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Weekly Market Report - May 13, 2025

  • Writer: Broker Support
    Broker Support
  • May 16
  • 8 min read

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1.1M sf deal is largest new lease since 2019


NYU has secured a 1.1 million-square-foot masterlease at Vornado Realty Trust's Greenwich Village office building. The university made an upfront rent payment of $935 million and will make annual payments of about $9.3 million during the 70-year lease term. This is the largest new lease since 2019, when WarnerMedia bought 1.5 million square feet in Related Companies and Oxford Properties Group's 30 Hudson Yards. NYU has an option to purchase the office portion of the building in 2055 and at the end of the lease. Existing office tenants occupy about half of the building, with Meta downsizing its office space after its lease expired. Vornado will keep the 92,000-square-foot retail condominium currently occupied by Wegmans. The completion of the lease brings the company's office occupancy to 87.4%. NYU owns over 14 million square feet of space in the city, with plans to convert vacant floors into laboratories, classrooms, and workstations.


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Mapping the players in Trump’s Palm Beach orbit, Ohad Fisherman gets a trial date, former Meridian brokers go after their old firm and more national news from this week.


Manhattan's office market is experiencing a recovery, with 3.38 million square feet of office space leased in April, up 23% year-over-year, and pushing 2025 toward the best leasing year since 2000. The recovery is driven by tightening availability and heavyweight tenants making big bets. Amazon led the charge with a 330,000-square-foot lease at 10 Bryant Park and an acquisition of 522 Fifth Avenue, part of its broader real estate push. Other major moves included Goodwin Procter's 250,000-square-foot lease at 200 Fifth Avenue and Apollo Global Management taking 100,000 square feet at 590 Madison Avenue.


Deloitte made the biggest splash by locking down 800,000 square feet at 70 Hudson Yards. First quarter leasing hit 12.2 million square feet, the strongest period since 2019. Several forces are fueling the rebound, including return-to-office momentum, demand for high-end space, and capital confidence returning to the sector. However, uncertainty remains, with Trump's tariffs and office performance still uneven nationally.


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Brookfield Asset Management raised $5.9 billion in the first quarter, lifting the fund’s total to $16 billion


Brookfield Asset Management raised nearly $6 billion for its new real-estate fund in the first quarter, signaling growing investor appetite for distressed commercial property. The firm is taking advantage of the sharp drop in property prices by buying foreclosed properties and relatively healthy ones where sellers want to cash out. The fund has invested about a quarter of its money, mostly in apartment buildings and warehouses, at prices well below replacement cost.


The total amount raised for its latest global opportunistic vehicle is $16 billion, the largest real-estate fund that Brookfield ever raised. The firm's $5.9 billion fundraising in the first quarter brings the total amount raised for its latest global opportunistic vehicle to $16 billion, the largest real-estate fund that Brookfield ever raised. Brookfield is hoping to raise another $2 billion before its final close, according to people familiar with the matter. The firm's investment decisions will take into account the economic upheaval resulting from the Trump administration's tariff efforts and growing concerns about a possible recession.


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BlackRock is urging managing directors to return to the office five days a week, joining other big companies in recognizing the need to end the era of remote work. The company, which manages $10.5 trillion in client assets and employs around 4,000 New Yorkers, has nearly 23,000 workers worldwide and around 1,000 managing directors. The move comes after a survey from the Partnership for New York City showed that return-to-office rates have barely changed since 2022, with 57% of Manhattan workers back on the average workday.


Employers have planned to impose stricter office-attendance requirements this year, but it has been difficult to enforce these edicts. JPMorgan and Amazon have also ordered managing directors to work from the office full-time, while most banks allow junior staffers to work remotely at least once a week. BlackRock is a major New York real estate investor through its mutual funds and other vehicles, controlling 17% of shares in SL Green, 12% of BXP, and 11% of Vornado Realty Trust.


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Vornado Realty Trust predicts its office towers will be as crowded as before the pandemic in "a couple of years," despite having more vacant space than at any time since Covid-19. The occupancy rate in the developer's New York office portfolio dipped to 84% in the first quarter, a four percentage-point decline from 2024. The decline is temporary and stems from the redevelopment of Penn 2, a 1.8 million square-foot tower that cost $750 million to redevelop. Universal Music Group recently agreed to lease over 300,000 square feet in the building, and officials are confident that demand for Midtown office space will grow. The firm also leased a 1 million square-foot building at 770 Broadway to New York University for 70 years, which would have had an occupancy rate of 87% if included in first-quarter figures. Investors are optimistic about the company's future, as return-to-office rates in Manhattan have barely budged since 2022.


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Park Hotels & Resorts CEO Thomas Baltimore has expressed uncertainty about the profitability of the New York Hilton Midtown, one of the city's largest hotels, due to a decline in overseas guests. The hotel's occupancy rate fell from 75% a year ago to 71% in the first quarter, and revenue per available room decreased by 0.3% to $190. The Hilton Midtown is the site of a UnitedHealth executive assassination in December. Despite a slight falloff in Canadian guests, April revenue per available room was 17% ahead of the prior-year period, partly due to the late Easter holiday. Baltimore remains cautiously optimistic about the New York market due to the strong U.S. economy.


