There were plenty of interesting sales, leases and finances last week (ESRT buying in Williamsburg, for instance; Spectrum renewing 200,000 square feet of warehouse space in Greenpoint; Vornado nailing a $450 million CMBS loan on Penn 11) but we’d like to focus on three deals.

The biggest was not of a specific property but a company — we’re talking about Starwood Property Trust’s $2.2 billion buy of the net leasing platform Fundamental Income Properties from Brookfield Asset Management, which includes a 12 million-square-foot portfolio of 467 properties across 44 states.

Second up, we were excited to learn that Amancio Ortega, the Spanish billionaire owner of Zara, is in the process of purchasing Miami’s Sabadell Financial Center at 1111 Brickell Avenue from KKR and Parkway for $275 million.

Last, Alexandria Real Estate Equities just inked the largest life sciences lease in the company’s history: 466,598 square feet at San Diego’s Campus Point to a pharmaceutical tenant (no word on which one) — and this is despite the fact that San Diego life sciences demand had been slowing down considerably. (“It would take three times the uptake of space seen per year during the peak of the last cycle to reach equilibrium,” as per JLL’s Maddie Holmes. Well, a few more deals like the Campus Point one and everybody would be fine!)

Speaking of California

California real estate has been on a bit of a roller coaster in the last few years. In addition to a life sciences boom and glut, something similar is happening to industrial and logistics.

Last week we saw that vacancy rates were ticking up in the Inland Empire, as was negative net absorption, and rents had declined for the eighth consecutive quarter, as per a report from CBRE. (Tariffs are probably not going to help.)

Of course, industrial isn’t the whole story.

While the San Francisco area — not L.A. — was always where the big tech companies wanted to be, that view needs to be amended. Proptech companies, for one, have been thriving in Los Angeles.

“I’m located in Century City, and on my floor alone there’s two or three other firms, as well as friends that I have on the top floor, and more right around the corner,” Eric Migicovsky, the founder of Propvetter, told CO. “There’s a great real estate ecosystem here that I can tap into in terms of business.”

And, for a nice West Coast read this Sunday, take a look at CO’s interview with Corinne Verdery, the CEO of Caruso who has taken over the business day to day since company founder Rick Caruso decided to run for L.A. mayor in 2022.

Speak to you next week.