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Weekly Market Report - July 22, 2025

  • Writer: Broker Support
    Broker Support
  • Jul 25
  • 12 min read

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Office vacancy rates are high in many major cities, with San Francisco having the highest at 36%. Manhattan, however, has been sheltered from the worst of this storm, with the lowest office vacancy rate in any major city at 16% in the second quarter. This is due to tighter inventory and the demand for office space, driven by big employers demanding workers return five days a week. Manhattanites often live close to where they work, in districts that have long served a mix of uses other than just offices.


The office market is on a recovery path, with New Yorkers going to the office more often than in other major cities, helping drive demand for space. Demand for new space is strong enough that developer BXP is prepared to start a 1 million square foot tower at 343 Madison Ave., New York's biggest speculative office project since Larry Silverstein developed 7 World Trade Center in 2006. However, the biggest threat to Manhattan's continued recovery is office workers who can't find an affordable place to live.


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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 U.S. 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 on Fifth Avenue 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. The city's tourism organization said in May that it expected 52 million domestic visitors and about 12 million foreign visitors for 2025, roughly the same breakdown and total as last year.


New York hotel owners also enjoy certain structural advantages that have helped boost business. A 2023 law that limits the construction of new lodging properties has greatly limited new supply, and the number of short-term rentals competing with hotel rooms has dwindled, after increased city enforcement of restrictions on Airbnb and similar rental listings. New York City hotels averaged an occupancy rate of 82% a week for roughly the first half of the year, which is on par with last year and nearly 20 percentage points higher than the national rate. Revenue per available room in New York City was well above the national average figure of $99.94.


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Tech company joins IBM, Coinbase at Midtown South tower


Sigma Computing has signed a lease for 64,000 square feet at One Madison Avenue, a Class A office tower overlooking Madison Square Park. The cloud-based data analytics and software platform will occupy a portion of the third floor, bringing the occupancy to 78 percent. The asking rent for the lease was $115 per square foot. Sigma is relocating from an office it began leasing three years ago, signing a five-year, 15,000-square-foot lease at Zero Irving in 2022 for its first New York City office.


IBM and Coinbase also occupy space in the 27-story building, which spans a full block between Park and Madison Avenues, as well as East 23rd and East 24th Streets. Other tenants include Franklin Templeton, which signed a 15-year lease for 347,000 square feet in 2022. Sigma is one of many big tech companies signing sizable leases in the borough, including OpenAI inking a 90,000-square-foot office lease at Kushner’s Puck Building in Soho last year and fintech firm Chime securing an 84,000-square-foot space at Bromley Companies’ 122 Fifth Avenue in Flatiron last May.


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SL Green and Wharton Properties have acquired a $195M loan tied to 1552 Broadway and the retail portion of 1560 Broadway in Times Square, despite owing more than $20M in unpaid interest. The mortgage was originated by United Overseas Bank in 2017 and transferred to a venture controlled by SL Green and Jeff Sutton's firm last month. The venture paid $63M to buy the debt, which had ballooned to $219.5M when including $26.4M of accrued and unpaid interest.


The floating-rate debt matured in February 2024. The nearly 58K SF across the two properties was just 12.6% occupied as of Dec. 31. SL Green and Sutton acquired 1552 Broadway and the leasehold on the retail at 1560 Broadway for $137M in 2011. The former building, known as the I. Miller Building, was leased to Express, which was reportedly paying $20M annually in rent before filing for bankruptcy last year and closing the store. SL Green has made a habit of escaping troubled loans for huge discounts, paying less than 30% of the outstanding balance at 1552 and 1560 Broadway.


