Sunday Summary: The Real Estate Ballet Goes On

Last Monday at around 3 o’clock the world stopped. Everyone stepped out of their homes, their offices, the restaurants where they were finishing a late lunch, donned a pair of special glasses, and looked up at the sky. Yes, we collectively went nuts about the [solar eclipse]( that passed over North America. For those in real estate, the word “eclipse” is somewhat triggering; the business has fought off the perception that it’s in eclipse since 2020. And, while we’re sure there was a nervous sigh two days later when [inflation numbers]( came in that were higher than expected (thanks to [rising housing and gas]( prices), and, yes, there were some [distress upticks]( last month, it didn’t feel like anything was in eclipse if you looked at the sales and loans that we saw last week. First up, Blackstone (naturally) made the biggest and boldest bet anyone has made in a very long time with [a $10 billion play]( to buy out all the outstanding shares for Apartment Income REIT (which owns about 27,000 apartments across seven states) to take the REIT private. Speaking of Blackstone, it also landed [$428.5 million in refinancing]( for a 23-hotel portfolio across 10 states from Morgan Stanley and Société Générale. (Although Blackstone was not entirely immune to the market’s various aches and pains. Their $195 million CMBS-backed loan on 211 Main Street in San Francisco [is in special servicing](.) L&L Holding Company, [secured a loan]( at nearly 10 figures ($911 million) from Sumitomo Mitsui Trust Bank on the 90 percent leased 425 Park Avenue where Ken Griffin’s Citadel is the anchor tenant. David Martin’s Terra plunked down $12.5 million from the Meruelo family’s Deauville Associates to get a piece of the former Deauville Beach Resort site where Martin is planning an “[iconic development](.” InterVest Capital Partners is [putting $500 million]( into Builders Capital as part of a new strategic partnership. There was solid leasing around the country, like Apple deciding to take 45,000 square feet at the Plaza in Florida’s Coral Gables [for a new office](. [SL Green Realty]( [secured three tenants]( in the form of [Lingotto]( (an investment firm), [Certified Moving & Storage]( (a logistics firm) and Centaur Fund Services U.S. (a financial advisory firm) at 461 Fifth Avenue, bringing the total building up to 100 percent. But the big kahuna still promises to be Amazon’s 2 million square feet of warehouse deals over the first quarter of the year in Southern California. And what about all the people moves that have been going on? Like, for example, Adam Hakim and James Murad, [who left]( Meridian Capital Group for Ripco Real Estate. Or Heather Nevin, [who is ditching]( Transwestern to become head of CBRE’s Mid-Atlantic office. Or Todd Korren, whom Lee & Associates tapped from Avison Young to [lead its New York leasing team](. Finally, in a city (New York) where almost every proposal gets mercilessly shot down, it’s nice when someone shoots and scores. By that we’re referring to the proposal for a new[25,000-seat soccer stadium]( and 1,400-unit affordable housing plan at Willets Point that passed the City Council unanimously. [Of course….]( That doesn’t mean there are no problems. The New York State Senate was [still bickering]( about the state’s budget and still [postponing a vote]( when Commercial Observer went to bed. Gov. Kathy Hochul has been pushing hard for more housing in her proposals (even if the prospects look grim) and Mayor Eric Adams has also been [lobbying for zoning changes]( that would make city blocks close to mass transit automatically eligible for construction of five-story apartment buildings and allow single-family homeowners to add rental units to their houses. “Mayor Adams has been clear that Albany must pass comprehensive legislation as part of budget negotiations to help build our way out of the city’s housing crisis,” a spokesperson for the mayor said Friday via email. “Yesterday, we celebrated New York City’s largest all-affordable housing project in 40 years passing through the City Council. We are confident that the state legislature and Gov. Hochul will come to a monumental agreement on housing soon as well.” (We can assume the mayor’s office was referring to the Willets Point proposal… oh, did we mention that it also promises a 650-seat school and a 350-key hotel?) Speaking of budgets, development budgets are also going to be under intense scrutiny for the rest of the year, despite what happens with interest rates. “When we look at a budget now, we question what is in the budget that is accretive income, and what’s a necessary expense for a deferred maintenance,” said MetLife Investment Management’s Michael Amoia [at the ULI conference]( this week at the New York Hilton Midtown. “You don’t get credit for deferred maintenance on rent rolls. You look at budgets now and ask: If there is a future funding obligation, do we want to lend against that entire funding obligation?” [At the zoo]( If you’re looking to get away from brick-and-mortar real estate this Sunday, may we suggest you go someplace scenic. Like, say, the Bronx Zoo. Makes for a lovely little day trip. Or, if you’re really looking to spice things up, [you can buy a zoo](. Not in the Bronx, necessarily, but in North Carolina there are two for sale (that we know about) for $16 million and $4.5 million. (At that latter price, you’d be stupid not to buy it!) Moreover, you’re not going to have to run out and start buying monkeys. The animals are included in the purchase price. This one is worth a little extra time to read this weekend. See you next week. [View in Browser]( | [Advertise]( | [Forward to a Friend]( [Manage your email preferences or unsubscribe]( [Share your thoughts: Help us improve with our quick feedback survey!]( [Commercial Observer]( © Copyright 2024 [Observer Media]( 1 Whitehall Street, Floor 7, New York, NY 10004 This newsletter was published 04/14/2024