Sunday Summary: A Debt of Gratitude

We told you a little over a week ago that the commercial real estate capital markets have had a relatively busy year. Financing deals from this past week underscore the point (as do the various takes from our recent National Finance Forum). 

First up, the Chetrit Organization restructured its commercial mortgage-backed securities loan tied to two Upper East Side residential towers. The debt package there totaled $714 million. Then, in probably the week’s biggest commercial real estate news (finance or otherwise), we found out that Gary Barnett — he of various megaprojects throughout Gotham — had bought the mezzanine debt on One Worldwide Plaza on Eighth Avenue. The mezz debt could end up giving Barnett control of the office tower after a looming foreclosure. Stay tuned.

Some of the financing-related news this week wasn’t of the wheeling-and-dealing variety. Rather, it was about distress — like the $515 million loan secured for Brookfield Asset Management’s ownership of a portion of The New York Times Building in Midtown falling into special servicing. Stay tuned on that one, too. 

Speaking of the Brookfield umbrella, the conglomerate was part of another bonkers big debt event this week: a $1.1 billion recapitalization of its U.S. logistics portfolio. The refinancing included a $752 million CMBS loan. 

(By the way — humblebrag: All the deals we just ran through were scoops. Stay up on exclusives like this via our suite of newsletters.) 

And, should you require more exclusive intel on the CRE financing climate, might we recommend our profile of CBRE’s Pat Arangio and Jack Howard, the veritable kings of U.S. loan sales. Still jonesing? We interviewed Robin Potts, who runs investments for Canyon Partners Real Estate.

Back stronger than a `90s trend 

No asset class has had more ink spilled on its obituaries in the past five years than brick-and-mortar retail. (Well, maybe office … but we’ll get to that in a bit.)

There were further signs of retail’s recovery this week, not least of which include several prominent leases and sales. One lease involved South Florida restaurant juggernaut Motek opening yet another New York outlet. Another involved Australian fitness brand FS8 opening its first New York City location on the Upper West Side. Yet another involved wellness studio franchise Chelsea Piers Fitness taking 47,000 square feet along Billionaires’ Row. 

Meanwhile, across from Penn Station, a three-story retail building at 425 Seventh Avenue sold. The buyer was O5 Group, which has an apparel business line.

Deals aside, it’s the trendlines that bolster the case for brick-and-mortar retail’s recovery: more investment, more leasing, more demand for space and the rising rents that come with. One of our longer reads this week was about the resurgence along Miami Beach’s famed Lincoln Road retail drag. Check it out. 

Also check out the numerous office leases and sales that prove that asset class’ renewed success. Like e-sports company ESL Games signing for space at 551 Madison Avenue; or financial firm GFI Group doubling its footprint at 55 Water Street; or a law firm specializing in divorces moving from a sublease to a direct lease at 500 Park Avenue; or two coworking-related deals, one in Brooklyn Heights and the other in Midtown South; or an investment bank and a law firm signing leases at 75 Rockefeller Plaza.

It wasn’t just in New York, either. There was a major lease in San Francisco this past week. Healthcare tech firm R1 took more than 12,000 square feet at a prominent tower for its AI lab. (Thus continues a trend of AI-powered tenants boosting the City by the Bay’s office fortunes.) And, in the L.A. area, there was a big headquarters lease and a big government lease.

Back in New York, big was the operative adjective for some recently announced deals and plans. Olmstead Properties picked up a pair of Flatiron District office buildings. A company associated with developer Israel Hirsch filed plans to build apartments in Queens’ Far Rockaway. 

Speaking of far, check out what’s in store for a stretch of the waterfront on Staten Island, a spec of land an hour’s swim from the tip of Manhattan. New York City officials plan to invest $400 million to rejuvenate an area near its ferry terminal, including via housing. 

Out with the old, in with the nucleus

Technology is helping drive the aforementioned successes of retail and office. Whether it’s data-crunching, security measures, foot-traffic tracking or operational help, tech is a titanic part of the built environment for those asset classes and others.

And that influence comes across in our annual Power Proptech package. There are several new faces among the definitive ranking of the most powerful figures in proptech. Give it a read. 

Have a great Thanksgiving. Travel safely. See you next Sunday!