Weekly Market Report - March 24, 2026
- 23 hours ago
- 10 min read
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Cooper Union has been seeking a buyer for landmark’s ground lease
Jeff Gural’s GFP Real Estate is negotiating to purchase the ground lease of the Chrysler Building from Cooper Union, which owns the land beneath the skyscraper. Sources indicate that discussions are advanced, with a deal expected soon, although finalization is pending. GFP and Cooper Union have not commented on the negotiations. Previously, Tishman Speyer was considered a leading contender for the acquisition, but that situation has changed. A key issue in talks is the rising ground rent, anticipated to reach $41 million in two years for the new owner.
Cooper Union began marketing the ground lease last spring after ending its lease with Aby Rosen’s RFR, which failed to pay rent, resulting in a $21 million arrears situation. RFR purchased the lease for $151 million in 2019 but later sued Cooper Union after its lease was terminated; the court ruled in favor of the school. Savills' David Heller called the building a prime opportunity for redevelopment, highlighting its prominence in the New York City skyline. GFP is also involved in converting the Flatiron Building into condos with Brodsky Organization and Sorgente Group.
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Bank of America is significantly expanding its presence at One Bryant Park in midtown Manhattan by securing a 20-year lease for the entire office area and additional retail space in the 51-story building. This triple-net agreement means Bank of America will handle property taxes, insurance, and maintenance costs. Already leasing about 1.8 million square feet through a joint venture with the Durst Organization, the bank's new deal will increase its occupancy to 2.4 million square feet of the total 2.44 million-square-foot tower, while retail tenants like Verizon and Starbucks will remain.
Bank of America plans to sublease some office space to current tenants. José Tavarez, the bank's NYC president, emphasized the importance of One Bryant Park for their global operations. As Bank of America continues to invest in the city's future, they are also developing a campus nearby. This expansion aligns with trends among other finance firms, such as JPMorgan and American Express, that are similarly committing to significant office spaces in New York.
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A group of Brooklyn office buildings owned by the Kushner family and RFR, known as Dumbo Heights, has been sent to special servicing for the second time due to rising vacancy rates and looming debt. After successfully emerging from a prior special servicing situation two years ago with a mortgage extension, the buildings face $480 million in mortgage and other debt maturing in six months. Vacancy rates have nearly doubled, currently at 28%, with net operating income dropping from almost $30 million in 2020 to $20 million last year.
The properties, including a building housing Etsy’s headquarters, feature extensive amenities but suffer from constant noise due to their proximity to the Brooklyn-Queens Expressway and subway lines. Despite previous modernization investments exceeding $120 million and WeWork’s involvement, the real estate partners defaulted on a $180 million mortgage in 2023. They secured a four-year loan extension in May 2024 but with performance decline, concerns remain high. The property is associated with RFR partners Aby Rosen, Michael Fuchs, and Seryl Kushner, while Jared Kushner is currently raising funds in the Middle East for his firm, Affinity Partners.
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SL Green Realty has entered a contract to sell its residential property at 7 Dey St., a 34-story rental tower near the World Trade Center, to newly formed GO Residential for $223 million. Completed in 2021, the mixed-use building spans 260,000 square feet and includes 209 residential units, ranging from studios to three bedrooms, with 63 units available at below-market rates for qualifying tenants. The transaction retains the office space on floors three to five for SL Green. The sale follows SL Green’s strategy to reduce its portfolio of properties valued at $2.5 billion to address a declining stock price, with the firm prompted by previous announcements in December.
The residential units at 7 Dey are currently 99% leased, with market-rate studios starting at $4,500. Retail tenants include a T-Mobile store and a Wells Fargo branch. GO Residential, led by CEO Josh Gotlib and chairman Meyer Orbach, aims to attract Canadian investors to luxury city apartments and currently owns over 3,000 city apartments. Harrison Sitomer, SL Green’s president, stated that the transaction reflects a strategy to leverage selected assets and unlock their value. SL Green's stock closed at about $37 per share, significantly lower than its 2024 high of $81.
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The Wolfson family, a prominent landlord in Lower Manhattan, is experiencing significant financial challenges due to low demand for office space. With nearly 60 years in real estate, Zev Wolfson, the patriarch, developed key properties including 1 State Street Plaza and 25 Broadway. Currently, 1 State Street Plaza faces a vacancy rate that has surged to 26%, prompting S&P Global to downgrade its credit rating from A to BBB+. S&P voiced concerns about the Wolfsons' ability to refinance the property’s $360 million mortgage by its December 2027 maturity if performance does not improve. Refinance rates could reach 7%, surpassing their current 4.5%.
