Sunday Summary: A Very Busy August

Last gasp of summer, you say? Everybody’s in East Hampton, or at the Jersey Shore, or in Myrtle Beach? No deals are happening before Labor Day?

Tell that to RXR. The developer just laid out almost $1.1 billion for 590 Madison Avenue, the 1 million-square-foot, 42-story office tower previously owned by the State Teachers Retirement System of Ohio in a deal that has been in the works since May.

Or tell it to Amazon, which tacked on 259,000 square feet to its pre-existing lease at WeWork’s 1440 Broadway, bringing the company’s total square footage to a head-spinning 560,000 square feet in the Times Square building.

Or run that by Stephen Ross. The industry legend nabbed $340 million in refinancing from BDT & MSD Partners for his office property One Flagler in Downtown West Palm Beach.

And, while you’re in West Palm Beach, say it to Terra and Sympatico Real Estate, which bagged a handsome $285 million construction loan from Tyko Capital for the Mr. C-branded condo and hotel development at 320 Lakeview Avenue.

Bridge33 Capital is certainly not sleeping on a beach somewhere. It secured $460 million in CMBS financing for its national retail portfolio.

And the kids attending The City University of New York will come back from summer vacation with more housing options, thanks to CUNY’s purchase of several floors of 569 Lexington Avenue from Hawkins Way Capital for $125.6 million. (OK, probably not this fall, but you get the idea.)

Maybe this all means that there’s no such thing as a summer slowdown or time away from work anymore. Nobody waits on a billion-dollar sale, or a quarter-million-square-foot lease.

We’d say this is something you should think about over the last week before Labor Day, but we have the feeling that you’re probably too busy closing a deal.

Busy if you’re a lawyer

If you are in any way involved in the real estate needs of a law firm, you’ve been busy all year.

Over the first half of 2025, the volume of U.S. law firm leases of at least 20,000 square feet hit 5.9 million square feet, according to a new report from Savills. That’s the highest volume for the first half of a year since 2018.

And we certainly see it in New York, where the very biggest office leases in the last 12 months have been ones like Mayer Brown taking 330,662 square feet at 1221 Avenue of the Americas, or Goodwin Procter taking 250,000 square feet at 200 Fifth Avenue.

Just in the last week, Massumi + Consoli took 22,915 square feet at The Durst Organization’s 1133 Avenue of the Americas, while BraunHagey & Borden leased 20,000 square feet at George Comfort & Sons’ 200 Madison Avenue.

“Law firms continue to be committed to the idea that office space and efforts to encourage their people to come into the office are important elements of the value they provide to their clients,” said Savills’ Thomas Fulcher. “This report reflects that trend, and we don’t see that slowing down.”

Busy if you’re an appraiser

Since COVID-19 struck, it has been very difficult to gauge a property’s true worth.

Take 300 and 303 West 42nd Street. Back in 2019, KRW Realty Advisors pumped about $80 million into revamping the combined properties from industrial into sleek office space. But KRW couldn’t find tenants. Nine months ago, the company bit the bullet and sold to Blake Partners, JAM Real Estate Partners and The Straus Group for $48 million.

Well, last week a subsidiary of Xin Capital put down $62 million for the property, handing Blake, JAM and Straus Group a tidy profit.

But the what’s-it-all-worth question is probably going to be with us for a while. Also last week, Seaport Entertainment Group (a spinoff of Howard Hughes Corporation) sold 250 Water Street for $150.5 million to Tavros — which is $29.5 million less than what Howard Hughes bought the site for seven years ago.

All that being said, there has been appreciation in the market, too.

In 2022 Bainbridge Companies and Rockwood Capital bought a 12-acre, 270-unit complex at 5401 Wiles Road in Coconut Creek, Fla., for $69 million. Last week, it sold to AvalonBay Communities for $98.3 million — a 42 percent jump in value!

A lot of this comes down to location, condition of the asset and property type. Note that the big appreciation happened in multifamily, and the discounts were in office. (However, 250 Water Street was intended to be mixed-use.)

According to a recent report from Cushman & Wakefield, cities have too much office and not enough “live” and “play” space. The report stated that if some of the tired office properties were converted to living space, the result would unlock billions in economic activity and property value.

“The share of real estate that should be ‘work’ should not be 70 percent,” said Rebecca Rockey, author of the report, noting cities where the share is exactly that percentage or proximate to it. “It should be closer to 42 percent. And the share that should be ‘live’ should be closer to about 30 percent, and ‘play’ should be closer to 26 percent. That could probably create somewhere between $120 billion in value on the lower end, and potentially up to $340 billion on the higher end.”

Busy if you’re in data centers, self-storage and life sciences

If you work in data centers, we imagine you’ve been busy — especially given that the vacancy rate for that asset is 2.3 percent, a record low.

We would guess the same if you’re in self-storage — at least if Etude Capital and San Felipe Financing’s $115.2 million purchase of nine self-storage properties across California and Nevada means anything. Or Stuf’s lease of 11,991 square feet in Vornado’s One Park Avenue right in prime Manhattan.

While life sciences has certainly had ups and downs in the past two years, it was a busy week for Boylston Properties, which refinanced the 160,000-square-foot, recently redeveloped 500 Forge in Watertown, Mass., to the tune of $119.15 million via Landesbank Baden-Württemberg and Tishman Speyer Properties.

Oh, and movie studios got in on the act, too. The 314,940-square-foot Raleigh Studios in Los Angeles owned by Hackman Capital Partners and Affinius Capital got a blockbuster three-year, $165 million, interest-only, fixed-rate loan with a 7 percent interest rate from Wells Fargo Bank and Barclays.

Busy if you’re in multifamily construction lending

You probably got the idea from some of the deals we’ve already highlighted, but construction lenders were busy last week — especially on the multifamily front.

In Greenville, S.C., and Houston, HMF Americana received $113.5 million to construct two build-to-rent communities, The Cottage Green Tomball and The Cottage Green Simpsonville, for a total of 575 units.

In Los Angeles, Helio Group scored $92 million in construction financing for the 190-unit Culver City multifamily project called Aston Residences.

In Brooklyn, Avdoo secured $47 million in construction financing  from Valley National Bank for the 21-condo 110 Boerum Place.

And Property Markets Group got $107.5 million in construction financing from Maxim Capital Group for the 37-unit Waldorf Astoria Residences Denver Cherry Creek.

Busy if you’re in proptech

LightTable certainly had a good week! The AI-driven development review platform (essentially, it reviews thousands of pages of architectural and engineering documents in minutes) closed its fundraising seed round to the tune of $6 million, with cash from Primary Venture Partners, Innovation Endeavors and MetaProp. (Speaking of AI firms, we heard that Tempus AI took a 39,565-square-foot lease at SL Green’s 11 Madison Avenue last week.)

Whew!

After all that, if you’d like to relax, think about all the booze you’ll be able to swill at REBNY’s Jan. 22 gala — er, actually, just make that “the REBNY Annual” which will be taking place then at the Waldorf Astoria. Hopefully, by January, we’ll get a break.

See you next week!