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Park Avenue-based real estate investment firm Savanna has run out of time to pay off a nearly half-billion-dollar loan tied to a Midtown Manhattan office tower. The $463M CMBS loan tied to 5 Bryant Park matured on June 8, and Savanna failed to make the required balloon payment. The loan was taken out in 2018 to finance its $640M purchase of the 34-story Midtown Manhattan tower from Blackstone. Savanna took out the loan in 2018 to finance its $640M purchase of the 34-story tower from Blackstone. The 683K SF building on Sixth Avenue was 81% occupied at the end of March, and its net cash flow has fallen more than 20% from the debt's underwriting.


Interest payments and operating expenses have both increased, and the debt is now underwater. Savanna has been in talks with the loan's master servicer and hopes to have a refinancing deal in place within 90 days. S&P Global downgraded three classes of the CMBS debt in September, including the $200M top-rated class, which it lowered from a AAA rating to AA. Savanna has faced trouble refinancing two other loans in the neighborhood, with Wells Fargo winning a default judgment in a case in May.


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SL Green Realty, the largest owner of Manhattan office space, has exceeded its initial $1B fundraising goal for its opportunistic debt fund after receiving $500M in new commitments this week alone. CEO Marc Holliday announced the success on SL Green Realty's earnings call, despite a slight dip in occupancy. The REIT's FFO was down by 20% from the same period in 2024, hitting $1.63 a share. SL Green signed 46 leases in Q2, bringing its total for the first half to 91 deals spanning 1.1M SF. The occupancy was 91.4% at the end of the quarter, down from 91.8% at the end of March. The REIT is still on track to hit its projected 93.2% occupancy by the end of 2025. SL Green's steady performance comes as recession fears, triggered by President Donald Trump's tariff policies, begin to abate. The REIT also received a windfall from the sale of 522 Fifth Ave., whose debt it bought at a discount last year.


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Vornado Realty Trust is paying $50M to refinance a 1.2 million office tower in its Midtown South domain around Penn Station. The REIT secured a $450M CMBS loan for Penn 11, a five-year interest-only loan with a fixed rate of 6.35% and maturing in August 2030. The new loan was originated by Citi Real Estate Funding, Bank of Montreal, and Societe Generale Financial Corp. The 26-story building, previously the Equitable Life Assurance Building, was once the headquarters for Macy's.


Apple is a subtenant with Macy's at Penn 11, paying rent directly to Vornado. The tech giant occupies 460K SF in the building, more than doubling from 220K SF in 2020. The building is also AMC Networks' headquarters, occupying 324K SF. Penn 11 is a key piece of Vornado's longstanding investments in the neighborhood, having been redeveloped by Steven Roth in 1997 and 2000. The company has already redeveloped 1 and 2 Penn Plaza into Class-A office towers, and plans to replace Hotel Pennsylvania with another office tower.


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Los Angeles-based CIM Group has acquired a six-building portfolio in Williamsburg, including a century-old brick warehouse, for almost $56 million. David Thompson, vice president and chief financial officer of the west coast investment firm, signed the deed acquiring the properties at the corner of North 3rd and Berry streets for $55.7 million. The sale was the result of a Chapter 11 bankruptcy protection filing initiated by the previous owner, the Israeli real estate company Leny Group, last year.


The six adjacent properties, converted in 2009 from commercial warehouses into mixed-use buildings, include 40 rental units and about 36,000 square feet of retail space, a portion of which is home to the popular bar Radegast Hall & Biergarten. Leny Group acquired the property in 2015 for $92.2 million and fell into debt, ultimately owing about $70 million on its defaulted mortgage. A foreclosure auction was scheduled for the buildings last July, but Leny Group filed for Chapter 11 bankruptcy protection on the same day, cancelling the auction and sending the matter to bankruptcy court.


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Wharton Realty Group and Crown Acquisitions have acquired a former Macy's furniture store on Staten Island for $16 million. The store, located at 98 Richmond Hill Road in the New Springville neighborhood, was closed earlier this year due to the retail giant's mass closures. The property was acquired by three entities tied to a Lower Manhattan address. Crown Acquisitions' partner Isaac Chera confirmed the acquisition and plans to lease it to another big box retail tenant. The seller of the building was Macy's Retail Holdings, a subsidiary of the American department store chain. The Staten Island furniture store was one of five Macy's locations in the city to close last year as the retail chain reduced its brick-and-mortar footprint. The company announced plans to close 150 "underproductive" locations through fiscal year 2026 but has only revealed 66 so far. The chain's department store within the Staten Island Mall remains open.


