Weekly Market Report - August 19, 2025
- Broker Support
- Aug 21
- 10 min read
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Bank prepares to move thousands of employees into its new, 2.5-million-square-foot Midtown headquarters
JPMorgan Chase is set to move thousands of employees into its 2.5-million-square-foot headquarters at 270 Park Ave., New York City, after six years of development. The 60-story building is a $3 billion bet that New York is definitively back after years of uncertainty about maintaining its leadership in business and finance. The city's office rebound is driven by business executives who are looking to put the days of remote work behind them.
More companies are chasing the high-end buildings that Manhattan is known for, with some 2 million square feet of New York City's trophy office space leased in the first half of 2025. The city's tech and law firms have been signing new leases, with leasing volume accelerating in the Manhattan office market to 12.2 million square feet in the first quarter. The new JPMorgan Chase tower was the first project proposal to take advantage of the new rules, and it eventually will accommodate 10,000 employees.
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Marc Rowan’s firm provides $785M financing for NYC’s largest i-sale in years
Scott Rechler has closed his $1 billion deal for 590 Madison Avenue, marking New York City's largest investment sale in three years. Apollo Global Management provided $785 million in debt to finance RXR's $1.08 billion purchase of the Plaza District office tower from the State Teachers Retirement System of Ohio. The deal was partnered with Elliott Investment Management and closed on Thursday. The closing was delayed due to President Donald Trump's "Liberation Day" tariffs and a delay in negotiations with Cale Street Partners.
Apollo provided a $575 million loan for the company's conversion of the 5 Times Square office building into nearly 1,000 apartments. The final debt package is broken down into a $650 million senior loan, a $135 million mezzanine loan, and about $60 million in future funding commitments for tenant improvements and leasing costs. The 43-story, 1 million-square-foot property is described as a B building in an A+ location. Rechler plans to renovate the building's atrium area and explore the retail space, which is currently occupied by luxury watch seller Tourneau.
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New York City has seen a 1.3% increase in office visits compared to July 2019, marking the first time any major city has closed the prepandemic RTO visit gap. This follows a nationwide record for postpandemic office attendance, with visits down 21.8% compared to July 2019. The majority of Fortune 100 employees were subject to full-time in-office mandates last quarter, up from just 5% in Q2 2023. Miami followed closely behind New York in RTO metrics, just 0.1% below its July 2019 baseline.
Atlanta and Dallas also beat the national average growth but are still 20% below their 2019 levels. San Francisco saw the biggest year-over-year increase, followed by Houston with 19.1% and Washington, D.C. with 17%. A June JLL report found nearly 3 in 5 large-scale organizations prioritized a rise in on-site employee presence, with 37% increasing attendance expectations over the past year. Just over half of survey respondents reduced their overall footprint over the past year, while 42% enacted office attendance mandates.
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Extell Development, led by Gary Barnett, has been focusing on major projects in New York City, including 570 Fifth Ave. in Midtown, 32 W. 48th St. near Rockefeller Center, and the former Disney/ABC campus on the Upper West Side. The company's current activity is attributed to finding attractive properties, fielding appealing offers from brokers, and having other developers come to Extell directly before they put their portfolios on the market. Barnett's proactive approach to finding opportunities may work to the advantage of well-capitalized firms like Extell, as development is not instantaneous. The company's projects are likely due to the right sites becoming available at the right time, rather than Barnett trying to take advantage of broader industry trends.
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New York City's retail leasing scene is thriving again, but some tenants are eschewing some of Manhattan's most reliable retail corridors to expand across the East River. Retail availability in the city's prime submarkets hit 14.2% in the second quarter, its lowest point since at least 2017. Empire State Realty Trust (ESRT) has spent at least $240M buying up nearly a dozen buildings in Williamsburg, which has increasingly become a place that retail landlords want to own and where high-end brands want to be.