Meanwhile, occupancy at 25 Broadway is stable at around 90%, but has struggled with cash flow, primarily due to Léman Manhattan Preparatory School's two-year rent strike. The building is under special servicing and cannot receive further mortgage extensions past January 2027. Although some office towers in Lower Manhattan have rebounded post-pandemic, most of the Financial District continues to struggle with a 27% vacancy rate, well above Manhattan’s average, as tenant net absorption remains negative.
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Landlords leased more space last year to service-oriented tenants than those selling products, with wellness and fitness leading the charge
In recent years, American shopping habits have shifted significantly towards service-based retail, with services like Botox and fitness classes now more popular than traditional goods. In 2025, service tenants occupied over 50% of retail space, a marked increase from 40% fifteen years prior. The growth in salons, spas, and fitness studios reflects a broader trend where consumer spending is increasingly focused on services, with a $2.1 trillion wellness market projected for 2024. Despite some weakening in bars and restaurants due to consumer spending cuts, demand for wellness-related services remains strong. For instance, Brixmor has successfully transformed a vacant liquor store into four service-oriented shops, achieving 20% higher rent.
The fitness sector has surged, making up nearly 30% of service leases last year. In urban areas like Manhattan’s Flatiron and NoMad, self-care brands have expanded rapidly, illustrating the increased emphasis on health and appearance, fueled by social media. Rumble boxing co-founder Noah Neiman highlights the trend of fitness studios becoming social hubs post-pandemic. Meanwhile, Planet Fitness continues to grow, attracting families and groups and benefiting from rising health consciousness linked to medications like Ozempic. Although e-commerce is decreasing the need for physical retail space, vacancy rates remain low due to strong demand from service-based businesses.
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An auto body shop on Atlantic Avenue in Brooklyn is set to be replaced by a 15-story residential building following a rezoning by the City Council. Barry Wagschal, through Wagstone Capital, plans a 23,800-square-foot development with 36 units at 858 Atlantic Ave. The current 2,700-square-foot site, occupied by a garage, will undergo transformation as part of the Atlantic Avenue Mixed-Use Plan, which permits high-density residential buildings in an area previously designated for light manufacturing. This plan aims to create about 4,600 new homes across 21 blocks in Prospect Heights, Crown Heights, and Bedford-Stuyvesant. The new building will also include retail space, bike storage, and rooftop recreation. No demolition permits have been filed yet.
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The ground-floor retail space at a Greenwich Village condo building has been sold for $23 million. Long Island's Philips International sold the unit at 126 Waverly Place to 360 6th Avenue Owner, according to a deed registered in the city. Philip Pilevsky, the seller's chairman and CEO, signed the document, while Steven Carter from DLJ Real Estate Capital Partners represented the buyer, clarifying that he purchased the unit with a group including Global Gate.
The 11,500-square-foot commercial unit houses tenants like Wells Fargo, CVS, a veterinary clinic, and a coffee shop, representing about 20% of the five-story property. The site, formerly a parking lot, was transformed into the condo building in the late 1980s, a move that faced local controversy, according to Village Preservation. Neither Philips International nor Schwartz Sladkus Reich Greenberg Atlas, the buyer's legal representatives, provided comments by the time of reporting.
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UMI, an upscale Japanese restaurant in Atlanta favored by Hollywood A-listers, will open its second location in fall at 63 Madison Ave in NoMad, occupying a 4,000-square-foot space. The restaurant will include a main dining room, sushi bar, private dining room, and omakase room, with a menu still being finalized but set to include signature dishes from Atlanta, like avocado salad with wasabi vinaigrette and Wagyu Carpaccio. Launched in 2012 by Charlie Hendon and Farshid Arshid, UMI has attracted celebrities such as Samuel L. Jackson, Robert Downey Jr., and Jennifer Lawrence, earning features in prominent publications. Their 10-year lease on Madison Avenue includes an option for a 10-year extension. UMI will join notable tenants like Whole Foods and American Eagle, with Arshid expressing excitement about establishing roots in New York's vibrant creative scene.
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Meta has signed a 10-year lease for its Fifth Avenue retail space, transforming a pop-up store into a permanent location. The Meta Lab occupies a 15,000-square-foot, five-level townhouse at 697 Fifth Ave., near the St. Regis Hotel. This location is part of an experiential retail concept where customers can try Meta's AI-powered glasses and virtual reality headsets. Following the launch of the first Meta Lab in Los Angeles, the Fifth Avenue pop-up opened in December, along with another in Honolulu. Glen Weiss from Vornado highlighted Fifth Avenue's status as a prime retail destination. Meta Lab seeks to redefine traditional shopping by celebrating community, culture, and creativity. A Meta representative did not comment on the rent or brokers involved. Meta also leases 730,000 square feet at The Farley Building for its NYC headquarters.
