Sunday Summary: NYCB — Banking Made Uneasy

It’s been a whirlwind week for New York Community Bank, to say the least. The [$110 billion bank was fighting for its life]( after its stock price cratered to less than $2 per share, a whopping 83 percent decline since January, and trading was halted. The Queens-based lender was in a tough spot as it faced losses tied to its rent-stabilized multifamily portfolio, increased regulatory scrutiny and a large uninsured deposit base. That led some in the commercial real estate and financial industries to posit that NYCB would likely be [going the way of Signature Bank](. And, as we all tried to make sense of what the bank’s next steps would be, it got a [$1 billion lifeline from a group of investors]( tied to former Treasury Secretary Steve Mnuchin. That deal came with a catch. Alessandro DiNello was ousted as CEO of the bank and replaced by Joseph Otting, the former comptroller of the currency during the Trump administration. DiNello had lasted only six days ([less than some other famous quick firings](). With all the turmoil at the bank, we’d be lying if we weren’t a little bit paranoid about the news changing before publishing this week’s Sunday Summary. (Full disclosure: We write these gems on Friday.) As of Friday afternoon, NYCB’s shares had recovered a little bit to $3.59 a share and [Otting said he was working on a new business plan]( set to debut in late April to turn around the struggling bank. Speaking of upheavalThere’s been plenty of movement among the ranks in brokerages recently as it’s been [commercial real estate’s busiest era of big-name turnover in 20 years](. While stars like Darcy Stacom and Robert Knakal have left their brokerages — CBRE and JLL, respectively — those same brokerages have also used this distressed market as a chance to bring in some fresh faces, at a nice discount. “If you’re trying to acquire new talent, doing it when the market is doing fantastically well is much more difficult and expensive,” Woody Heller, a founding partner of Branton Realty Services, told Commercial Observer. “I think that firms looking to grow are always seeking to embolden their bench, and this is certainly a moment for them to do that.” JLL, moreover, has been taking this time to move away from the traditional star broker model and [instead has been leaning toward an investment banking approach to business](. “In an investment bank, the client comes first, the firm someone works for comes second, and the individual comes third,” JLL New York Chairman and President Peter Riguardi said, while sipping on a Diet Coke in his office in December. “In the real estate service industry, the client comes first, but a lot of times — especially in brokerage — the individual comes second, and the company comes third. You’re not going to survive at JLL unless you feel like JLL comes second.” And Riguardi wasn’t kidding about not surviving. While those comments were made before Knakal left the company in February, sources told CO the investment sales broker’s participation in a New York Times article that focused solely on his vast collection of property maps did not fall in line with JLL’s new approach. Meanwhile, [Stacom released some more details on her new venture](, Stacom CRE, after her decades at CBRE. She plans to launch it on April 1 out of a Midtown office space she’s currently finalizing. And she isn’t looking to target big-name brokers with big teams, instead looking to make “a 10-broker shop,” Stacom told CO. We’ll always have Paris deals Regardless of what company brokers have on their business cards, there have been plenty of deals getting done this week. Michael Kors [renewed its 203,000-square-foot headquarters at 11 West 42nd Street](; Betterment [subleased 113,422 square feet from weight-loss app Noom]( at Five Manhattan West; and Revel leased 26,520 square feet at 90-10 Ditmars Boulevard to build [a 48-space electric vehicle charging station near LaGuardia Airport](. Plus, Ferrari continued its drive into SoHo by taking 7,000 square feet to [open an office at 568 Broadway](. The luxury car company only recently [took 3,700 square feet nearby]( at 92 Prince Street to open an apparel and accessories store. On the sales end, Ken Griffin of Citadel, along with Rudin Management and Vornado Realty Trust, went into contract to purchase the air rights above the landmarked St. Bartholomew’s Church for $78 million, which [they plan to use to help build a new 51-story office building at 350 Park Avenue](. And, if you’re in the market, the industrial building at 500 10th Avenue near Hudson Yards just [went up for sale for around $250 million](. Sutton impactIt’d be safe to say there are very few people [who had a happier 2023 than Jeff Sutton](. His Wharton Properties netted a cool $1.8 billion on three deals — all closing within weeks of each other — and the number gets closer to $2 billion if you factor in a fourth sale in August. Sutton kicked it off in August selling the retail components of 747 Madison Avenue to the family office of vacuum mogul James Dyson for $135 million. Then Sutton kept the streak going by selling 724 Fifth Avenue and 720 Fifth Avenue for a combined $835 million to Prada. If that wasn’t enough, he then sold 715-717 Fifth Avenue to Kering for $963 million. Not too shabby. But it’s not just New York owners getting some good news: [Continuum Partners got put on the fast track]( by California Gov. Gavin Newsom for its massive $2 billion mixed-use development in Downtown Los Angeles. Finally, us journalists always love a good headline — think [“Ford to City: Drop Dead”]( or [“Headless Body in Topless Bar”]( — to get people to read our work. We’ll leave you with one of our own to end the week, “[A 5-Brother, $10B, Decades-Long Battle Built on Diamonds and L.A. Real Estate](.” Happy Sunday! [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 03/10/2024