As office landlords struggled, city agencies provided relief.
Some of the largest office leases in New York City signed in the past two years have been by city agencies.
The third-largest in 2023 was the Department of Citywide Administrative Services’ agreement to take more than 640,000 square feet at 110 William Street, owned by Pacific Oak and Savanna. The third-largest last month was the Department of Aging’s deal to take 80,000 square feet at Alexander Rovt’s 14 Wall Street.
City leases, and the lobbying efforts of owners whose properties benefit from them, have drawn scrutiny amid reports that state officials are investigating possible bribery and money laundering across the city’s commercial property leases.
Officials seized the phones of Ingrid Lewis, chief adviser to the mayor; Jesse Hamilton, deputy commissioner for real estate services at the Department of Citywide Administrative Services; and Cushman & Wakefield broker Diana Boutross. Cushman & Wakefield handled the William Street lease, The City reported.
An office landlord telling government agencies that it has office space available is not, on its own, lobbying. Nor is answering a request for proposals and interacting with an agency as part of that process.
Once an agency declares its need for space, a property owner who pitches a building to fill that need is trying to influence a “government procurement,” and needs to disclose such interactions as lobbying. The same goes for trying to shape the terms of an RFP or bidding process.
Last year, DCAS released a “statement of needs” that indicated that the Department of Human Resources’ technology services arm would move from its office at Brookfield’s 15 MetroTech Center in Brooklyn because it needed more space and did not want to pay higher rent.
Brookfield disclosed that it lobbied DCAS about 15 MetroTech and the “potential acquisition of MetroTech assets.” It also recorded “leasing conversations” with the Department of Housing Preservation and Development, the Board of Elections, DCAS and HRA regarding space at 5 Manhattan West, 333 West 34th Street, 15 MetroTech and 1 MetroTech.
The company also reported discussions about the state Office of Court Administration’s expansion at Brookfield’s 1 Pierrepont Plaza.
HRA ended up moving its employees to 850 Third Avenue, owned by Salmar Properties and Madison Capital. Salmar lobbied DCAS regarding the lease, as did the owners of 110 William Street.
We don’t yet know what leases are being investigated by the Manhattan district attorney’s office. But the lobbying records related to DCAS suggest that owners with struggling office properties (the mortgages of many of the properties that were pitched have entered special servicing) saw city leases as a potentially stabilizing force.
What we’re thinking about: What concessions will the Adams administration make in order to get the City Council to pass the City of Yes for Housing Opportunity? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: My two favorite Angelas, Angela Lansbury and Angela Carter, came together in the 1984 film “The Company of Wolves.” Carter co-wrote the script with director Neil Jordan, and Lansbury played a grandmother in the film.
Elsewhere in New York…
— Council member Lincoln Restler sent a letter to Department of Citywide Administrative Services Commissioner Louis Molina demanding information about Jesse Hamilton’s work at the agency, Politico New York reports. Among other things, Restler wants the agency to disclose who paid for Hamilton’s trip to Japan.
— Two Trees Management has given Oko Farms until mid-November to leave a vacant lot where it has operated, rent free, since May 2021, Gothamist reports. Two Trees says it needs the site as a staging area to construct the final building of its Domino Sugar megadevelopment.
— About 200 pro-Palistinian protesters were arrested on Monday at a sit-in outside the New York Stock Exchange, the Associated Press reports. The protesters did not make it inside, but got past a security fence on Broad Street and sat down.
Closing Time
Because of the holiday, we have no Monday closings to report.
New to the Market: The highest price for a residential property hitting the market was $65 million for a penthouse unit at the Sutton Tower condominium project, 430 East 58th Street. The apartment is 9,200 square feet. Corcoran Sunshine Marketing Group has the listing. Gamma Real Estate took over the project from failed developer Joseph Beninati.
Breaking Ground: The largest new building application filed was 78,910 square feet at 1 Wadsworth Terrace. The seven-story, mixed-use building would be used as an adult health care and treatment facility. Kevin Paul of H2M Architects & Engineers is the applicant. — Joseph Jungermann