Sunday Summary: It’s a Forever 9 to 5 World

While she might have been best known as the great country troubadour of love, betrayal, heartbreak and her coat of many colors, did any singer offer a better anthem of the office grind than Dolly Parton in her immortal (and immortally funny) “9 to 5”?

None that we can think of.

This urban paean was far more critique than celebration. That being said, office life is even more resilient and bustling than when the late, great Parton wrote the song in 1980.

To wit, in the waning days of August (don’t people take vacations anymore? apparently not) we clocked multiple leases that broke the 100,000-square-foot barrier last week.

At Elecor Properties’ 1301 Avenue of the Americas, KeyBank signed a 15-year renewal and expansion to 112,924 square feet.

And, at George Comfort & Sons’ 200 Madison Avenue, the health and wellness communications firm, Havas Health, renewed its current 189,461-square-foot footprint and added an extra 64,657 square feet, bringing their total up to 254,118 square feet.

There were a lot of other smaller leases (Circle Realty Group taking 37,600 square feet at 14 Penn Plaza, for example, or the AI startup Thinking Machines Lab taking 21,500 square feet at Kalimian Properties’ 79 Fifth Avenue), but the office activity was not limited to New York.

In Washington, D.C., the law firm Sheppard took 107,224 square feet at In-Rel Properties’ 2033 K Street NW.

In nearby Chantilly, Va., Meridian Group, Harrison Street Asset Management and HLM Associates paid (we think) $67 million for a five-building office portfolio in Chantilly, Va., totaling some 431,000 square feet.

And, in Doral, Fla., Wells Fargo provided $53.5 million in financing for Banyan Street Capital and Independencia Asset Management’s Doral Center — a 290,000-square-foot office complex.

Indeed, it’s a 9 to 5 world everywhere!

My Bay Area mountain home

Of course, there was plenty of housing news, too.

In Jersey City, Rockpoint and Urby scored $277 million in construction financing for Phase 2 of the 748-unit 201 Hudson – by Urby, courtesy of Truist.

Across the river, Hawkins Way Capital shelled out $51.5 million to the New School for the 268-bed Loeb Hall, a dormitory at 131-135 East 12th Street a few blocks from the university’s main center.

Also in Lower Manhattan, Kinsmen Property Group put forward ambitious plans to build a 29-story, 124-unit housing for seniors, a 99-unit 26-story mixed-use building with ground-floor retail, and a 26-story building with 99 mixed-income units on a lot at 156-166 Bowery.

And, on the West Coast, TruAmerica Multifamily’s SHAC Apartment Communities received $123.5 million in construction financing for a multifamily project in the San Francisco Bay Area from Fifth Third Bank and California Bank & Trust.

It takes a lot of money to be this artificial

Yes, office and housing seem to be humming along nicely, but one shouldn’t think they were the only big stories we saw last week.

We learned that proptech — and particularly AI-driven platforms — has drawn a significant amount of seed funding, with $4.53 billion raised in the first half of the year across 231 disclosed funding rounds, as per a recent report from the Center for Real Estate Technology and Innovation (CRETI).

“AI has made it faster and less expensive to build new technology, so it makes sense that we’re seeing more startups and investment coming into proptech, but building a product is only the first step,” warned Chase Harrington, president and chief revenue officer at property management software company Entrata, in a statement to Commercial Observer.

“I think that will be the real test for this new wave of proptech companies. There may be more capital available to get businesses off the ground, but long-term success will depend on whether they understand the industry well enough to solve real operational problems and prove their value once they’re deployed across an actual portfolio.”

Other areas of real estate-related technology have been, er, booming.

The geography around Southern California’s Back Bay — Torrance, Hawthorne, Long Beach and El Segundo, traditionally the backbone of U.S. defense and aerospace manufacturing — has seen a wild uptick in activity as the Defense Department seeks to replenish dwindling stockpiles of munitions.

“The growth curve we’re seeing for the South Bay right now is unprecedented,” said Mac Burridge, a managing director at JLL’s advanced manufacturing team. “It’s very akin to the Inland Empire during COVID, where there was just a frenzy for space and only a finite amount available.”

Oh, and while we’re in a scientific frame of mind, after a long period of oversupply and instability, it looks as though life sciences real estate is poised to return to some semblance of normalcy — although not quite yet.

Last quarter — as per a Cushman & Wakefield report — rents were down and vacancy rose. However, venture capital is up sharply from last year (30 percent) and deal count rose (9 percent), and the construction pipeline looks like it’s finally manageable after an explosion of deals during COVID. Which are some pretty good signs.

See you next week — and we’ll always love you, Dolly.