Weekly Market Report - March 17, 2026
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- 8 min read
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2.9m SF office project expected to cost $6.5B
RXR is recruiting at One Vanderbilt on Wednesday for its 175 Park Avenue project, replacing the Grand Hyatt Hotel near Grand Central Terminal. JPMorgan has invited institutional investors to discuss financing the development, estimated at $6.5 billion. The developers have applied for $4.8 billion in federal loans from programs designed for transit infrastructure, which could provide low-cost financing with extended payback periods. While around $30 billion in unused funds was available, the developers have yet to secure the loan.
The ambitious project, at 83 stories and 2.9 million square feet, surpasses the scope of the 46-story, 1-million-square-foot development at 343 Madison Avenue by BXP. RXR and TF Cornerstone hope to attract an anchor tenant to strengthen their financing position, but no commitments have been made, despite a pressing need for a tenant willing to lease at least 500,000 square feet. The leasing gallery for the project opened in October 2023, promising 2.5 million square feet of office space, a 200-room Hyatt hotel, and 10,000 square feet of retail space. Both RXR and JPMorgan have not commented on the meeting.
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Two AI firms, Harvey AI and Clay, have leased office spaces at SL Green's towers in Midtown South, achieving 100% occupancy. Harvey AI expanded its lease at One Madison Ave. to 185K SF, while Clay signed for 163K SF at 11 Madison Ave. The demand from tech companies has significantly impacted the Midtown South area, with SL Green's executive vice president, Steven Durels, noting tight availability in the submarket.
Previously, One Madison Ave. was only 64% leased, contrasting with the current positive trend as availability rates dropped from 18.6% to 13.3%. SL Green anticipates signing 900K SF of leases this quarter, marking a notable rebound from previous years when tech tenants were hesitant. According to SL Green's CEO, Marc Holliday, the strong leasing activity reflects a robust future for tech and AI growth in New York City. JLL and Newmark represented the parties involved in the transactions, aiding the successful deals in the revitalized market.
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A New York state Supreme Court judge appointed an executive from Fortress Investment Group, David Moson, as receiver to manage Charles Cohen’s real estate assets and mandated Cohen to settle his debts to Fortress within 45 days. After defaulting on over $500 million, Cohen was instructed to repay $187 million in loans guaranteed personally. He previously relieved some financial pressure by selling properties at 623 Fifth Ave. and 3 E. 54th St. to Vornado Realty Trust, yet still owes $135 million. Cohen, possessing 12 million square feet of commercial space, is attempting to sell a 1 million-square-foot tower at 622 Third Ave. valued at $700 million but encumbered with $400 million in debt. Fortress accused Cohen of deliberately delaying property sales and improperly transferring assets to his wife. The judge's order requires Cohen to provide financial and operational details about his properties to Moson and keep him updated on any sale activities. Fortress has refrained from commenting, and Cohen's attorney did not respond to inquiries.
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Deutsche Bank led balance sheet financing for UES luxury property
The Alexico Group's Mark Hotel on the Upper East Side has undergone another refinancing, with Deutsche Bank leading a $345 million financing package, joined by J.P. Morgan Chase and BDT & MSD Partners. Negotiated by a Walker & Dunlop team, details on the deal remain unreported by the involved parties. In 2024, Alexico refinanced the luxury hotel again, with a $335 million loan consisting mainly of a $300 million commercial mortgage-backed securities loan from Goldman Sachs, supplemented by mezzanine financing. Alexico previously refinanced the 153-key hotel in 2022, which helped avert foreclosure attempts by Ohana Real Estate Investors due to missed payments.
Earlier refinancing included $230 million from JPMorgan Chase in 2017, totaling $265 million to replace a previous loan. The five-star property offers around 150 rooms, with high-priced accommodations, and is closely situated to the Metropolitan Museum of Art. Last year, there was a $1 billion purchase offer for the hotel, which might have influenced the market. In a separate transaction, Generation Essentials Group acquired the 151-key Tribeca Hilton Garden Inn for $69 million, intending to transform it into an “Art Newspaper House.”
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Point72 Asset Management adds to Hudson Yards footprint with 60K sf
New York Mets owner Steve Cohen's Point72 Asset Management has signed a lease for 60,000 square feet at Tishman Spiral’s Spiral in Hudson Yards, occupying the entire 31st floor and part of the 21st floor, achieving 98 percent lease occupancy. The lease, starting at $130 per square foot, was finalized late last year and not previously reported Samantha Augarten and Sam Brodsky represented the landlord. Point72 already leases over 175,000 square feet at 55 Hudson Yards, having relocated from Madison Avenue a decade ago. The Spiral building, with a total area of 2.8 million square feet, opened in 2023 and houses notable tenants like HSBC and Pfizer. Additionally, Cohen is planning an $8 billion casino complex near Citi Field, featuring gaming space, a hotel, a live music venue, and affordable housing developments.
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Private equity giant inks 10-year, 150K sf deal at SL Green’s 245 Park
Carlyle Group has expanded its Midtown footprint by signing leases for over 200,000 square feet in two Park Avenue towers. This includes a significant 150,000-square-foot lease at SL Green Realty’s 245 Park Avenue and an additional 52,000-square-foot lease at Irvine Company’s 200 Park Avenue, sharing the fourth floor with MetLife, which renewed 400,000 square feet in the same building. The deals reflect growth rather than relocation, as Carlyle retains its 195,000-square-foot space at One Vanderbilt. Asking rents at 245 Park Avenue were about $175 per square foot, while the MetLife Building commanded closer to $100 per square foot, highlighting the price disparity between older and newer properties. Leasing activity is on the rise for SL Green, which recently signed deals with law firm McDermott Will & Emery and investment advisory firm Cliffwater. SL Green acquired 245 Park Avenue out of bankruptcy in 2022 and sold 50% equity in 2023 to Mori Trust.
