Weekly Market Report - November 5, 2026
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New York's real estate lending surged for the second consecutive year, with the top 20 lenders providing $36 billion in loans, a 57% increase from the previous year, driven by a recovery in the commercial real estate market. The leading lenders maintained their positions but saw significant growth: Wells Fargo topped the list with $6.3 billion (up from $2.7 billion), followed by JPMorgan Chase with $5.6 billion (up from $4 billion), and Citibank at $3.1 billion (up from $2.7 billion). An analysis by The Real Deal, covering mortgages recorded from August 2025 to July 2026, highlighted strong underlying market fundamentals, like record rent levels and a recovering office market.
Despite interest rate volatility and a rise in construction costs, financing remained robust, especially in the multifamily sector, which accounted for about 18.5% of new deals. Developers adapted to new property tax incentive programs, keeping new projects smaller. S3 Capital Partners saw a significant boost in lending, attributing it to sustained tenant demand. The rankings noted traditional banks still held dominance and included alternative lenders like Apollo Global Management.In the largest lending deal, Wells Fargo led a $1.2 billion construction loan for BXP's office project at 343 Madison Avenue. The report emphasized that developers maintain a positive outlook despite market fluctuations, focusing on project completion and adjusting financial strategies as needed.
Market Direction
· Leasing volume eased following a strong Q2, reaching 13.7M SF (-7.4% QoQ), while remaining essentially flat year-over-year (+0.3%).
· Deal activity moderated to 1,951 transactions (-4.6% QoQ). While the number of buildings leased declined slightly to 1,455 (-3.3%).
· Outer-borough leasing grew 5.5% to 2.9M SF, increasing its share of citywide volume from 19% to 21%.
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Weil, Gotshal & Manges' collapse has resulted in valuable prime office space on Fifth Avenue, covering roughly 450,000 square feet across 10 floors of the General Motors Building, where it pays about $121 per square foot under a lease expiring in 2034. Market brokers estimate that current tenants would pay over $200 for this coveted space, particularly due to its views and Midtown's scarcity of premium office locations. The outcome of this situation remains unclear, with possibilities including Weil seeking bankruptcy protection and selling the lease or BXP, the landlord, paying Weil to relinquish it.
Additionally, BXP faces refinancing a 3.43% mortgage next year, which could enhance Weil's negotiation leverage. The GM Building has a storied history, transformed from housing General Motors’ headquarters to now hosting luxury retail and fine dining. Manhattan’s office space demand remains robust, with a low availability rate of 13.4%, especially for high-quality spaces, indicating a competitive market for Weil's offices. Interest from brokers suggests that a battle for this elite space is already underway.
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New York commercial property owners, including SL Green, are grappling with whether strong rent growth can counterbalance rising interest rates. Despite a busy Manhattan office market, SL Green’s Q3 results revealed challenges, with earnings falling short of expectations. The demand for space in SL Green’s high-quality office towers is solid, but the impact of interest rates is evident. A recent $2 billion refinancing for the fully leased 245 Park Ave. resulted in a rate hike from 4.3% to 6.4%. Additionally, SL Green's objective to sell $2.5 billion in properties to reduce debt is hindered, with only $720 million in sales completed so far.
Analysts acknowledge robust leasing results, but note difficulties in other business areas. SL Green reported $1.59 per share in funds from operations, below the $1.63 consensus, prompting CEO Marc Holliday to emphasize the company’s strong overall performance. In the last quarter, SL Green leased 591,000 square feet at rents 14% higher than Q2, achieving a 95% leasing rate across its portfolio. However, rising rates are likely to reduce earnings for 2026 by 25 cents per share, delay property sales, and lead to higher debt balances, despite solid institutional demand for assets.
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Fisher Brothers has partnered with David Werner, acquiring a 49 percent stake in the 43-story, 1 million-square-foot office tower at 605 Third Avenue in New York City. Concurrently, Fisher withdrew its Israeli bond market offering after insufficient interest from investors, largely due to rising global interest rates and challenges faced by unrelated issuers. A spokesperson indicated that future bond offerings depend on favorable market conditions. They originally aimed to raise about $100 million for acquiring JPMorgan Asset Management’s stake, which was valued at $425 million.
