Weekly Market Report - April 7, 2026
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The plan to build a supertall tower next to Grand Central has progressed with the submission of initial permits. Todd Rechler of RXR has filed plans for a 95-story tower at 175 Park Ave, where RXR and TF Cornerstone have been working on the project for seven years. The permits were filed under Commodore Owner LLC, referencing the site's history as the old Hotel Commodore. In 2021, the City Council approved rezoning the site, currently home to the Hyatt Grand Central New York hotel. The updated tower proposal includes 95 stories, exceeding previous reports, and encompasses nearly 3 million square feet.
Office spaces will occupy floors 10 through 82, while the upper floors will feature hotel rooms. Additionally, there will be retail space and a bar on the third and fourth floors, respectively, with dedicated bike storage below. Although RXR did not comment on the tower's height, they indicated that recent filings are significant for advancing the transformative project, with construction anticipated to begin soon. The project's projected cost stands at $6.5 billion.
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Manhattan office rents are approximately 15% lower than advertised rates, as landlords offer extensive concessions including free rent and tenant improvements to attract tenants, reflecting ongoing pandemic impacts. Economist Stijn Van Nieuwerburgh notes the significant gap between asking and paid rents, affecting New York's property tax revenue—office buildings contribute 20% of city revenue. With vacancy rates near 21%, double pre-pandemic levels, average asking rents at $73.19 per square foot remain below 2019 averages.
Consequently, lower rents could lead to decreased cash flows and property values. Meanwhile, while some properties face foreclosure, there are signs of recovery, such as leasing activity at the Feil Organization's 261 Fifth Ave., which experienced a 12-year expansion lease. The property tax system's inequities remain a pressing issue, as Mayor Zohran Mamdani labels it fundamentally broken.
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Manhattan's office market reported a strong first quarter in 2026, leasing approximately 11.8 million square feet, marking the highest quarterly activity since 2014. This represented a 43.8% increase from the five-year average and a 41.6% increase from the ten-year average, though slightly down from Q4 2025. The availability rate decreased from 13.9% to 13.7%. Bank of America's lease of 2.4 million square feet at 1 Bryant Park constituted over 20% of first-quarter demand, making it the second-largest deal of the century for Manhattan.
Other notable deals included the renewals and expansions of law firms and fintech companies. While Midtown saw a significant leasing uptick, Lower Manhattan’s activity declined over 50% quarter over quarter. Average asking rents were $77.55 per square foot, with Midtown at $84.74 and Lower Manhattan at $61.70 per square foot. The overall market is continuing its recovery trend.
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New York state legislators are contemplating limits on commercial rent increases in NYC, akin to current residential rent stabilization laws. Led by Sen. Julia Salazar, a proposed bill includes a commercial Rent Guidelines Board to set maximum rent increases, tenant renewal rights, and standardized lease terms of 10 years. However, retail landlords express skepticism, noting complexities in retail leases that differ significantly from residential agreements. Despite arguments from Salazar and Assembly Member Emily Gallagher regarding unsustainable rent hikes causing business closures, landlords contend that they prefer working collaboratively with tenants on rent pricing rather than holding spaces empty for higher-paying tenants.
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A potential residential tower is proposed for one of the last large undeveloped lots in Hudson Yards, with plans filed by Konstantin Gubareff of Prospect Development Group for a 34-story building featuring approximately 450 apartments at 460 10th Ave. The skyscraper would offer around 232,435 square feet of residential space, consisting of either 12 or 21 apartments per floor, plus 16,800 square feet designated for commercial use. Amenities include a basement parking garage for 40 cars, 91 bicycle parking spaces, and various lounges and terraces.
The lot is owned by Sherwood Equities, which had previously planned a 42-story condo tower with over 200 units and additional retail space. Recently, Sherwood sought approval to expand its project and listed the site for sale at over $100 million, raising questions about its intentions to develop independently or potentially collaborate with Gubareff. Both parties declined to comment on the matter.
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Charles Cohen's financial difficulties continue as foreclosure proceedings impact one of his smaller properties, 222 E. 59th St., following a series of defaults on over $500 million in loans. Despite owning approximately 10 million square feet of real estate, Cohen's holdings are diminishing as lenders take control of multiple properties. He previously lost the tower at 135 E. 57th St. due to a ground lease default and his former headquarters at 750 Lexington Ave. in a foreclosure auction. To address $187 million in personally guaranteed debt, he sold 623 Fifth Ave. and 3 E. 54th St. at distressed prices.
The next potential auction is 622 Third Ave., a significant 1 million-square-foot property. In total, Cohen faces the loss of over 2 million square feet of Midtown real estate, yet remains influential in New York's development scene. His portfolio still includes notable properties like 465 Park Ave. and the Pacific Design Center. A New York judge appointed a receiver to manage his assets, imposing a deadline for repayment to Fortress Investment Group, which has accused Cohen of delaying sales and transferring assets to his wife, allegations he denies.
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Developer Jack Yadidi is expanding his Midtown South real estate portfolio by filing plans for a 32-story mixed-use building at 28 W. 37th St, covering approximately 86,000 square feet. The Sioni Group, co-founded by Yadidi, plans to demolish a two-story commercial structure at this location, situated between Fifth and Sixth avenues. The proposed development will feature 95 residential units, about 450 square feet of commercial space, and a 20-foot rear yard. Architect Damir Sehic of C3D Architecture is associated with the project. Since its establishment in 1992 with their father, the Sioni Group has developed properties like Casoni and The Arabella. In 2025, the group acquired a Midtown office for $50 million and sold the site of the Stewart Hotel for $255 million.
