In an effort to consolidate seven Midtown locations, Citibank renewed its 500,000-square-foot lease at 601 Lexington Avenue, the New York Observer reported. Citibank was previously interest in moving into a new office space during the downturn, according to unnamed Observer sources. [more]

Brookfield Office Properties CEO Ric Clark and 4 World Financial CenterBrookfield Office Properties has struck a deal with Bank of America to take its 49 percent stake in 4 World Financial Center and will own the entire property, the Wall Street Journal reported. Bank of America simultaneously renewed its lease for 750,000 square feet in the tower.

The largest landlord in the neighborhood, Brookfield has committed to Lower Manhattan with this deal and its recent promise to spend $250 million to upgrade the retail at the World Financial Center. However, with layoffs looming at financial firms and millions of vacant square feet being delivered in the World Trade Center, Brookfield has reason to be concerned. [more]

New York-based investment firm Paramount Group has recapitalized a 49 percent interest in its 2.5 million-square-foot office tower at 1633 Broadway, between 50th and 51st streets, GlobeSt.com reported, after Morgan Stanley, Bank of America and Merrill Lynch affiliates exited the building partnership.

Paramount’s new partners in the 48-story, Class A property include affiliates of Beacon Capital Partners and Paramount Group’s Real Estate Fund IV. In addition, SL Green Realty also acquired a preferred equity interest. Paramount retained its 51 percent controlling interest.

“We took our interest in the property to 51 percent to about 75 percent,” Dan Lauer, vice president of acquisitions for Paramount, told GlobeSt.com. “SL Green is making a preferred equity investment and Beacon is acquiring the remaining limited interest in the property.”
[more]

The CEO at commercial landlord Brookfield Office Properties said the firm could lease as much as 50 percent more office space this year compared with its best year ever.

On top of approximately 3 million square feet leased in the first quarter, “we could add another eight to nine million square feet of leasing this year, giving us something like 11 to 12 million square feet. That’s 40 to 50 percent better than our best year ever,” company CEO Ric Clark said. The firm has an interest in 109 office properties globally with 78 million square feet of space.

Clark was speaking today at the National Association of Real Estate Investment Trusts conference in Midtown.

Although the office leasing market is improving in Manhattan following the downturn, Clark did not expect new leases signed at its World Financial Center Downtown to start at the same level as those now paid by financial services giant Merrill Lynch. [more]

Paramount Group purchased the remaining 49 percent stake of the 2.4 million-square-foot, 48-story 1633 Broadway from Morgan Stanley and Merrill Lynch, sources told the New York Observer. The deal values the building, at the corner of Broadway and 50th Street, at $2 billion, and the Observer called it the most significant commercial building deal since Googe’s purchase of 111 Eighth Avenue last winter. The office tower at 1633 Broadway has several high-profile tenants, including Allianz Global Investors, which signed a 20-year deal for 213,000 square feet in August in one of the largest deals in 2010. [NYO]

From the March issue: Tourism is back, and lenders are eyeing hotels more favorably as a result. In 2010, a record 48.7 million visitors traveled to New York City. These visitors spent approximately $31 billion during their visits to the Big Apple, according to estimates by NYC & Company, the city’s official marketing and tourism organization. To catch some of those tourist dollars, more than 36 hotels opened in New York last year. In addition, there are at least 26 new hotels in line for construction. Concurrently, financing for the hospitality asset class — which was in the doghouse with lenders just a few years ago, ranking as their least favored sector — has improved for both hotel owners and developers. [more]

Home insurer Allstate has sued Bank of America’s Merrill Lynch unit over claims it fraudulently sold the insurer about $167 million of residential mortgage-backed securities, Crain’s reported. In a complaint filed yesterday in New York Supreme Court, Allstate asked for damages, including the lost market value of the securities and principal and interest payments. “Because of the systemic abandonment of underwriting standards and the resulting inclusion of toxic, highly risky mortgage loans to back the certificates, most of Allstate’s certificates have been downgraded from the highest possible ratings to junk-bond ratings,” Allstate said in the complaint. [more]

Oppenheimer Funds has signed a 15-year direct lease for 235,000 square feet at 2 World Financial Center, where it’s currently a subtenant, the Post reported. The deal is a coup for landlord Brookfield Properties, which is facing relocations by current World Financial Center tenants Merrill Lynch and Nomura in the coming years. Oppenheimer’s current sublease is from Merrill Lynch, and expires in 2013. Stuart Romanoff, who represented Oppenheimer in the deal along with Cushman & Wakefield colleagues Amy Fox and Robert Constable, said the company conducted “an exhaustive search” for space but ultimately decided to stay put.  [more]

If misery loves company, embattled investment bank Goldman Sachs should be feeling better with each passing day. Yesterday, it was revealed that U.S. prosecutors are investigating Morgan Stanley over whether the bank misled investors in mortgage-derivatives deals it was simultaneously betting against. Today, sources told the New York Times that New York Attorney General Andrew Cuomo has launched a probe into whether eight banks duped rating agencies into inflating the grades of mortgage securities in the years before the housing market’s collapse. UBS, Citigroup, Credit Suisse, Deutsche Bank, Crédit Agricole and Merrill Lynch are targets of the probe, in addition to Goldman Sachs and Morgan Stanley.  [more]

It may be hard to believe, but lenders are now actually sending letters of intent to provide construction financing. Construction financing, perhaps the riskiest type of mortgage financing, is available in the tri-state region for rent-regulated and other multi-family buildings. It even exists for condominium projects (and yes, I did say “condominium”).

Gino Martocci, president of the New York City and Long Island region of M&T Bank, said: “We have and continue to provide construction financing for well-capitalized clients. We are in the process of providing construction financing for a brand new hotel in the Union Square neighborhood.” Another established developer who prefers to remain anonymous, who is in the process of building a rental building off Fifth Avenue on the Upper East Side, told me that 10 financial institutions have expressed interest in the development. [more]