Had the bond issuance succeeded, Fisher would have paid approximately $11.5 million for the interest, below the senior mortgage. Meanwhile, Werner has established himself in Manhattan development, acquiring discounted office properties, including a significant stake in the Pfizer building conversion. Despite stepping back from the Israeli bond offering, Fisher is pursuing other financing sources for capital expenditures, leasing costs, and general operational needs. The Israeli bond market has been less favorable for U.S. developers following recent defaults by other firms, highlighting a shifting investment landscape.
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Rob Speyer is launching a new office fund, fitting the Chrysler Building into its strategy. Tishman Speyer and Bouwinvest Real Estate Investors formed a joint fund aimed at acquiring premium office properties in the U.S., targeting major and growth markets. Specific details about acquisition targets and fund size were not revealed. This collaboration follows a previous partnership on a $400 million Korea Living Venture fund for Seoul's multifamily sector. Tishman’s executive Nate Shanok mentioned the fund's focus on well-located office assets with consistent demand and limited new supply.
This initiative has facilitated Tishman’s return to the Chrysler Building, where a 150-year ground lease was agreed with Cooper Union, involving a $235 million investment. Planned updates include enhancements to amenities and office spaces. Meanwhile, Real Capital Solutions launched a $350 million fund aimed at distressed Class A and B office properties as demand for quality workplaces persists.
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Manova Partners has listed the leasehold of H&M-anchored 589 Fifth Avenue for up to $300 million, representing an 18% reduction from the $365 million it paid for the lease in 2019. The 184,000-square-foot property. Retailers are interested in acquiring the space to take over H&M’s 68,000-square-foot area once its lease expires in 2033, with H&M generating rents of $319 per square foot. GLL Real Estate Partners, previously part of Macquarie Group, signed a 99-year lease in 2019 and secured a $182 million loan from Deutsche Pfandbriefbank. In 2024, GLL rebranded as Manova Partners. Deutsche Pfandbriefbank announced in 2025 its intention to cease new lending in the U.S. to concentrate on Europe, following significant losses from its U.S. commercial real estate portfolio.
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Extell Development and Hyatt Hotels Corporation have revealed plans for The StandardX hotel in the Theater District at 255 West 45th St., featuring approximately 1,800 rooms. This hotel will offer several high-end amenities, including an observation deck over 1,000 feet above street level, a rooftop pool, and various dining and entertainment options. A standout feature is an enclosed free-fall thrill ride that raises riders 260 feet before a sudden drop, reminiscent of Six Flags Great Adventure’s former Zumanjaro ride.
The proposal faced public scrutiny, particularly from zoning expert George Janes, who questioned the classification of the ride as an accessory use for a hotel. Despite initial opposition, the project is slated to proceed, with an expected opening in the latter half of 2028. Ari Alowan Goldstein from Extell emphasized the innovative vision behind the development, while Hyatt’s Amar Lalvani highlighted the brand’s aim to create dynamic environments. The StandardX will be Hyatt’s first hotel of this type in North America, with the only existing location in Melbourne, Australia.
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Essex Crossing, a significant megadevelopment on the Lower East Side, is approaching a maturity default on its $215 million debt, which has been redirected to special servicing due to cash flow concerns. Opened in 2019, the complex, covering 1.9 million square feet, is facing difficulties, particularly since the pandemic, which led to a negative net operating income of $3.5 million in 2020. Despite this, recent financial reports indicate revenues exceeding expenses and a 96% occupancy rate in the residential sector. An extension for ownership is anticipated.
Deutsche Bank, which has invested substantially in the development, acquired various portions of Essex Crossing and, along with Square Mile Capital, provided $466 million in debt to stabilize the project’s second phase, replacing a previous $455 million in construction loans. The development, spanning nine sites, includes over 1,000 residences, 350,000 square feet of offices, retail spaces, and open areas, with average residential rent around $3,381.61 per unit. The project was initiated by Delancey Street Associates in 2013.
