Weekly Market Report - April 21, 2026
- 5 days ago
- 10 min read
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Tech talent remains strong in New York City, with job growth in finance and continued demand for office space. Tech talent drives NYC market.
New York City maintains strong office momentum, attracting top-tier tech talent, particularly in finance and insurance sectors. The NYEDC indicates that January saw the addition of 10,600 private sector jobs, with securities positions reaching a historic high. This influx of tech talent boosts demand for office space, positively impacting landlords who are optimistic about filling vacancies in both office and residential markets. The trend aligns with major tech hubs where demand for AI-related roles drives leasing activity. Employers like J.P. Morgan are heavily investing in new office developments, enhancing market confidence. Despite some relocations to Florida and Texas, JLL’s research shows NYC's retention of skilled workers remains robust, with a significant influx further supporting commercial real estate growth.
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Cyrus and Darius Sakhai snap up another Midtown East office property
Cyrus and Darius Sakhai’s Sovereign Partners are set to acquire the 40-story office building at 575 Fifth Avenue for approximately $380 million. This price is comparable to what MetLife paid in 2005. MetLife had previously sold a 50 percent stake in the property to Beacon Capital Partners in 2015. The sale follows two attempts to market the property, with an initial listing price above $400 million. Previously, in spring 2022, only the 500,000-square-foot office condominium was available for sale. The current deal also includes a 40,000-square-foot retail condominium. The building is 87 percent occupied and is located near Extell Development's planned project. Sovereign Partners has been active in Midtown East, recently acquiring other properties, including 2 Grand Central Tower for $273 million and 780 Third Avenue for $178 million.
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Brooklyn's investment sales market is showing strong growth in the first quarter of 2026, as per TerraCRG's report. The borough recorded 324 commercial transactions totaling around $2.2 billion, marking a 15% rise in transaction count and a 77% increase in dollar volume from Q1 2025. While transaction numbers remained stable compared to the previous quarter, dollar volume increased by 13%. Notably, this quarter is one of only ten since 2016 to surpass $2 billion in total volume, the last being Q4 2024.
Greater Downtown Brooklyn led with about $533 million in volume and 51 deals, followed closely by Central Brooklyn with roughly $502 million and 64 transactions. Mixed-use buildings were the most active asset class with 131 transactions, while industrial deals accounted for about $558 million. Noteworthy transactions included Emerald Group’s $161.5 million acquisition of the Boro Park Center Nursing Home and Camber Property Group’s nearly $80 million sale of an affordable housing portfolio. Overall, Brooklyn continues to attract diverse investors, with increasing demand and a steady stream of inventory entering the market.
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Across nearly 100 transactions, $3.7B in deal volume unfolded
Manhattan's commercial property market has rebounded significantly, reflecting a robust first quarter with 92 transactions and $3.7 billion in total trades, a 37% increase from last year's $2.7 billion. The multifamily market particularly surged, reaching $1.07 billion, a 141% rise year-over-year, representing nearly half of all deals. If this momentum continues, multifamily sales could increase by 145% year-over-year. The office sector also performed well, leading the city with 22 sales totaling $1.8 billion. Overall, New York City's sales volume increased by 23% from the previous quarter, amounting to $5.68 billion across 182 deals. The second quarter shows promise, highlighted by Namdar Realty Group's contract to buy a significant office building for around $280 million, bolstered by strong investor interest and market clarity post-mayoral election.
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SL Green's earnings report showed a paradox of increasing office leases alongside a declining stock price, reflecting the challenges faced by major commercial landlords in New York City. The company recorded significant leasing activity in a robust Manhattan office market, predicting a 95% lease rate for its 30 million-square-foot portfolio by year-end. Evercore ISI analyst Steve Sakwa noted that business remains strong, yet SL Green’s share price dropped 3% to approximately $40, marking a nearly 50% decline over 18 months despite low vacancy rates in its prime properties like 280 Park Ave. and 1 Vanderbilt Ave.
This trend is shared by other major office landlords in Manhattan, with both the Empire State Building's owner and Vornado Realty Trust experiencing similar stock value declines. Concerns over potential job losses due to AI and rising tenant improvement costs are compounding these issues. While SL Green leased a record 929,000 square feet at an average of $105 per square foot, investor expectations were not met, and disappointment arose over the lack of new property sales announcements beyond previously disclosed transactions. The company also reduced its dividend payout by 20%, further impacting investor sentiment ahead of a scheduled management conference call.