Trade-war tensions have caused booking windows to narrow significantly, and management warns 2025 is looking worse than predicted three months ago. Park Hotels owns 37 convention-center and resort hotels across the country, holding 22,000 rooms. The average hotel occupancy rate is 85%, the highest in the country, and nearly 47,000 New Yorkers work in accommodation. Park Hotels expects results this year to range from $8 million net loss to $52 million in net earnings, down from its February projection of $87 million to $147 million in net income. Operating profit margins are expected to be between 9.5% and 11.5%.


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RFR Holding has sold 522 Fifth Ave., a property in foreclosure proceedings, to Amazon, who is the buyer. The 23-story, 600,000-square-foot building is expected to be occupied by Amazon. The property is five blocks north of the former Lord & Taylor building at 424 Fifth Ave., which Amazon acquired for $1 billion in 2020 to use as its New York headquarters. Last month, Amazon agreed to lease 330,000 square feet at 452 Fifth Ave., a building that used to house HSBC. The sale is a coup for RFR, as lenders filed to foreclose on the building last June after the developer failed to pay off the vacant property's $224 million mortgage at maturity. RFR acquired the office portion of the building in September 2020 from Morgan Stanley for $350 million and a year later bought the retail space. The foreclosure proceeding has been discontinued.


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Brookfield selling 200 Lafayette Street, home to Eataly and Moncler


Meadow Partners has agreed to buy a Soho retail and office property for $40 million. The company is in contract to buy 200 Lafayette Street from Brookfield. The property, located at the corner of Lafayette and Broome Street, is home to Eataly on the ground and basement retail floors and Moncler on the second floor. Andreessen Horowitz leases more office space on the floors above, which are separate office condos owned by LaSalle Investment Management. Soho has seen a recent increase in big-ticket investment sales, with Blackstone buying a $200 million portfolio of retail and office properties in the neighborhood last year. Other notable buyers include Spanish billionaire Isak Andic, Japanese investor $47 million, and Ralph Lauren's Soho retail store at 109 Prince Street.


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One proposed pot shop is suing the North Fork town


North Fork's Riverhead is facing a series of disputes and controversies surrounding potential cannabis retailers. Tink & E. Co filed a lawsuit against the town after the zoning board of appeals rejected a variance at 1201 Ostrander Avenue, where it planned to open a cannabis shop. The former bank base is zoned for retail use but isn't accessible from Old Country Road, violating a town rule that cannabis shops must front a main road if they are within 1,000 feet of homes.


Two other potential cannabis retailers filed affidavits in the case, highlighting how the lawsuit may ripple across the town's burgeoning marijuana industry. The town doesn't allow dispensaries to open within 2,500 feet of one another, leaving applicants jockeying to get in the door before being squeezed out of space. An attorney for one dispensary applicant expressed frustration that local zoning codes and state statutes don't seem to mix, and another client, Brian Stark, is still being forced to obtain a variance due to concerns about students walking by.


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Steve Roth talks future of Penn 15


Vornado Realty Trust is in favor of the federal government taking over Penn Station's revamp, as CEO Steve Roth highlighted the neighborhood's changes and the progress on overhauling the station. The Trump administration announced that Amtrak, with the Department of Transportation's support, will lead the redevelopment and expansion of the station. Vornado has spent hundreds of millions of dollars redeveloping Penn 1 and Penn 2, and creating public plazas surrounding the buildings. The company is looking at all opportunities, including the potential sale of the Hotel Penn site, where Vornado has long planned an office building.


The company is also considering Deloitte's agreement to lease 800,000 square feet in Related Companies' 70 Hudson Yards, which could give Vornado confidence to begin construction at the Hotel Penn site, known as Penn 15. Roth hinted that Vornado could pivot to building apartments, but acknowledged the political environment around housing development in New York City. He believes the global kerfuffle will be resolved, settled, and over much more quickly than expected.


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Developer picks up distressed Seattle building from Shorenstein Properties


Vanbarton Group has acquired a distressed office building in Seattle from Shorenstein Properties, marking its first conversion outside New York. The six-story, 345,000-square-foot property was purchased for $25 million, with a face value of around $120 million. The developer is considering converting the building into residential apartments and has been in talks with office users interested in acquiring the building. The firm is currently working on three projects in the city, including a 588-unit conversion at 160 Water Street in the Financial District.


Office conversions have become more popular due to hybrid work and rising interest rates, prompting developers to explore new neighborhoods and cities for opportunities. Donahue Douglas, a company aiming to raise $1.5 billion to convert office buildings in 10 cities, and TF Cornerstone's joint venture with Dune Real Estate Partners began with the Wanamaker building in Philadelphia. Shorenstein purchased 2601 Elliott Avenue in 2021 for $185 million, but the company's assets were liquidated in 2023.


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First inflation, now tariffs: The resale economy is having a moment


Tariff concerns are driving consumers to secondhand stores and online platforms, with Miami-based Miami-based thrift vintage fashion reporting a 31% and 23% increase in sales in the past two months compared to 2024. The resale economy has been growing steadily for years, with inflation-weary consumers searching for deals and younger Americans valuing secondhand finds. Concerns about tariff-induced price increases on clothing, homeware, and baby gear are poised to widen the demographic of the typical thrifter even further. Secondhand-store owners say their customer bases have become more diverse, while others say sales have ticked down with clients cutting back on nonessential spending. "Buy Nothing Project" groups on Facebook have exploded with posts and new member requests, as people seek community-based secondhand options for clothing and baby gear.

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