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JPMorgan Chase's skyscraper at 270 Park Avenue, estimated at an all-in cost of $6 billion, may significantly exceed earlier projections, which ranged from $3 billion to $4 billion. This figure encompasses construction, furnishing, and intangible assets like air rights. The bank has avoided disclosing specific costs, despite the project being described by Jamie Dimon as a “true physical manifestation of our values.” The development has generated 8,000 construction jobs and broke ground in 2019 prior to the pandemic and rising interest rates affecting construction costs, resulting in a price of $2,500 per square foot. While Related Companies' 50 Hudson Yards was anticipated to be the most expensive office project in NYC at around $4 billion, 270 Park Avenue surpasses that. The skyscraper, designed by Norman Foster, will accommodate approximately 10,000 employees and is central to JPMorgan's sizable Midtown campus, totaling nearly 6 million square feet.
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Savanna continues to delay a foreclosure sale at 521 Fifth Avenue, as lender Deutsche Bank requested a 90-day extension for the 496,000-square-foot property near Bryant Park, which the borrower consented to. Over the past six months, three extensions have been granted to avert foreclosure. Deutsche Bank is not keen on taking possession and has partnered with Savanna to market the property, although the sale process has faced setbacks; the property was recently delisted after a $265 million listing when a sale fell through. In June, the property was appraised at $270 million.
Issues for Savanna began in November 2024 when Wells Fargo filed a preforeclosure suit due to missed payments on a $242 million loan, which expired in June 2021 but received three extensions extending to June 2024. A default judgment was issued last August, raising the debt to $259 million. While an auction seems probable, no date is set. The loan funded Savanna’s $381 million acquisition from SL Green in 2019. Currently, the property is 67% occupied, down from 81% in December 2021 and 90% in December 2020, with about 17% of gross leasable area available.
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In 2000, Manhattan's office leasing peaked at 50 million square feet during the dot-com boom fueled by firms like DoubleClick. Key property deals included Larry Silverstein's World Trade Center lease and Tishman Speyer's Rockefeller Center acquisition. Presently, leasing is poised for its strongest year since then, led by tech giants like Google and Anthropic, with predictions indicating 43.81 million square feet leased by 2026. Current drivers are law firms and finance, rather than tech alone, while the market is reportedly more resilient with tenants holding stronger finances compared to 2000.
However, challenges such as inflation and geopolitical tensions cast doubts on sustainability. New office construction is limited since the pandemic, exacerbating space scarcity, compelling companies to secure leases early. Historical comparisons show firms in 2000 were less informed, often over-leasing, unlike today’s context. Moreover, the average rent is now $74 per square foot, significantly higher than in 2000. Thus, while leasing approaches record levels, the market landscape has shifted considerably, raising questions about long-term viability.
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Members of the Adjmi and Cayre families have recorded a significant loss after selling two Midtown storefronts near Bloomingdale’s for $16.8 million, having originally purchased them for $22 million in 2007. This sale represents a nearly 25% loss, despite both properties being fully leased in a bustling shopping area. The buyer, 720 Lexington Ave Z LLC, acquired the buildings for cash, with the transaction finalized on October 13. The reasons for the price discount are uncertain, although one property’s primary tenant, Pollo Campero, has a lease until 2032, while the other, occupied by Aerie, has a lease expiring in February.
Limited development potential exists for the properties due to separation by another landlord-owned building. The Adjmi and Cayre families, influential in the real estate sector, may reflect a larger trend as retail conditions improved in Manhattan during the third quarter, which included the World Cup, leading to rent increases in nearby areas. Despite this improvement, the Lexington Avenue properties are seen as slightly underperforming in comparison to surrounding rents.
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The Sapir Organization has secured $105 million in refinancing for its 28-story office tower at 261 Madison Ave., close to Grand Central Terminal in Midtown Manhattan. This refinancing underscores the organization's commitment to the property, which they have owned since 1997. Newmark's Anthony Orso, Ari Schwartzbard, and Clifford Welden facilitated the loan, provided by Genesis Credit. The 261 Madison Ave. building spans 398,000 square feet and serves as The Sapir Organization's headquarters, featuring a blend of midcentury architectural design and modern office interiors, with flexible workspaces. CEO Alex Sapir emphasized the enduring value of the property’s location and amenities.