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A Manhattan Supreme Court lawsuit alleges that Aaron Katz, principal of Select Garages, has defaulted on a $44 million debt tied to his three downtown properties in Greenwich Village and one on the Upper West Side. Katz acquired the garages in 2021 for $16.2 million and the Upper West Side one in the same year for $13.5 million. The Bank of Montreal took out the $44 million loan on all four properties in spring 2023, which was transferred to a trust associated with Texas-based special servicer, Greystone Servicing Company. The lawsuit also claims that Katz failed to collect rent from his tenants, including the $278,000 owed each month for the three East 9th Street facilities and the roughly $147,000 owed for the Broadway property. The lawsuit does not specify why Katz hasn't been collecting rent but notes that the tenants are affiliated with his company. Attorney Vivian Arias sent Katz an initial notice of default in March and a second notice a few months later.


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Empire State Realty Trust has acquired two buildings in the North Brooklyn neighborhood of Williamsburg for a combined $31 million. The two properties, both vacant, were sold by Nassau County-based ABA Realty Management. The real estate firm's executive vice president, Thomas Durels, signed the documents on behalf of the buyer. The buildings are located in an area zoned for light manufacturing, allowing for a mix of commercial and community uses, as well as medium-density residential. This is not the company's first acquisition in the neighborhood, as they struck a $195 million all-cash deal last year to purchase a couple of retail spots on North 6th Street. CEO Tony Malkin referred to his firm as "omnivorous opportunivores" when it comes to jumping on real estate opportunities. Empire State Realty did not respond to a request for comment by press time.


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Parkview Financial, a Los Angeles-based lender, has sued the developers of a planned hotel conversion near Columbus Circle for $207 million in 2022. The brothers, Alberto and Salomon Smeke, claim Parkview failed to properly fund the project, leading to delays and problems at the project. The building, which dates back to 1929, was purchased by Ian Schrager's Morgans Hotel Group in 1997 and opened in 2000 as an 878-room hotel. The brothers argue that Parkview created the situation by failing to properly fund the project. The lawsuit also focuses on tenant issues, as the brothers claim that the city had reasonable cause to believe tenant harassment was occurring and issued a stop-work order. Parkview is planning to hold a foreclosure sale for the project on July 25, and the company has sued the Smekes for breach of contract.


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Planned community’s valuation has been slashed to $71 million


The Parkchester planned community in the Bronx has seen its commercial property's valuation drop from $112 million to $71 million, a 37% reduction, according to Morningstar Credit. The property, which includes nearly 12,300 apartments, is controlled by the Parkchester Preservation Company, which took over the development in 1998. The property's commercial property comprises 12 two-story office and retail buildings, totaling 541,700 square feet. took out $65 million on the property in 2015, but the property's financial situation worsened after a rise in real estate taxes.


From 2017 to 2019, property taxes increased by $516,000 per year on the buildings, a nearly 16% increase. Occupancy fell from 90% full in 2022 to 77%, with rents at $32 per square foot and income falling by $439,700. The borrower is now seeking takeout financing or a forbearance or extension on the loan. The net operating income is no longer enough to cover debt service on the loan, covering only 38% of the annual debt obligations. Macy's is the largest tenant in the property, with the earliest lease expiration being 2028.


