Weekly Market Report - June 18, 2026
- 16 hours ago
- 10 min read
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More than two years after defaulting on its debt, RXR is putting the Helmsley Building in Midtown Manhattan up for sale, seeking approximately $670 million. The asking price of $481 per square foot exceeds the property’s debt level. RXR decided to sell due to improvements in the New York City office market. The property's distress began with a foreclosure action in December 2024, following an alleged default on a $670 million mortgage. RXR acquired the landmark 35-story building in 2015 for $1.2 billion, financing it with a $785 million loan and investing $190 million in upgrades.
An appraisal in November 2024 valued the property at $770 million, about 64% of its purchase price. RXR considered converting part of the building into residences, but details of this plan remain unclear. Since the foreclosure, some tenants like Clarion Partners and Voya Financial have vacated, while others, such as StoneX and Banco de la Nación Argentina, have renewed their leases. Currently, the building is 46% leased. SL Green's subsidiary serves as the special servicer for the debt.
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Meyer Chetrit faces further challenges with the potential loss of another building at 26 Broadway, as a $290M CMBS loan has moved to special servicing due to the owner's inability to maintain payments. The Financial District office tower, valued at $425M in 2021, has struggled with declining occupancy, now at 75%, down from 83%, while operating expenses have soared—property insurance up 65%, utilities 79%, and repairs 108%. The debt service coverage ratio has dropped to 0.76x, below breakeven.
Chetrit purchased the property for $225M in 2007, with a ground lease, but subsequent family turmoil after Jacob Chetrit’s death has prompted legal issues, financial losses, and the sale of various assets. The Chetrit Group's struggles include a lawsuit over inflated loan values and allegations of tenant harassment, leading to foreclosure on multiple properties. The broader Chetrit Organization is similarly affected, relinquishing various holdings amidst ongoing financial turmoil.
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Altana AI is relocating its operations from a 20,000-square-foot office in Williamsburg to a new headquarters occupying approximately 62,300 square feet on the 21st floor of Penn 2, a Vornado Realty Trust office tower in Manhattan. This move marks a significant expansion, as the new space is more than triple the size of its previous location. The lease spans 10 years, although the asking rent has not been disclosed; however, prevailing office rents in the tower range from $78 to $96 per square foot. Veeva, a cloud computing software firm, has also signed a 12-year lease for around 62,200 square feet on the 11th floor. With these agreements, Penn 2 achieves 90% occupancy.
Recently, Vornado completed a $750 million renovation of the building, enhancing it with a triple-height lobby and outdoor spaces. According to Vornado’s executive vice president, the renovations transformed Penn 2 into a premier work environment. The tower now houses prominent companies such as Madison Square Garden Entertainment and Verizon. In a 2025 report, Vornado noted over 908,000 square feet leased at Penn 2 last year, averaging starting rents of $109 per square foot.
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The Manhattan office market is poised for its best leasing performance since 2000, largely driven by AI companies, which occupied 1 million square feet of office space in Q1 alone. This surge marks AI firms as 56% of tech leasing in Manhattan, a significant increase from 2024. While AI's contribution to the overall market remains small, major players like OpenAI and Anthropic are reshaping neighborhoods like SoHo and Hudson Square. Unlike the dot-com era, today's AI firms often have substantial revenue, prompting landlords to scrutinize their business plans more closely. Notably, some small AI startups are rapidly expanding their footprints, aiming for longer leases in Manhattan's tech-centric areas. However, uncertainty looms over AI's potential to impact headcount and office demand negatively, as indicated by a CoStar survey suggesting 35% anticipate adverse effects.
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The Durst Organization has made available up to 600,000 square feet at 114 West 47th St., one of Midtown's largest blocks of Class A office space. This new 26-story building, located off Sixth Avenue, is designed for large enterprises, offering the potential for a single tenant to occupy the entire space. Collaborating with HOK, Durst is reimagining the lobby and amenity areas, enhancing the building's prominence with a new canopy and naming rights for significant tenants.
Jody Durst notes that 114 West 47th St. provides an exceptional opportunity for companies seeking prime Midtown locations. The building boasts extensive floor plates, a newly designed lobby with luxurious finishes, ample natural light with high ceilings, seven private terraces, upgraded elevators and chillers, and a LEED Gold certification for sustainability. Leasing is being managed by a team from Durst further emphasizing the competitive allure of this property in a transit-rich area.
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On June 18, developer Charles Cohen faces two legal battles. Cohen, a significant player in Midtown’s commercial real estate market, holds over 10 million square feet of properties, heavily impacted by post-pandemic challenges, leading to loan defaults and shrinking holdings. A crucial hearing involves his property at 222 E. 59th St., where he allegedly defaulted on over $500,000 in ground rent to landowner Eve Hart Rice, who threatens to seize the 30,000-square-foot building, currently 40% vacant. The second court date involves a dispute with Fortress Investment Group, which claims Cohen defaulted on over $500 million in loans and is owed nearly $200 million personally guaranteed by him, with a June 19 deadline for repayment.