Williamsburg's asking rents are still below some other prime corridors in Q2, but domestic tourism is still driving leasing in some of Manhattan's busiest retail corridors like Fifth Avenue. However, some neighborhoods that looked like problem spots in the immediate aftermath of the pandemic have remained troubled, such as Broadway on the Upper West Side, East 14th Street, and Hell's Kitchen.
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Caesars Palace Times Square, a joint venture between SL Green, Jay-Z's Roc Nation, and Caesars Entertainment, has withdrawn plans to hand tens of millions of dollars to Manhattan Plaza residents, a key stakeholder in the casino bid. The group previously committed $22.5M over 15 years to a trust managed by Manhattan Plaza residents. The developers also committed 0.5% of the casino's profit distributions in perpetuity. The new plan will distribute the funds to the West Side Community Fund, a nonprofit that provides small grants to groups in Hell's Kitchen, Chelsea, and Hudson Yards.
The WSCF, funded by a coalition of West Side businesses, has awarded over $1M in grants since its founding in 2018. If the Times Square casino receives approval, it would be gifted $1.5M in the initial year, along with a share of the operating profits. The developers have also promised to fund other community projects, including an $81M public safety plan, $15M for a new civil rights museum, and $5M for the Callen-Lorde Center for Excellence in Sexual Health.
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88 Pine St., a 32-story office building in the Financial District, is installing solar film on its windows to reduce energy consumption. The project, which is being closely monitored by Con Edison and building owners, is expected to take three months and cost $1.4 million after a $650,000 rebate from Con Edison. The installation, manufactured by Solar Gard, is expected to lower the building's annual electric bill by at least $200,000. Con Edison is monitoring the project with an eye toward recommending other buildings follow suit, driven by Local Law 97, a statute that requires New York buildings to shrink their carbon footprint or face heavy fines.
The project is driven by Local Law 97, which affects most buildings over 25,000 square feet. The goal is to reduce emissions produced by the city's largest buildings by 40% in 2030 and to net zero by 2050. Buildings that exceed emission standards of.00846 metric tons of carbon dioxide per square foot are subject to fines. 88 Pine is the first building in the city to use this particular type of solar film and confirmed offering the tower a rebate. The utility declined to say it plans to encourage other buildings to follow 88 Pine's lead, as the technology is promising but needs to complete its own analysis first.
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Harry's Table, an Italian food market in Manhattan's Waterline Square development, is set to close on November 1 and will lose all 72 employees due to a contract loss. The restaurant, which opened in 2022, is more akin to Eataly than a traditional multivendor food hall. It offers catering, delivery services, Italian cooking classes, a bar room, multiple dining rooms for private events, and a sit-down restaurant.
The closure of Harry's Table is the latest in a series of food hall closures in the city, with venues like Gotham West Market in Hell's Kitchen, Northend Food Hall in Washington Heights, and Citizens Market Hall in Hudson Yards all shutting down in recent months. The overall number of food halls in the city has dropped to around 25 at the beginning of the year, down from more than 30 before the pandemic. However, two new food halls are set to open in the city this fall, Shaver Hall at 424 Fifth Ave. in Midtown and Time Out Market at the Zero Irving office tower in Union Square.
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470 Vanderbilt last sold for $195M in 2014
RXR Realty has acquired the first office in Brooklyn, acquiring the leasehold interest on the office building at 470 Vanderbilt Avenue in Clinton Hill. The leasehold's loan, last refinanced in 2019, has a balance of $182 million. The property, which was acquired in 2014 for under $195 million, was converted to an office in 2012 after a decade as a data center. The building is fully leased, largely to the New York City Human Resources Administration and the New York City Housing Authority.
The ground floor has 20,000 square feet of retail space, and wholesale retailer Boxed signed a lease for 15,000 square feet in 2022 at an asking rent of $50 per square foot. This marks Cross Ocean's fourth office investment in the New York metro area in the last year, and the firm is among the finalists to redevelop the Midtown CBS broadcast center. The ground lease with Sol Goldman Investments still has 60 years left on it.