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Cushman & Wakefield has filed a lawsuit against Sotheby’s in New York State Supreme Court, alleging that the auction house failed to pay a $10.2 million commission linked to the sale of its former NYC headquarters. The brokerage contends it facilitated the sale to Weill Cornell Medicine, which purchased the property for $510 million in October. Although Sotheby’s covered the commission for the lease, it reportedly did not pay the sale commission stipulated in their written agreement.
Cushman claims that Sotheby’s neglected to notify them of the sale to prevent their involvement in the commission, constituting a breach of their agreement. Following a rejected invoice, the brokerage alleges that Sotheby’s withheld funds to address financial difficulties, including a significant mortgage from 2020. Sotheby’s plans to utilize the sale proceeds for debt reduction and renovation efforts. In response, a Sotheby’s representative dismissed the lawsuit as “baseless,” asserting confidence in their defense and anticipating vindication in court.
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The e-commerce giant would cut back the packages it ships through USPS by 20%, less than the proposal the sides had discussed earlier
Amazon.com and the U.S. Postal Service (USPS) have reached a tentative package-handling agreement, averting a potential two-thirds reduction in packages sent through the agency. Instead, Amazon will cut shipments by 20%, maintaining over 1 billion packages annually for USPS. This change comes as the Postal Regulatory Commission reviews the deal. While the USPS heavily relies on Amazon, generating around $6 billion in revenue last year, the 20% cut could adversely impact its finances.
Amazon, which shipped nearly 15% of all USPS packages, encounters challenges in rural areas if dependent on alternatives like FedEx and UPS, who have been cautious about their Amazon dealings. Amazon had anticipated increasing volumes with USPS under a new contract, but the USPS’s new bidding process led to their proposal for reduced volume. The USPS, facing significant financial losses over the years, seeks to establish the market value of its services amid ongoing competition with Amazon Logistics.
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Office buildings in the U.S. are being sold at drastically reduced prices due to a lack of recovery in the commercial real estate market post-Covid-19. Some properties have lost up to 90% of their value, leading to substantial losses for private owners and government entities. For instance, a Chicago developer purchased a 485,000-square-foot office for $4 million, down from its 2013 price of $68.1 million. Similarly, a Denver Energy Center complex sold for $176 million in 2013 and was bought last December for just $5.3 million.
The General Services Administration also sold a 940,000-square-foot property in Washington, D.C. for $24 million, to be repurposed for residential use. The decline in office space value stems from a shift to remote work, with many workers spending less time in offices. However, properties in metropolitan areas like New York and San Francisco continue to see increased rents and profitable sales, while the number of distressed buildings has risen significantly.
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Kaufman purchased 450 Seventh Avenue in 1946
The Kaufman Organization has secured $42 million to refinance Nelson Tower, a 46-story Art Deco office building in Midtown Manhattan. Apple Bank provided the financing. The deal attracted Apple Bank due to Nelson Tower’s strategic location in the Penn District and favorable leasing metrics in Midtown, along with Kaufman’s experience and low asset leverage. Niedermayer described the building as a prime Midtown asset with strong tenancy and a reliable sponsor. Located at 450 Seventh Avenue, Nelson Tower opened in 1930 and was last renovated in 2019. Kaufman Organization has owned it since 1946, investing in improvements like a new lobby, modern elevators, and a rooftop terrace. Steve Kaufman emphasized that the tower has been a significant asset for decades and is set to gain from the $7 billion Penn Station redevelopment starting in 2027, which he believes will further enhance the property’s value.
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A platform company under Apollo Global Management has signed a 10-year lease for nearly 50,000 square feet across the 14th and 15th floors at 590 Madison Avenue. This agreement follows Apollo's prior lease of about 100,000 square feet spanning the 10th through 13th floors, also at the RXR-owned building. The new lease is part of a strategy to consolidate Apollo’s New York City workforce within 590 Madison, alongside its headquarters at 9 West 57th Street. Employees will be relocated from 3 Bryant Park and other offices at 1350 and 1370 Avenue of the Americas.
