New York Office Market Builds Momentum

After a brutal few years for office landlords, New York City’s market is shifting into a different gear as leasing activity is climbing and trophy assets are trading.

In July and August, tenants signed more than 6.7 million square feet of leases, up 40 percent year-over-year, putting Manhattan on pace to top 40 million square feet for 2025, a milestone it hasn’t reached since before the pandemic. Deloitte led the charge with an 807,000-square-foot commitment at Related’s 70 Hudson Yards, joined by Amazon, Verizon and Piper Sandler locking in big blocks of space. Availability is at its lowest since early 2021, sublet supply has tightened for 11 straight months and Midtown South is leading the pack, accounting for more than half of last month’s deals.

Investors are taking note. Silverstein Properties and CalSTRS unloaded 1177 Sixth Avenue to Norges Bank and Beacon Capital Partners in an all-cash, $571 million sale. And opportunistic buyers are returning. Savanna is the latest to make a move, in contract to acquire the leasehold on 444 Madison Avenue for $50 million, the company’s third office acquisition in the past nine months.

Big-ticket trades are reemerging, too. RXR’s $1.08 billion purchase of 590 Madison Avenue, the first billion-dollar office deal in New York since 2022, drew heavy bidding, with Scott Rechler’s firm ultimately winning with $785 million in financing from Apollo.

Meanwhile, developers are again willing to bet on the future. SL Green is in contract to buy the former Brooks Brothers flagship at 346 Madison Avenue for $160 million, with plans for an 800,000-square-foot tower steps from One Vanderbilt. BXP is moving ahead with its billion-dollar 343 Madison project, while Vornado, Citadel, RXR, TF Cornerstone and Larry Silverstein are lining up tenants and approvals across Midtown.

Other major markets are walking a different path. South Florida is recalibrating after a pandemic boom: values across Miami-Dade, Broward and Palm Beach have cooled, deals are still happening and several developers are pulling back by either canceling or pausing planned office projects.

Los Angeles is working through a lot of distress. Downtown vacancies have hit 31 percent and trophy towers like Wedbush Center and the Santa Monica Clock Tower are appraising at steep discounts. Yet Century City is thriving, with vacancy below 10 percent and base rents hitting a record $80 per square foot in the second quarter. San Francisco still has the highest vacancy rate in the nation, nearly 35 percent, with two-thirds of recent trades selling at discounts.

Chicago remains weaker than its pre-pandemic baseline, with O’Hare the lone bright spot among otherwise declining suburban rents.

And in Houston, the Central Business District commands top rents, but sales like 801 Travis, at just $54 a square foot, highlight how far values have fallen for older, half-empty properties.

For now, New York is a bright spot. It’s not a full recovery, but the combination of leasing momentum and big-money bets is giving the sector a sense of direction.

There was plenty of other real estate news this week. Real estate is confronting the reality of a Mamdani administration, a top Douglas Elliman team leaves for Corcoran and we check in on the status of West Palm Beach’s condo pipeline.

Real estate braces for Mamdani

Real estate is bracing for a Zohran Mamdani administration as the NYC mayoral frontrunner continues his surge toward City Hall. Mamdani, fresh off his Democratic primary win, recently rallied with the powerful Hotel and Gaming Trades Council outside the Reuben Brothers’ Surrey Hotel, blasting the billionaire owners over alleged worker mistreatment tied to its luxury hotel-condo conversion.

Remaking a skyline: Status of West Palm Beach’s condo pipeline

West Palm Beach is in the middle of a condo boom that’s reshaping its skyline with more than 2,000 units in the pipeline and billions of dollars in financing behind them. Developers like Steve Ross, Jeff Greene, David Martin and Jorge Pérez are betting big on the city’s future as “Wall Street South,” pushing projects far beyond the traditional downtown core.

Top Elliman team Noble Black & Partners exits for Corcoran

Noble Black & Partners, one of Douglas Elliman’s most powerful teams, is defecting to rival Corcoran. Led by broker Noble Black, the Manhattan-based team closed more than $250 million in sell-side transactions last year, ranking No. 4 among New York City resale agents and No. 13 in new development deals, according to The Real Deal’s latest rankings.

The Soho-i-fication of Williamsburg

Williamsburg has officially traded its gritty hipster past for a luxury retail future, and institutional investors are piling in. Prime corridors like North 6th Street are fetching record prices. Retail buildings have traded for up to $6,000 a square foot, while asking rents are pushing $400 to $500 a foot, rivaling Soho.

Distressed Chicago multifamily properties take wild rides to recovery

In a Midwest multifamily market that has been making headlines for strong rent growth, a rising tide isn’t necessarily raising all boats. Some owners of properties that fell into distress as interest rates rose over the past few years have scored lucky breaks via down-to-the-wire refinancing deals. But other properties faced a rocky road to recovery and some still haven’t found new owners.

Yitzchak Tessler’s last stand

Yitzchak Tessler’s once-glittering Midtown South condo dream at 172 Madison has ended in foreclosure, closing the book on a decade-long fight to sell out the high-end tower. ArcPe seized the building’s 12 unsold units, including five penthouses, after Tessler’s refinancing plans repeatedly collapsed in bankruptcy court.

Miami developers hunt for condo buyers from London to Latin America

Miami developers are hitting the road again, chasing condo buyers from London to Latin America as domestic demand cools. With higher interest rates, longer delivery timelines and fewer U.S. buyers willing to wait, firms are leaning back on a familiar playbook: foreign capital to fill preconstruction pipelines. Brokers are reporting renewed traction from Mexico, Brazil, Argentina, Colombia, Turkey and Spain, with some projects already logging more than half of presales from international buyers.

The resi horse race

When Compass CEO Robert Reffkin announced in November that Compass would launch its three-phased marketing strategy, the industry responded with vigor. Zillow moved to ban agents from listing properties that were previously marketed as private exclusives, as Redfin threw its weight behind the policy. Compass cried monopoly and sued Zillow. Commercial giant CoStar pushed back against Zillow’s new rules and vowed to promote listings banned on the platform on its Homes.com. Thus, the industry’s top power players became locked in a duel, each preaching their way as optimal for agents and consumers.

$700M in Texas CRE debt pegged for foreclosure auction this month

Multifamily distress is mounting in Texas. The total number of commercial loans headed to foreclosure continues to rise. This month will see more than $710 million in loans at the auction block, up from $670 million in August and $400 million in July. Harris County, home to Houston, was once again the hardest hit, with 10 properties totaling nearly $350 million in debt facing foreclosure.