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Meyer and Joseph allegedly racked up more than 150 violations at Times Square’s Hotel Carter


The city of New York has filed a civil lawsuit against Meyer and Joseph Chetrit, who claim they have failed to maintain the "dirtiest" hotel in Times Square, the Hotel Carter. The lawsuit alleges that the Chetrit family, who own a large building portfolio, have refused to comply with multiple laws meant to protect the public and keep buildings in New York City safe. The city alleges that the Chetrits have racked up more than 155 violations at the 120-year-old property, claiming they have abandoned the project after defaulting on their $233 million mortgage earlier this year.


The Chetrits paid $192 million in 2015 to buy the hotel, which TripAdvisor once named the dirtiest hotel in the city. The city's lawsuit claims that the Chetrits planned to renovate the property but have only intermittently held permits, and the building remains in disrepair. The lawsuit names eight other members of the Chetrit family who hold ownership stakes in the property as defendants. The suit seeks an injunction against the conditions and an order to fix them, as well as unspecified civil penalties. The city alleges the Chetrits have abandoned the property.


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Loan from Apollo, Deutsche Bank dates back to 2020 acquisition of the studio


Hackman Capital Partners and Affinius Capital have reached a fresh agreement on the $280 million debt backing Silvercup Studios in Long Island City. The loan originated by Apollo Global Management and Deutsche Bank was due to mature soon. The deal was arranged by Newmark's Jordan Roeschlaub and Jonathan Firestone. Silvercup Studios, founded in 1983 on the site of the landmark Silvercup Bakery, is the largest film and television studio in New York City. The studio includes three campuses in Long Island City and the Bronx, with 23 soundstages and 265,000 square feet of office and production support space. The studio has seen a rise in studio development and productions in the tri-state area, especially in New Jersey, after the state revived its tax credit for production in 2018. Hackman received approval for its $1.25 billion plan to redevelop its Television City studios in L.A.'s Fairfax Historic District, aiming to complete the project by 2028.


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Bank won a $32.8 million foreclosure judgment


Israeli bank Bank Hapaolim has acquired two Financial District sites in Manhattan for $36.9 million after a dispute with a borrower. Hidrock Properties purchased the sites in 2018 from Raymond Gindi, totaling $41 million in two separate transactions. The developer, connected to the Hidary family, borrowed $32.8 million from the bank to construct a hotel. However, by 2022, Bank Hapaolim began the foreclosure process, alleging that Hidrock failed to meet the loan's maturity deadline despite three extensions. The total owed reached $35 million. The borrower countersued, claiming it was wrongly placed in default.


The bank won out, scoring a $39.2 million judgment. The auction was scheduled for early 2024, but Bank Hapaolim agreed to wait another year to allow Hidrock to market the property itself in hopes of a better sale. The effort failed to find a buyer, and the title was transferred to the bank this January. Bank Hapaolim claims that when it found a prospective buyer, Hidrock began to sabotage the sale. The bank sued in June, but withdrew the suit later in the month. It is unclear what Bank Hapaolim plans for the sites. Hotel construction is no longer as easy as it was in 2018, and Hidrock's loss in the area is not their first.


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Charles Cohen personally guaranteed part of a half-billion loan, and now Fortress Investment wants to collect


Charles Cohen, a real estate mogul, has been seized by Fortress Investment Group after his business defaulted on a $535 million loan with a $187.2 million personal guarantee. Cohen's collateral included a Manhattan office tower, the Le Méridien Dania Beach hotel in Fort Lauderdale, Fla., and four other properties. Fortress claims it was simply taking what it is owed. Cohen's business defaulted last year, and Fortress took control of most of the collateral. However, the firm said that the value of those properties fell far short of what Cohen owes.


Now, the lender is trying to confiscate Cohen's personal possessions, including his yachts and other valuable assets. Cohen's net worth is nearly $2 billion, and he is in the process of selling some properties to pay Fortress but needs more time to complete complicated deals. Attorneys for Cohen say that Fortress's actions amount to improper harassment. Cohen's family's lives are being disrupted, and Fortress subpoenaed Cohen's family members because he transferred personal assets to them and because they are involved in running or financing his companies.

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