Cohen's recent sale of land for $110 million to Empire State Realty Trust and additional properties to Vornado Realty Trust aims to address his debts. However, legal tensions persist, including Cohen's lawsuit against Hart Rice for reneging on a ground rent agreement—a claim she disputed. Additionally, foreclosure efforts by LNR on the property spotlight its devalued state, appraised at $5.3 million, less than the outstanding mortgage debt.
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David Werner secured a $250 million loan from JPMorgan to finance his acquisition of One Dag Hammarskjöld Plaza, a 50-story office tower purchased for $270 million from Rockpoint Group. This purchase price reflects about half of what Rockpoint paid in 2019. The 870,000-square-foot building, currently with nearly 30% vacancy, will see an additional $60 million invested for upgrades and leasing, raising the total capitalization to over $330 million. The deal is significant as banks, including JPMorgan, are re-entering commercial real estate lending.
The building, located at 885 Second Avenue near the United Nations, is home to notable tenants like Memorial Sloan Kettering and the Republic of Germany. Rockpoint acquired One Dag for $566 million in 2019, financed through a $430 million loan from Wells Fargo and Brookfield. Werner has a history of acquiring properties at substantial discounts; for instance, he bought 440 Ninth Avenue for just over $100 million last year, down from its previous sale of $269 million seven years prior.
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Savanna, a prominent player in the New York City office market, is in contract to sell two properties near Madison Square Park for $125 million to Kaufman Investments, as reported by the Commercial Observer. The properties, located at 24-28 West 25th Street and 48 West 25th Street, were acquired by Savanna for $197 million between 2018 and 2019. The transaction is expected to close soon, with Rialto Capital providing financing. None of the parties involved have commented on the deal. Kaufman's acquisition may lead to further opportunities, following their earlier purchase of 40 West 25th Street for $52 million. Recently, Savanna was also active in selling a Midtown office building to Olmstead Properties for $108 million, significantly less than its previous acquisition price of $195 million. Despite facing financial difficulties, Savanna continues to expand its portfolio, recently acquiring a leasehold on a property at 444 Madison Avenue for $50 million.
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The Korein family faces a setback in their dispute with Vornado over the valuation of the 1 Penn Plaza skyscraper after a Manhattan judge dismissed their lawsuit seeking a fair property assessment. The judge, Lyle Frank, emphasized that any disagreement with the initial appraisal must be resolved according to their ground lease terms, as the court cannot determine fair market value. The Koreins argue that they struggled to find an impartial appraiser due to Vornado's influence, claiming that many brokers feared retaliation and declined to represent them. With the renewal of the ground lease increasing the annual rent based on fair market value, the Koreins allege that industry brokers, such as Darcy Stacom and Bob Knakal, refused to assist them due to Vornado's dominance in the Manhattan market. Despite this ruling, the Koreins continue to pursue another case regarding the ground lease itself.
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Gary Barnett’s recent acquisitions in Midtown align with Extell's typical strategy of discreetly gathering strategic properties and securing development rights, leaving the future plans unclear. Recent transactions indicate a focused vision for a Park Avenue assemblage, notably highlighted by Extell's $500 million purchase of the central development site at 405-417 Park Avenue. This was complemented by the acquisition of $20 million in air rights from Central Synagogue, enhancing the project’s potential from 527,000 to 700,000 square feet of office space.
Following this, Extell acquired the former Friars Club for $19 million, leading to speculation about further expansion, possibly involving 111 East 54th Street. Despite industry chatter about relocating the Brook club, sources suggest no such plans exist. Additionally, Barnett purchased the American Jewish Congress building, likely strategizing for tenant relocation. The intrigue intensified with a foreclosure on 110 East 55th Street, linked to construction firm JT Magen, which has previously collaborated with Extell. While Barnett remains reticent about his intentions, Extell President Andrew Chung has hinted at ambitious, comprehensive plans encompassing the future.
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Global Holdings has completed a $30 million repositioning of 99 Park Ave., a 600,000 s/f Class A office tower near Grand Central Terminal. The redesign, crafted with Vocon, enhances the building's Art Deco heritage and introduces a hospitality-driven workplace design. Currently 97% leased, notable tenants include Cerity Partners and Southern Land Co. COO Chris Roth emphasized the blend of design and functionality, creating a dynamic tenant experience.
