It’s year-end look-back time, folks. But rather than put you to sleep with statistics, we’ll share a bunch of our favorite fun facts and phenomena from the ever-entertaining world of commercial real estate.
OFFICES REDUX. Confounding predictions that work-from-home and high interest rates would kill the market for good, Manhattan’s best buildings have so little space available — and so much demand for it — that tenants can’t find room to move or expand. On Park and Sixth avenues, at the World Trade Center, Brookfield Place, Hudson Yards, Manhattan West, One Vanderbilt, One Bryant Park and other top-tier towers, vacancy is between zero and 10%. (No more statistics, we promise!)
A TALE OF TWO CHINAS. Shanghai-based Fosun Five Holdings bought 28 Liberty St. in 2013 and did a helluva job beautifying, modernizing and re-filling the former Chase Manhattan Plaza, where offices and retail spaces are nearly 100% full. It’s so successful it was reported this month that Fosun might sell it for more than twice the $715 million it paid for it (which Fosun denied).
It’s a different, sad story at the Waldorf-Astoria, which China’s Anbang insurance bought from Hilton in 2014. After another Chinese company, Daija, took it over when Anbang collapsed, the iconic hotel has yet to reopen after nearly a decade of bungled construction. Hilton says wait until spring.
SKYSCRAPER TWISTS. Two of the city’s most iconic, 1930s-built skyscrapers are thriving. Tenants such as Lazard and Deloitte are based at 30 Rockefeller Plaza, of which Tishman Speyer owns 70% and Comcast the rest, including NBC studios for “Saturday Night Live” and “The Tonight Show.” The Empire State Building is more than 90% leased after Empire State Realty Trust spent hundreds of millions of dollars to restore and modernize it.
But it was the year from hell for two other skyline-defining landmarks. Chrysler Building leasehold owner Aby Rosen’s RFR was booted from managing the “Queen of the Night Sky” by landowner Cooper Union and is fighting to stave off foreclosure. The building is 40% vacant. Downtown, the Trump Organization’s 40 Wall Street’s offices are more than 25% vacant and the retail is near-empty. What Donald Trump calls “the Mona Lisa of properties” needs hundreds of millions of dollars in renovations to be viable again.
JEFF SUTTON TIME. Timing’s everything in real estate, and nobody in 2023 and 2024 had his eye on the clock more than Wharton Properties owner Jeff Sutton. Capitalizing on luxury retailers’ craze to own the properties that house their stores, Sutton in January sold a three-level retail condominium at Fifth Avenue and East 56th Street to Gucci parent Kering for a mind-boggling $963 million. It followed his earlier sale of two properties on the avenue to Prada for $835 million.
FROM GERMANY, WITH LOVE. Munich Re, which isn’t in the real estate business, pumped $1 billion into Big Apple real estate this year. The world’s largest reinsurance company dipped into petty cash to pay off a $500 million Wells Fargo mortgage at 330 Madison Avenue. A few months later, it spent $500 million more to buy out Mutual of America, its partner in 320 Park Avenue, making Munich Re the fully-leased tower’s sole owner.
LET THEM EAT EVERYTHING. SL Green, the city’s largest commercial landlord, is also its hungriest. Daniel Boulud’s spectacular steakhouse La Tete D’Or opened this month at SLG’s One Madison. So did Armani Ristorante at the developer’s just-opened 760 Madison Ave. In 2025, a new Carnegie Diner and a high-end Greek eatery will open at 1185 Sixth Ave. They follow Eleven Madison Park, Fasano and Le Pavillon, all in SL Green buildings.
FUTURE MUSINGS. Will Macy’s in Brooklyn soon belong to the borough’s memories like the Dodgers? Albert Laboz, leader of a group that bought the store’s Fulton Street building for a rock-bottom $23 million, said he envisioned making it a home for “experiential entertainment retail.” Macy’s said it hadn’t made up its mind whether to close the store. That’s what Walter O’Malley said before he moved the Dodgers to Chavez Ravine.
REPOSITION THIS. Class A-plus versus all other classes isn’t the only divide in office property values. It’s also between owners able to afford megabucks “repositionings” and those who can’t.
At 295 Fifth Ave., a $350 million redesign by Tribeca Investment Group, PGIM Real Estate and Meadow Partners helped to lure hedge fund Bridgewater Associates for its first Manhattan office. Paramount Group is spending more than a quarter-million dollars to revitalize vacant 60 Wall Street with a new, podium-level facade and public spaces. The trend includes buildings as diverse as Lever House, 1290 Sixth Ave., Penn 2, 10 Grand Central and the Seagram Building.
There are new lobbies and electronic upgrades up the wazoo; fancy air-filtration systems, outdoor terraces, health clubs, golf simulators (22 of them at 101 Park Ave. alone), pickleball courts and rooftop gardens. But pity less-well-heeled owners who can only boast of “convenient” locations.
LEAKY LEASES. Large retail-space deals moved at a crawl this year long after leases were signed. Brooklyn Fare & Market opened at One Manhattan Square three years after the deal was signed. Next month will make two years since we reported Simon Kim’s huge lease for a three-eatery complex at 550 Madison Avenue — and it’s not certain they’ll even open in 2025.
More supposed openings than in the past fall through completely. Two years ago, Asian grocery chain H Mart was reported to be opening a large store on East 86th Street. The space is vacant and back on the market. And we’re still waiting for interior design chain Blinds to Go at the former Dylan’s Candy Bar space near Bloomingdale’s — where we reported the lease more than a year ago but there’s no sign of work being done.