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Los Angeles’ entertainment sector may soon face challenges similar to those affecting New York, as Kaufman Astoria Studios' ownership deals with foreclosure threats. The partnership, linked to Hackman Capital Partners and Square Mile Capital Management (now Affinius Capital), allegedly defaulted on a $340 million loan for the historic Queens facility, known for producing acclaimed shows and films like “Succession” and “Goodfellas.” Legal documents reveal a lawsuit filed in Queens state Supreme Court, claiming the joint venture failed to repay the debt by its maturity date of November 9, 2025, and currently owes $359.1 million.
The studio spans over 500,000 square feet, originally opening in 1920 as Paramount Pictures’ first home and acquired for approximately $600 million in 2021. Hackman’s business encompasses numerous studios across North America and Europe. This legal issue arises during a significant downturn in the entertainment industry, marked by a 30% drop in employment since 2022 due to factors such as AI and overseas production shifts. Meanwhile, New York is expanding its production capabilities with new studio projects, positioning itself as a competitor to Hollywood. Responses from involved parties, including Deutsche Bank and Hackman Capital Partners, remain unreturned.
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Extell Development has appointed Andrew Chung as president and co-CEO, partnering with founder Gary Barnett. Chung, who previously founded Innovo Property Group in 2015 and held a senior position at The Carlyle Group, will oversee Extell’s strategic direction and development pipeline. Barnett praised Chung for his combination of development expertise and institutional investment experience. Extell, recognized in New York real estate, is currently focused on developing skyscrapers at 655 Madison Ave. and 871 Seventh Ave., both over 70 stories high, and transforming the former Disney/ABC campus on the Upper West Side. Innovo Property Group specializes in industrial real estate, with recent agreements for industrial sites in Long Island City and a large facility in the Bronx. Chung will continue in a managing member role at Innovo alongside his responsibilities at Extell.
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Moody’s has downgraded Lincoln Center's credit outlook to "negative," citing concerns about the financial burden from its $335 million west side renovation plan. This major project involves removing a wall on Amsterdam Avenue, connecting the Metropolitan Opera, New York Philharmonic, and New York City Ballet to public housing and schools, and adding green spaces and a 2,000-seat outdoor stage. Despite generating around $200 million annually, Lincoln Center, which already has $322 million in long-term debt, plans to borrow an additional $180 million for the transformation.
Moody’s expressed that this high leverage could jeopardize the organization’s financial stability, leading to a possible credit downgrade within the next year. Although Lincoln Center maintains a strong investment-grade rating (A-) and claims to have raised 65% of the needed funds, it acknowledges the challenges posed by weakened operating performance and growing financial pressures faced by other arts organizations in New York. In response, Lincoln Center emphasized its commitment to philanthropic support and a long-term investment strategy.
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A Chelsea condo has been sold for nearly $15 million to the Community Church of New York, located at 207 W. 25th St., covering around 20,500 square feet across the ground and second floors. This space was the showroom for Stickley Audi & Co. for 19 years. Stickley Audi & Co. will maintain ownership of the building's third floor.
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Silverstein Properties, Metro Loft Management converted 571-unit building
Scott Rechler’s RXR is spearheading a $500 million recapitalization of 55 Broad Street, marking a significant office-to-residential project. RXR has formed a joint venture with Silverstein Properties and Metro Loft Management, initiating a crucial venture for the office-to-residential market. Details of RXR’s investment remain vague, but it’s described as a preferred-equity investment that will help owners refinance their construction loan. The building was 76 percent occupied when it launched in September. In 2022, Silverstein and Metro Loft agreed to buy the former Goldman Sachs headquarters for $180 million, closing the deal in summer 2023 for $172.5 million after interest rates rose. They financed the project with a $220 million construction loan from Carlos Slim’s Banco Inbursa, with Ares Real Estate and Rudin also involved. Other large office conversions, similar to 55 Broad, are also exploring long-term buyers post-completion.
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International family office signs $327 psf lease: Soloviev
New York’s office market has reached a new peak with Soloviev Group leasing at 9 West 57th Street for $327.50 per square foot, surpassing the previous record of $320. This 10-year lease covers 5,063 square feet on the 50th floor, featuring prime views of Central Park. Soloviev noted the lease reflects the market's high demand. Prior to this, the record was held by SL Green’s One Vanderbilt, where a lease was signed for $320 per square foot in 2022. Although rents above $300 per square foot remain rare, they are becoming increasingly common, evidenced by the 313 leases over $100 per square foot recorded in 2025. Manhattan's average asking rent reached $76 per square foot at the end of 2025, its highest in five years yet still below the 2019 peak. The market is experiencing a K-shaped recovery, benefiting high-quality buildings while struggling ones face increasing challenges. Nationwide, CMBS office delinquency rates hit a record 12.34% in January, influenced by major loans tied to New York properties.
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An AI firm specializing in connecting brands with content creators, Agentio, has relocated to Manhattan, signing a five-year lease for 20,000 square feet at 295 Fifth Ave. They moved into the 11th floor during the first quarter and currently employ 52 people. Previously, Agentio occupied a coworking space at 25 Kent in Williamsburg for around a year. CEO Arthur Leopold indicated the new office space allows for anticipated growth, with plans to exceed 100 employees by year’s end.
The building's collaborative design, premium amenities, and central location are key advantages for the firm, which raised $40 million in a Series B round, valuing it at $340 million. The space’s asking rent was $105 per square foot. The Textile Building, 295 Fifth Ave., hosts notable tenants, including law firm Quinn Emanuel and hedge fund Bridgewater, reflecting strong office leasing demand in the Midtown South area.
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