The transformation features a striking double-height storefront, enhancing transparency and light, and a refined interior with warm materials. Below Park, a new amenity center, includes a speakeasy-style bar, boardroom, and golf simulator, catering to diverse tenant needs. This project reflects Global Holdings’ commitment to design excellence and tenant satisfaction, fostering an engaging and productive environment, while affirming 99 Park Ave.’s competitive edge in Midtown’s Class A market. Global has owned the property since 1991.
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WeWork's journey took a downward turn after its initial success, highlighted during its high-profile introduction by Forbes in 2017. The company expanded rapidly, becoming New York's second-largest commercial tenant with over 6 million square feet leased. However, its financial missteps led to bankruptcy in 2023, allowing it to renegotiate leases and shrink its footprint to 3 million square feet across 35 buildings. Property owners, seeking to avoid prolonged vacancies, struck deals with WeWork, significantly lowering rents, such as at 450-460 Park Ave. South.
This case reflects broader trends in New York’s office market, where Class B properties face challenges amidst high demand for premier spaces. Average rents in top-tier buildings reached $151 per square foot, while non-premier spaces lagged at $78. Despite this, demand for office space is increasing, particularly for more affordable options, suggesting a potential recovery for less desirable properties as tenants reconsider their choices in the shifting market landscape.
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Manhattan's rental market hit a record high in May, with median rents for market-rate residential buildings reaching $5,125 per month—a 1% increase from April and a 7% rise year-over-year. CEO Gary Malin from The Corcoran Group noted the persistent demand surpassing limited supply is frustrating tenants. Record prices were noted, particularly for studio and one-bedroom apartments. The non-doorman category recorded median and average rents at $4,496 and $5,710, respectively, while doorman median rent was $5,333.
The month saw a decline in lease signings, with 4,655 leases, marking a 2% drop from April and a 6% decrease year-over-year, attributed to supply constraints rather than reduced demand. Active listings dropped 21%, a trend persisting for four consecutive months. Meanwhile, Brooklyn's rental market also saw record pricing with a median rent of $4,347, reflecting a 6% increase, and a modest 5% annual decrease in active listings to 4,283.
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Willets Point in northern Queens, despite its current industrial state. Investors are projected to invest over $9B in three significant projects in the area, yet developers remain cautious, even as property values rise. Baker noted the importance of a private development initiating a presence in the area. Recently, Related Cos. and Sterling Equities launched the first 880 of 2,500 planned affordable apartments, complementing an $800M soccer stadium for the New York City Football Club set to open next summer.
The largest project, an $8B casino-centered entertainment venue from Steve Cohen and Hard Rock International, is set to begin construction. Queens Borough President Donovan Richards emphasized the land's opportunity due to its vast undeveloped areas. A PropertyScout analysis shows a 51% increase in land prices near the Willets Point subway stop from 2021 to 2025. The Fodera family is selling a 138K SF site for potential development, soliciting bids over $60M, following long discussions about the timing for sale.
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Meliá Hotels International has acquired the 21-story property at 132-142 West 27th Street in New York City for $203 million, reported by the Commercial Observer. The hotel, operating as Innside by Meliá New York NoMad, was previously owned by Artimus Construction and sold for $649,000 per key. Artimus had purchased the vacant lot in 2013 for $35 million, completing the hotel with Peter Poon Architects in 2016. Despite the expected hospitality boost from the World Cup, investments in the hotel sector continue, as shown by Omni Lifestyle Living's recent acquisition of the Fairfield Inn & Suites Manhattan/Fifth Avenue for $39.9 million.
Meliá, a major Spanish hotel chain, operates over 380 properties globally, while Artimus is well-known in New York. Recently, Artimus enlisted Nest Seekers to help sell the remaining units at 285 West 110th Street and secured $210 million in financing for a nearly 500-unit project at 1440 Amsterdam Avenue in West Harlem. Additionally, Artimus obtained $90 million to develop a 188-unit building at 164 4th Avenue in Brooklyn in collaboration with the Wiczyk family’s Heron Real Estate.
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A Midtown hotel has been sold for nearly $40 million, with Ohio-based Big Apple W 37th, linked to Spark Hotels, acquiring the 92-key inn at 21 W. 37th St. for $39.9 million. Bhavesh Lad, managing principal at Spark, signed for the buyer, marking Spark's first expansion outside the Midwest. The firm manages over $50 million in assets, focusing on hotel properties in Ohio and Michigan. The seller is a Chinatown-related entity associated with Lam Generation, led by Jeffrey Lam, who purchased the hotel in 2007. The 17-story hotel, operating as a Fairfield by Marriott Inn & Suites, is located near Penn Station and Grand Central, with rates around $300 per night during peak summer. It's unknown if Spark will modify the hotel's operations. This sale follows the recent acquisition of Innside New York NoMad by Melia Hotels for $203 million, highlighting ongoing investment activity in the local hospitality market.
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