Sunday Summary: Snake Eyes for Manhattan Casino Wannabees

Two Manhattan developers saw all their chips cruelly disappear in the blink of an eye last week.

On Wednesday the Community Advisory Committee (CAC), tasked by state officials with reviewing the bids for three new downstate gaming licenses, shot down SL Green Realty, Caesars Entertainment and Roc Nation’s $5 billion-plus proposal for a casino in Times Square at 1515 Broadway.

An hour later, the CAC put the kibosh on the $7 billion proposal from Silverstein Properties, Rush Street Gaming, Greenwood Gaming and Entertainment and Hyatt’s partnership for a 2,200-unit development (500 units would be affordable) and casino called The Avenir at 11th Avenue and West 41st Street.

For those of us observing the drama from afar, it was a very abrupt ending to a process that had dragged on for years. For the 1515 Broadway proposal, SL Green had won endorsements from political figures. It formed a partnership with Jay-Z. It wooed local landlords.

But it wasn’t enough.

Silverstein had been less flashy and public in its moves, but one might have argued that being situated several avenues west of Times Square might be an advantage. Alas, no.

“Obviously, we are disappointed that our West Side elected officials didn’t see a path forward for The Avenir project,” Dino Fusco, chief operating officer Silverstein, said after the decision. “We are grateful to everyone who has supported this project and partnered with our team throughout this process and appreciate their confidence in our vision for the Far West Side.” (SL Green’s Marc Holliday took a different tack, calling the decision “a despicable display of cowardice.”)

There are still a half-dozen proposals out there. We’ll see who gets knocked out next.

Fed up? No, down

On the national stage, the big news of last week was the Federal Reserve’s decision to lower its benchmark interest rate by 25 basis points — its first cut in nine months. (The Fed also indicated that more cuts were likely this year.)

Of course, the elephant in the room re: the Fed is its ongoing battle with the executive branch. President Trump has been pushing for control of the Fed, demanding lower rates, and attempting to remove Biden appointee Lisa Cook from the governing board. This has made many people nervous.

“The process has largely worked pretty well through the years keeping an independent Fed, and I think we would see much more volatility if the Fed got more politicized,” said Flushing Bank President and CEO John Buran. “I certainly feel it’s within the purview of the president to make his thoughts known, and clearly he has, but I think that a more politicized Fed would be detrimental to the capital markets in general and have repercussions beyond what we can even see.”

And, while the nervousness remains, this hasn’t affected money going out the door.

For instance, David Halberstam (not “The Best and Brightest” Halberstam) scored $80 million in construction financing from S3 Capital to build a new rental at 303 East 44th Street.

Urban Catalyst got $112.5 million in construction financing from Beach Point Capital for its 278-unit Aquino San Jose project in Downtown San Jose.

And Nord Development Group and Acre secured $114.2 million of construction financing and mezzanine debt from Bank OZK and PGIM Real Estate to get a 262-unit complex called Patchogue on Long Island underway.

At the same time, big money is being raised. Alexander Shing’s L.A.-based Cottonwood Group just closed a $1 billion closed-end fund for industrial logistics warehouses, data centers, multifamily apartments and new developments in general.

Also last week San Francisco-based Bridge Housing announced it was deploying $1 billion as part of its Bridge Housing Impact Fund I to buy, build, or preserve West Coast affordable housing.

Did somebody say ‘housing’?

Of course, a lot of people’s ears perk up at the mention of affordable housing — or non-affordable housing, for that matter.

J.P. Morgan was awarded its Freddie Mac Targeted Affordable Housing Optigo lender license, which opens up many more affordable housing options to J.P. Morgan customers.

Silverstein Properties and Metro Loft Management are hoping for a big payday, having put their 344,000-square-foot multifamily conversion at 55 Broad Street on the market for a staggering half-billion dollars.

Foxy Development (good name!) and Selfhelp Realty Group (another good name!) are converting the former Parkway Hospital building at 70-35 113th Street in Forest Hills, Queens, into a 145-unit mixed-use affordable senior housing center and 34,000-square-foot Jewish center.

Likewise, Rudin is officially planning a massive, 411-unit conversion of its office building at 845 Third Avenue. (Although given some of the leases we saw this week, we’d be tempted to stay in office. Salesforce took an extra 71,000 square feet at 3 Bryant Park; Bank of New York Mellon Corporation took over a sublease for 192,000 square feet at One World Trade Center; and in Florida ServiceNow is taking a whopping 200,000 square feet at Stephen Ross’s 10 CityPlace in Downtown West Palm Beach.)

Power SoCal

Tomorrow is the first day of fall, and that means all sorts of cold, damp weather enveloping the East Coast.

We don’t know about you, but we’re going to be thinking about sunny California.

While Los Angeles has had its share of bad breaks in the last year, its office market is actually having a (slightly) interesting rebound.

According to Newmark, there was $1.8 billion in office investment sales in the first half of this year, with second-quarter sales volume at twice what it was in 2024. (Granted, with steep discounts and a huge part of the inventory essentially unrentable.)

And the people who have been seizing buying opportunities are among the steadiest hands in the business — companies like Douglas Emmett Management and Jamison Services — who know what to do with this real estate.

All of which gets us in a proper frame of mind for Power SoCal, our annual list of the most important people in Southern California real estate.

It is worth a good, long look. We’re sure that after you read about the Olympiads of the profession, you’ll be itching to spend the rest of the year out there, too.

Speak to you next week — and, for those who observe, happy new year!