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The office building is worth less than 14% of its 2015 value
Charles Cohen's Midtown East office building, 750 Lexington Avenue, has been valued at just $41 million, less than 14% of its $300 million valuation a decade ago. The property, which Cohen personally guaranteed a $130 million loan on in 2015, was constructed in 1988 and was owned by Cohen Brothers Realty for decades. However, occupancy began to slip during the pandemic, with Zara and WeWork vacating the space in 2022 and WeWork stopping paying rent in 2023. Cohen negotiated a lease amendment that tied rent to office revenue, but the building's valuation dropped to $50 million.
As of March, expenses have overtaken revenue at the office, with net operating income at -$744,915. Special servicer LNR Partners filed a foreclosure case against the property last summer and won summary judgement last month. Cohen failed to pay taxes on the property, provide financial statements, and certify that his net worth and liquidity have not fallen. The servicer is pursuing foreclosure while Cohen tries to work out the loan with the borrower. Cohen has also been waging war with Fortress Capital, winning a $187 million judgment in February after a lawsuit against him for defaulting on a $534 million portfolio. Cohen's personal net worth has sunk 57% since 2023, estimated at $1.6 billion.
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Investment bank bringing its offices to 1301 Sixth Avenue
Paramount Group, led by Albert Behler, has secured a significant lease for investment bank Piper Sandler, with the starting rent of over $90 per square foot. The deal was disclosed during the landlord's second-quarter earnings call. The lease is expected to impact Piper Sandler's space at Paramount's 1301 Sixth Avenue in Midtown Manhattan, where the bank expanded its footprint in 2020. Law firm Adler & Stachenfeld also took 40,000 square feet at the same property. In the first half of the year, Paramount executed 690,000 square feet of office leases across its New York and San Francisco portfolios. The New York properties are 88.1 percent leased, the best mark in three years
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The value of the distressed Midtown skyscraper, the Worldwide Plaza office tower, has dropped by 80% from its 2017 value, according to an April appraisal. The building's CMBS loan was acquired by SL Green and RXR, who partnered to acquire a 49% stake in the building eight years ago. The liquidating company for New York REIT has owned the majority stake since it was established to wind down the company in 2018.
The sponsors for the $940M in CMBS debt secured against the property were Goldman Sachs and Deutsche Bank. The debt was placed in special servicing last September after law firm Cravath, Swaine & Moore left its 617K SF space in the building in favor of 480K SF at Brookfield’s Two Manhattan West. The debt matures in November 2027, with the sponsors needing to make interest-only payments until then. The building's owners have been in talks for another modification to free up tens of millions in capital needed to lease up the vacancy.
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The value of the distressed Midtown skyscraper, the Worldwide Plaza office tower, has dropped by 80% from its 2017 value, according to an April appraisal. The building's CMBS loan was acquired by SL Green and RXR, who partnered to acquire a 49% stake in the building eight years ago. The liquidating company for New York REIT has owned the majority stake since it was established to wind down the company in 2018.
The sponsors for the $940M in CMBS debt secured against the property were Goldman Sachs and Deutsche Bank. The debt was placed in special servicing last September after law firm Cravath, Swaine & Moore left its 617K SF space in the building in favor of 480K SF at Brookfield’s Two Manhattan West. The debt matures in November 2027, with the sponsors needing to make interest-only payments until then. The building's owners have been in talks for another modification to free up tens of millions in capital needed to lease up the vacancy.
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Occupancy and hotel revenue are strong, but the market could face challenges
New York City's tourism sector is holding up well compared to other US cities, with many major attractions outperforming last year's performance. Attendance at Broadway shows is at its highest level since at least 2019, and visits to museums like the Guggenheim are also higher. Business travel, which accounts for about one in every five hotel rooms sold in New York, is expected to be stronger than last year. New York hotel owners also enjoy structural advantages that have helped boost business, such as a 2023 law that limits the construction of new lodging properties and increased city enforcement of restrictions on Airbnb. New York City hotels averaged an occupancy rate of 82% a week for the first half of the year, and revenue per available room was well above the national average.
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