The building connects tenants to a major business district and transportation, including commuter rail and multiple subway lines. The Japanese restaurant Zuma is also located within the premises. This refinancing aligns with The Sapir Organization's ongoing investment in Manhattan's commercial landscape, having previously developed and managed significant properties like 11 Madison Ave. and 2 Broadway.
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Madison Capital and Lubert-Adler have sold their leasehold interest in the 71 Fifth Avenue property after a five-year wait and a substantial price drop. Namdar Realty Group acquired the leasehold for $62 million, as reported by the Commercial Observer. The 11-story office building is located between the Flatiron and Union Square areas, with roughly 90 years remaining on its lease, held by Samco Properties and the family of Mark Lapidus, WeWork's former global real estate head. Meridian Capital Group facilitated the transaction with a team including Helen Hwang, David Schechtman, and Brian Szczapa.
Previously, in 2016, Madison Capital had committed nearly $85 million upfront and $3.5 million annually for the lease but aimed to sell the property for potentially $150 million when marketing it in 2021. Instead, it sold for less than half that target. Current tenants include WeWork, Adyen, Captions, and another undisclosed AI firm. A full floor exceeding 15,000 square feet remains available for lease. Additionally, Namdar's company recently purchased the 250 West 57th Street office building for $280 million, which is below the previous asking price of $350 million and is 84 percent leased.
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The Society of the Free Church of St. Mary the Virgin is selling 87,000 square feet of unused development rights to Midtown firm Extell for $23.9 million. Gary Barnett, founder of Extell, signed the purchase agreement in December, with rector Sammy Wood authorizing the deal. Proceeds will support the church's upkeep and community initiatives, including Neighbors in Need, providing aid to the homeless, and the Ecclesia Team, which distributes sandwiches at St. Mark’s Church. Additionally, 10% will go to the Episcopal Diocese of New York.
The air rights are expected to enable Extell to expand its planned development at 574 Fifth Ave., which is already a large project exceeding 1 million square feet, housing Manhattan's first full-scale Ikea and other amenities. Extell had previously filed permits for a 32-story tower on site, although it's unclear how the acquisition will affect its size. Extell's strategy has included acquiring air rights from various nearby churches and landmarked properties. The firm is also in contract to buy rights over St. Thomas Church for $36 million and has previously acquired rights from the Metropolitan Club for a different site, reflecting its ongoing ambition in Midtown's development landscape.
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In Brooklyn, investment activity in the commercial real estate sector remained consistent during the summer months, with approximately 316 sites purchased for a total of $1.7 billion from July to September, according to TerraCRG's market report. This figure is comparable to the previous quarter's 317 transactions, although the dollar amount reflects an increase from the $1.5 billion spent between April and June. In third-quarter 2025, a similar number of acquisitions occurred, but transactions totaled around $2 billion. The largest sale this quarter was the Mann Group's $122.5 million acquisition of Casa Hope, a 143-unit residential complex in Williamsburg.
The median rent in Brooklyn was $4,300 in September, slightly down from August but up 5% year-over-year. Another notable transaction was GO Residential's purchase of 409 Eastern Parkway for $109 million. TerraCRG foresees a robust 2026, predicting 1,381 transactions valued at $7.8 billion, surpassing the decade average. Downtown Brooklyn emerged as the most active neighborhood, accounting for $1.5 billion in deals. TerraCRG's CEO, Dan Marks, expressed confidence in the market's resilience and growth potential, reflecting on the analysis of the Department of Finance's investment-grade sales data.
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A financial technology firm, Ramp, has expanded its office space at 28-40 West 23rd Street by an additional 175,000 square feet, increasing its total footprint to 460,000 square feet. This marks Ramp's second expansion at the property this year and third overall, following its previous addition of 153,000 square feet in March after initially leasing 66,000 square feet from Microsoft. The length and asking rent of the new expansion remain undisclosed, but the average asking rent for Class B office space in Midtown South was $80.85 per square foot as of Q3 according to Colliers. The property houses other tenants, including Legora and Aramis from Estee Lauder, with Home Depot utilizing 120,000 square feet of retail space. Williams Equities received a five-year, $155 million loan for the property, which has undergone several upgrades since its acquisition.
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