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Tokyo-based luggage maker Yoshida & Co. has acquired a Williamsburg retail site at 103 N. Fourth St. for $33.5 million, roughly $5,400 per square foot. The property, a renovated former industrial building, was sold by Jeff Sutton's Wharton Properties and was previously home to Golden Flow Dairy Farms. The transaction closed on March 16, following a contract established on January 30 after three months of marketing. Sutton, who bought the building in 2019 for $20 million, had extensively renovated it and added a Bank of America branch as its sole tenant, which still has 11 years left on its lease.
Yoshida, known for its Porter-Yoshida line sold primarily in Manhattan, currently has no standalone stores outside Japan, and it's unclear if the Williamsburg property will be its first. With nearby commercial developments indicating a bustling environment, Yoshida may be positioning for future growth in the area. Japanese investments in New York real estate have surged post-pandemic, aided by firms like Efficiency Capital Advisors.
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Ralph Bartel, associated with Azzurro Capital, sold an empty lot at 144 Spring St. in SoHo for $14 million, significantly lower than the $24.7 million he paid in 2012. The buyer, City Urban Realty, specializes in multifamily and commercial projects. The lot, previously a parking area hosting a weekend flea market, represented over a 40% loss for Bartel, with the sale price surpassing $15,000 per square foot at its peak. Bartel, who co-founded Travelzoo and previously owned the French fashion house Lanvin, had plans for a 52-foot-tall glass retail building on the property, approved by the Landmarks Preservation Commission in 2014, but faced setbacks with the Department of Buildings, which rejected his foundation permit application in 2017.
The reasoning behind this rejection remains unclear. It is uncertain whether City Urban Realty plans to develop a similar structure. Historically, the lot was not always vacant; a tax photo from 1941 shows a mixed-use building, while a 1983 photo indicates it had been converted to a parking lot. Efforts to reach Travelzoo and City Urban Realty for comments were unsuccessful.
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SL Green's 1 Madison Ave. is fully leased, prompting its owners to distribute a $308 million dividend through a new five-year $1.7 billion mortgage. The 27-story, 1.4 million-square-foot property was redeveloped after a $2.3 billion investment by SL Green, Hines, the National Pension Service of Korea, and Mastern Investment Management in 2020, which included adding 18 floors and upgrading the building by 2023. Originally acquired by SL Green in 2005, the building's new anchor tenants, including Franklin Templeton and Coinbase, pay over $130 per square foot. The refinancing is set to price Friday, following the leasing of its last space to Harvey AI.
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Michael Nierenberg’s company offers stake in 1301 Sixth after buying Paramount REIT in December
Rithm Capital is seeking a joint venture partner for the 1.75 million-square-foot office tower located at 1301 Sixth Avenue, acquired last year for $1.6 billion from Paramount Group, which it purchased for $4.9 billion. The proposed valuation for the office tower is $1.4 billion. Rithm initially aimed to attract a partner during its acquisition but was unsuccessful. Now, it is presenting 1301 Sixth for joint venture opportunities, highlighting it as a prime asset with significant cash flow potential, boasting 98% occupancy and projected rent of $1.2 billion over the next decade. The marketing efforts are being led by Newmark, under Adam Spies and Adam Doneger.
Current tenants include Piper Sandler, Credit Agricole, and O’Melveny & Myers. Paramount Group has enhanced the property with upgrades, such as a renovated lobby and improved elevator system, and has also built an amenity center known as Paramount Club. Additionally, last year, Paramount secured a $900 million CMBS refinancing with a favorable fixed rate for the property. Rithm's acquisition of Paramount followed a competitive bidding process and came amidst an SEC investigation into the company. Rithm Capital is led by CEO Michael Nierenberg.
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This is the largest of three new leases totaling 7,500 square feet at the Gowanus building
Focal Point Beer Company will open its second location in a 5,000 square foot space at 420 Carroll Street, a luxury building in the Gowanus neighborhood, as announced by the Domain Companies. This new venue will have a taproom, a full-service restaurant, and a spacious outdoor area overlooking the Gowanus Canal. Brooklyn Builders Studio, a design hub focused on family-oriented experiences with architecture, will also occupy a 1,700 square-foot area in the building, aiming to foster creativity and problem-solving in design. Additionally, BYOB Naturale Wine & Spirits will lease 800 square feet, specializing in natural Italian wines and artisanal spirits.
While lease lengths and rental rates are unclear, a nearby report indicated average retail rents in Prospect Heights reached $105 per square foot in 2025. Igloo co-founder Adam Joly emphasized the importance of these retail activations in establishing a vibrant community. 420 Carroll Street is the first project developed under a 2021 rezoning initiative aimed at promoting residential growth in Gowanus. Other tenants include Gowanus Marketplace, The Shop, and Hey Clay.
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