While the specific rent was not disclosed, it is expected to exceed $120 per square foot, with the average Midtown Plaza District asking rent noted at $95.68 per square foot. Leasing success at 590 Madison since it joined the RXR portfolio, highlighting the building's quality and location as appealing to top companies. The identity of the Apollo affiliate involved remains undisclosed. RXR acquired the building for approximately $1.1 billion in August 2025 from the State Teachers Retirement System of Ohio.
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North America the lone region where the convenience store is retreating
The status of 7-Eleven in North America is under scrutiny as it anticipates a net loss of 440 store locations this year, according to a financial disclosure from parent company Seven & i Holdings. With 645 closures expected, only 205 new openings will offset this significant reduction. This year's net difference surpasses the previous two years combined, marked by a net reduction of 251 stores last year. The chain has been closing underperforming locations since before the pandemic, losing over 40 stores in New York City from 2019 to 2025. In contrast, Seven & i Holdings plans to add over 200 locations in Japan and others in China and Australia. Despite over 13,600 stores remaining, foot traffic in North America declined, even though spending remained steady. Rising labor costs, rent, and competition from chains like Wawa and Buc-ee’s pose additional challenges for 7-Eleven moving forward.
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Sonder's bankruptcy in November resulted in 101 job losses across its 11 properties, impacting boutique hotels and mid-sized towers in Manhattan, Brooklyn, and Queens. The Financial District's 1 Platt St. faced the most significant layoffs, with 43 employees affected. Sonder leased about half of this 416-unit tower owned by Silverstein Properties. Another major landlord, the Moinian family, saw 19 layoffs from their two Sonder sites, which total around 400 rooms. Following Sonder's Chapter 7 bankruptcy filing, the Moinians sued to reclaim control of their properties and recover $10 million in unpaid rent, although Justice Joel Cohen halted the case pending the bankruptcy proceedings.
Additional properties impacted included locations in Midtown (7 layoffs), Long Island City (5 layoffs), and Gowanus (4 layoffs). Founded in 2014, Sonder had a licensing agreement with Marriott International that was terminated in November after accusations of defaulting, which contributed to its collapse. Despite this, some Sonder sites are reopening under new management, such as The William in Midtown and Belvilla District 6 in Long Island City. The WARN filings confirmed all layoffs were finalized by January 29, though reports were not released until recently due to delays in WARN database updates. Attempts to reach Sonder representatives and legal counsel for comment were unsuccessful.
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Rithm Capital is making moves across Paramount’s old New York City office portfolio
Rithm Capital, an alternative asset manager led by Michael Nierenberg, is actively engaging in capital markets following its acquisition of Paramount Group's office portfolio. The firm has secured $282.5 million to refinance its stake in 1325 Avenue of the Americas, a prominent 34-story, 825,000-square-foot office building in Midtown Manhattan formerly part of Paramount's portfolio. J.P. Morgan Chase provided a nonrecourse commercial mortgage-backed securities loan, structured as interest-only with five-year fixed-rate debt at 6.6%. The refinancing will pay off a $205 million prior loan from J.P. Morgan and address $25.3 million in outstanding expenses, with Rithm contributing $4 million in equity.
The building, notable for its granite and glass design reminiscent of nearby Art Deco architecture, features a public atrium and a lobby with impressive ceiling heights. Currently, it is 89.7% leased to tenants including McGraw Hill and the Major League Baseball Players Association. This move is part of Nierenberg’s strategy to transform Rithm from a mortgage-servicing REIT to a leading alternative asset manager, growing its assets from $2.7 billion to $63 billion over 13 years. Rithm is also seeking a joint venture partner for 1301 Avenue of the Americas, another major office property.
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A city program offers new incentives for buildings with less than 100 units—and developers have gotten creative to squeeze in bigger projects
New York City's 2024 tax exemption program incentivizes developers to create apartment buildings with fewer than 100 units that include affordable housing. Developers building larger properties face stringent requirements, including higher wages and more rent-stabilized units. Many are exploiting a loophole, creating complexes of interconnected buildings with 99 units or fewer to circumvent these regulations. Despite incurring costs for separate entrances and facilities, the potential for lower taxes and reduced compliance makes this strategy appealing. In 2025, permit applications for 50-99 unit buildings tripled compared to previous years. Critics argue this undermines the program's intention, pushing for regulatory changes. City officials express awareness of potential loopholes but currently show no signs of altering the program. Developers claim that limiting units is crucial for economic viability in a challenging housing market, with many citing difficulties in financing larger projects under the new regulation.
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