Sunday Summary: A Big Office Sale … in Los Angeles?

There have been interesting nine-figure office transactions in South Florida and New York City over the last few months — just last week Tishman Speyer spent $105.5 million on 148 Lafayette Street for its first U.S. office purchase since 2021 — but the big office white whale has seemingly eluded the Southern California market…

Until now!

We learned that Uncommon Developers just plunked down $210 million to buy the 52-story Figueroa at Wilshire in Downtown L.A. from Brookfield Properties!

That feels like kind of a big deal.

As recently as April we had seen reports from Savills saying that the Los Angeles office market had reached a low.

“Elevated leasing activity seen in Q1 2025 has provided cautious optimism that the market has bottomed,” noted the April Savills report. “On the other hand, most activity remains renewals as occupiers have firmed up their return-to-office plans in recent months.”

Uncommon Developers is getting a very good deal on the property. They’re paying $150 million less than Brookfield shelled out when it purchased it 20 years ago. (Twelve years ago, Figueroa at Wilshire was refinanced to the tune of $250 million.)

Still, one has to feel good when a party like Uncommon Developers sees the potential in office again.

Let’s get political

We’ll admit that we had our eye on last week’s spat between Elon Musk and Donald Trump — and not just the highly public drama around a happy relationship gone explosively sour.

From a CRE perspective, Musk was the face of the federal government’s purge of its real estate assets (along with other organic assets), and one wonders how this will proceed now that he has become persona non grata in MAGAland.

If we had to guess, the real estate discharge will probably proceed with or without Musk.

Just before the public Musk-Trump break, we learned that the U.S. Office of Management and Budget authorized the sale of 11 federally owned office buildings (four of which are in the D.C. area) comprising millions of square feet of office space.

If this selling spree continues apace, that will mean a lot of office real estate that will be up for grabs. (Thankfully, there are still investors who see potential in the D.C. area despite a potential office glut.)

We also had our eye on the New York mayor’s race, which kicked into high gear with a debate this week.

As far as CRE is concerned, it looks like former Gov. Andrew Cuomo is the favored son.

The political action committee New York Apartment Association (NYAA) — a combination of the Community Housing Improvement Group and the Rent Stabilization Association, which pushes a pro-landlord agenda — is promising to spend $2.5 million on the race touting Cuomo’s housing strategy.

“In this two-person race, Andrew Cuomo is the best candidate to increase the supply of housing,” the PAC’s CEO, Kenny Burgos, told Politico. “The alternative choice is unacceptable and will decimate the housing stock.”

But New York elections are not just about the mayor, and NYAA is not the only entity throwing its weight around.

Airbnb’s super PAC, Affordable New York, is spending $100,000 to elect the Bronx’s Elsie Encarnacion to the City Council, and that’s only the tip of the iceberg. So far the PAC has spent $654,000 on recent campaigns in the Bronx

“Airbnb is just getting started,” said Airbnb’s Nathan Rotman in a statement to Commercial Observer. “We are planning additional major investments in primary and general election races across New York City in 2025 and the state in 2026 to support candidates who champion common-sense solutions that address the affordability crisis head on, promote neighborhood safety, and empower homeowners to share their homes.”

Leasing, leasing, leasing!!

The May numbers are in and the news is… not terrible.

Colliers says in its latest office leasing report that there were 3.13 million square feet of deals signed in May. That number is smaller than in April (7.2 percent less) but it’s an improvement on May 2024’s leasing figures (5.2 percent higher).

“If the amount of activity that we’ve seen from Jan. 1 until the end of May simply continues, and that’s a big if … we would have the strongest year of leasing since 2001,” said Colliers’ Franklin Wallach. “The demand is still in a very healthy place, but one or two deals can always move the needle.”

Indeed, there were some healthy leases.

We learned that electronics giant Samsung is nearly doubling its footprint from 36,000 to 71,000 square feet at Vornado Realty Trust’s Penn 1.

AlphaSense, an AI-driven support firm for tech companies, took a 10-year, 50,000-square-foot lease at CommonWealth Partners’ 441 Ninth Avenue.

And they weren’t the only tech firms signing leases — Queen One, an e-commerce platform developer, signed a 10-year, 29,718 square-foot lease at Global Holdings Management Group and Rubenstein Partners’  25 Kent Avenue in Williamsburg, Brooklyn.

Sunday reading

One can think despairingly about the wicked world and all its problems, or one can think creatively and optimistically.

Obviously, everyone with any kind of heart felt it broken by the California wildfires of earlier this year — but sometimes crisis can lead to opportunity.

That’s sort of what RSG 3-D is. This company is creating and selling fire-resistant building materials — which you can read about here.

Likewise, despite all the back and forth about tariffs and the inherent tumult of the office market, a lot of private creditors have realized they’re going to have opportunities that banks won’t have for quite some time. That’s another story worth kicking back and reading.

Finally, there’s always a good, old-fashioned sit-down with one of the titans of the industry. This week we spoke to BGO’s Abbe Franchot Borok about the firm’s strategy of focusing on construction, value-add and core senior lending in multifamily and industrial, and more.

Speak to you next week!