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French restaurant Daniel has 20-year lease with new owner SL Green
Daniel Boulud has sold the restaurant space on East 65th Street but retains Restaurant Daniel through a 20-year lease with the new owner, SL Green. The commercial condo at 610 Park Avenue, referred to as the Mayfair, was purchased by SL Green for $18.5 million. The reasons for the sale remain unclear, as Dinex Group's spokesperson declined to comment, though it is speculated that the sale may provide cash for expansion. Dinex Group's CEO, Sebastien Silvestri, expressed contentment with securing Restaurant Daniel's future, allowing the company to refocus on its core business.
Boulud purchased the space in 1998, previously moving from East 76th Street, and had viewed the real estate purchase as vital to the restaurant's longevity and his retirement strategy. Despite his 2013 comments about retirement, 70-year-old Boulud seems active, planning a new location in Hong Kong and a brasserie on the Upper West Side. His collaboration with SL Green continues, including past ventures and future projects. SL Green’s executive vice president noted pride in owning the space housing Restaurant Daniel, recognizing its standing in the culinary world.
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Midtown deal marks third NYC deal since emerging from bankruptcy
WeWork is expanding in New York City with a 37,000-square-foot lease at 511 Fifth Avenue, set to open late this year. The new location will occupy the ninth to eleventh floors and part of the 15th, featuring headquarters suites, private offices, full-floor offices, and traditional coworking spaces. Additionally, WeWork will partner with the landlord to create a 9,000-square-foot coworking lounge on the 15th floor for all building tenants. This lease is WeWork's 36th site in the city and marks its third since emerging from bankruptcy. Following a major renovation of the property, the move aligns with WeWork's strategy to adapt to evolving real estate utilization and focus on high-demand areas.
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Acore Capital provides loan for Times Square building after previous CMBS default
Jeff Sutton's Wharton Properties has secured a $176 million refinancing for the prominent Midtown retail property at 1551 Broadway in Times Square. Acore Capital provided a three-year, floating-rate loan for the location, which features American Eagle’s flagship store. This refinancing follows a previous extension on a $180 million CMBS loan that Sutton paid off in February 2023. The deal was brokered by a Newmark team consisting of Anthony Orso, Clifford Welden, and Henry Stimler.
The new loan replaces a CMBS loan that Citigroup originated in 2011, which matured in July 2021 and led to Sutton entering into forbearance as he sought to refinance. Sutton defaulted on the loan four months later, triggering a special servicing process, despite efforts to negotiate with a special servicer amidst a foreclosure action filed by Deutsche Bank on behalf of CMBS bondholders. Wharton acquired both 1551 and 1555 Broadway in a joint venture with SL Green in 2005 for $82.5 million, transforming the site from the former Howard Johnson’s hotel into a retail space that opened in 2009.
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Le Colonial, an upscale French-Vietnamese restaurant, is returning to New York City after closing its Midtown East location in December 2019. The new venue will open in summer 2027 at 50 W. 57th St., occupying the 9,600-square-foot space previously held by Mangia. This marks the restaurant's eighth location nationwide, with seating for 215, an outdoor patio, full bar, lounge, and private dining options. Founded in 1993 by Rick Wahlstedt and Joe King in Manhattan, Le Colonial captures the essence of 1920s Saigon.
The lease spans 15 years with an asking rent of approximately $125 per square foot, facilitated by rental advisory Gary Trock. Trock emphasized that nearly three million square feet of new development nearby will enhance the market. The property, managed by Vornado Realty Trust and LeFrak, reflects a premier dining destination near five-star hotels and luxury brands. Vornado's Glen Weiss expressed enthusiasm for Le Colonial’s return, highlighting its significance to the 57th Street area.
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Developer JEMB Realty plans to install a 4-story digital billboard on its building at 1293 Broadway, the site of an H&M, aiming to transform Herald Square's appearance to match that of Times Square. The proposed 2,300-square-foot sign would wrap around the corner of the building where current windows exist. Approval from the Department of City Planning is required as zoning laws restrict sign sizes to 500 square feet and set height limits at 40 feet above the sidewalk. JEMB's billboard would stand 100 feet tall.
The zoning laws, established in 1982, are intended to enhance neighborhood livability and prohibit ad function for building signs. JEMB's principal claims that the regulations are inconsistently enforced, citing large signs nearby on Seventh Avenue and asserting that his sign would support the area’s commercial vitality. Built in 1902, the property has a history of various retail tenants. Recent leasing activity indicates a revival of the area, with notable neighbors including Macy’s flagship store.
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An office building near Grand Central Terminal is introducing a speakeasy called Highball Ltd., developed by East Village’s Please Don’t Tell (PDT) and Apres Cru Hospitality with Marx Realty. Set to open on March 13, it aims to offer a unique elevated space for celebrations and gatherings, enhancing the building's existing amenities. Tenants at 10 Grand Central already enjoy luxury cars for meetings and a theater with a 150-inch screen. Highball will occupy a 6,000-square-foot area within an 11,000-square-foot amenity suite on the 11th floor, featuring a kitchen and seating for 65. Access includes a hidden entrance and a freight elevator. The menu will offer various cocktails and food by Michelin-starred Chef Marc Forgione. This venture also aims to attract office workers from nearby regions, expanding PDT's customer base beyond New York residents.
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