Sunday Summary: Shuffle Up and Deal

Are Jay-Z and Nas back in the middle of the ultimate rap battle royale? Because when SL Green wanted to add some flash to their bid to build a Times Square casino last year [they enlisted]( Shawn Carter, aka El Presidente, aka Jay-Z to be part of their pitch to New York to get a gaming license. Now, in a power move that hip-hop aficionados will no doubt respect, Resorts World New York City tapped Nasir bin Olu Dara Jones, aka Nas, to appear beside them when they unveiled their $5 billion pitch for a major casino expansion in Jamaica, Queens, last week. (For those who don’t follow: There was long-standing beef between Jay-Z and Nas that was [supposedly quashed]( back in 2005, and they subsequently even [went into business]( together … but after last week we’re not so sure.) The plan by Genting (which owns Resorts World) would create the largest casino in the world (or so they claim), and would include a 1,600-key hotel, a 7,000-square-foot concert venue, space for 30 additional food and beverage vendors, and a casino floor as large as 350,000 square feet. But as to who will get one of three available downstate gaming licenses, it’s anyone’s guess. Related Companies and Wynn Resorts have teamed up for a bid in Hudson Yards; Thor Equities is proposing their site in Coney Island, Brooklyn; Steve Cohen’s Point72 Asset Management is making a play for a Queens site near Citi Field; and the Soloviev Group and Mohegan are trying to win the bid for space near the United Nations. We would advise Related to seek out Cardi B, and Thor to approach Nicki Minaj on their bids. Then [it’ll get interesting](. Shuffle up and deal Casinos are not the only place where we’re seeing a reshuffle. Big things are still happening in terms of personnel, with a major coup last week. We speak of Jonathan Pollack, who left an extremely comfortable perch as global head of Blackstone Real Estate Credit for Starwood Capital Group, where he’ll be [assuming the role of president](. “I have known Jonathan for more than a decade,” said Starwood Chairman Barry Sternlicht when announcing the move, “and he is universally respected across our industry with unparalleled relationships and a track record of success, which will help lead a firm of our scale and ambition.” But Starwood wasn’t finished. They [also lured]( Pawan Melgiri away from [Stellar Management]( to lead Starwood’s new middle-market loans origination vertical (overseeing loans between $15 million and $50 million). It sounds like someone is taking Barry Gosin’s words to heart. (Gosin, the head of Newmark, [penned an op-ed]( for Commercial Observer last week touting the virtues of seeking out and nurturing top talent.) Plus, last week we learned that former Silverstein Properties CEO Marty Burger was [opening his own shop]( called Infinity Global Real Estate Partners with backing from Andrew Farkas’s Island Capital Group. It will focus on office-to-residential conversions. We also heard that one of CO’s [Power 100 honorees](, Linda Foggie, who was global head of real estate for Citigroup, [left her position]( in December. It’s not yet clear where Foggie is going, but in the short term she joined the board of the proptech firm OfficeSpace Software. (They specialize in … you guessed it, workplace software!) But the biggest personnel shift was Thomas Cangemi, the CEO of New York Community Bank, [who stepped down]( after the bank reported a $2.4 billion hit to its earnings. (Cangemi was replaced by Alessandro DiNello.) This last one shouldn’t have been too big a surprise [given the kind of year]( NYCB has had. Its stock had been in free fall after reported losses on loans tied to office and rent-regulated properties. “What happened at NYCB is not unique: They had to take dramatic write-downs,” Trepp’s Lonnie Hendry told CO. “We’ve seen that there’s not an appetite in the marketplace for rent-stabilized multifamily, and office’s problems have obviously been well documented.” Moreover, last spring when NYCB picked up Signature Bank’s $34 billion deposit base (and $13 billion loan book) they might have bitten off more than they could chew. “NYCB is a little unique in that they had just moved up in asset size, got over $100 billion [in assets], so there was additional scrutiny from regulators on their portfolio, which forced them to take charge-offs and start accruing higher reserves,” Hendry said. “It doesn’t negate the fact their portfolio had a heavy concentration of rent-stabilized multifamily in New York City and office, and, just given the environment for those two asset classes, there’s a potential challenge if you’re a bank who has exposure there.” [Back to gaming!]( Well, back to hospitality. Because hospitality (except, maybe, for [the former Trump International Hotel]( in D.C.) has actually been doing very well of late. Particularly in New York (even though, yes, a good California hotel can [still nab a $122 million refinancing](, too). Since New York City began cracking down on short-term rentals (think Airbnb) through Local Law 18, there’s been a [burst of activity]( in the hotel sector. According to a report from JLL, the crackdown is expected to yield 2.2 million additional hotel room stays this year, which would mean $380.4 million in booking, and RevPAR for 2023 was already more than 15 percent higher than it was in 2019. The other element driving scarcity has been the fact that the city has been using [hotels to house migrants](, which has required some 16,000 rooms per night. Which, of course, can only last so long. “Relying on hotels is not a sustainable strategy,” state Sen. Jessica Ramos of Queens told CO. “It is laudable that the hotels stepped up in the early stages of this immigration wave, but now we are almost two years in and need to adjust our approach because we have wasted a lot of time.” Still, all of this points to a healthy hospitality environment. And one sees it in other parts of retail and hospitality, too, with an upswing even in [cities like San Francisco](, which some have written off as crime-ridden for years. As far as fancy retail and hospitality is concerned, [private clubs]( are on the rise; and luxury automotive makers like Ferrari are [signing leases]( for showrooms or, in Mercedes-Benz’s case, [lending their imprimatur]( to luxury buildings. Retailers are doing so well, in fact, that a number of them are [buying their own real estate](, which should make for an interesting read this on this first Sunday in March. 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 03/03/2024