Weekly Market Report - April 28, 2026
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Bargains in New York City real estate are rare, but significant opportunities exist in the stock market for prime Manhattan properties. Shares of major office tower owners, including SL Green and Vornado Realty Trust, have dramatically fallen—by nearly 50% and 35%, respectively—due to concerns over AI-induced job losses and reduced demand for office space. However, SL Green recently reported record leasing activity, driven by AI companies securing large spaces.
Investors Isaac Toussie and Amit Yonay see this as an attractive buying opportunity, estimating Vornado should be valued at $63 a share and Empire State at $16. Toussie emphasizes that Class A buildings are currently undervalued, while Yonay views the situation as a classic value investing scenario, noting that the leasing market is already recovering. Conversely, investor Jonathan Litt expresses skepticism, suggesting the market is not flourishing and questioning the future of office space utilization amid shifting work dynamics. An Evercore ISI analysis indicates current valuations are lower than mid-pandemic levels, highlighting investor caution.
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Law firm McDermott Will & Schulte eyeing 150K sf at Midtown tower
BXP's Midtown office tower at 343 Madison Avenue is still years from completion, yet tenants are eager for space, with law firm McDermott Will & Schulte in talks for 150,000 square feet. The deal remains unfinalized. Following a merger, the firm would occupy six floors of the 930,000-square-foot building, as hinted by BXP chair Owen Thomas earlier. However, the combined firm occupies over 480,000 square feet in existing spaces, indicating they won't vacate fully. Starr secured a 275,000-square-foot lease at the same site, marking a significant victory for BXP amid a backdrop of financial strains, including a 30% dividend cut and seeking $50 million in quarterly savings. The project's challenges were exacerbated when Norges Bank withdrew as a partner, but BXP remains focused on completing the all-electric, net-zero building by 2029.
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A section of a Midtown office building near Grand Central is being converted to residential use. Metro Loft Developers, led by Robert Travis, filed permits this week to convert the 15th floor of the 20-story building at 205 E. 42nd St. into 25 apartments across nearly 16,200 square feet. The remaining floors will continue as commercial space. The redesigned 15th floor will feature bike storage and a recreation room. The building was purchased last year for about $165 million by David Werner Real Estate in partnership with 601W Cos., with plans for substantial redevelopment in the area.
Next door, they are converting Pfizer's former headquarters into a large apartment complex with 1,602 units, expected to be the city's largest conversion upon completion in 2027. Metro Loft is also involved in redeveloping another office tower nearby into apartments. The current tenants in the building include CUNY and Serendipity Labs, with office space renting for $54 to $65 per square foot. The Midtown corridor is becoming a residential hub with several projects in progress, but details about Metro Loft's involvement in No. 205 remain unclear.
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SL Green CEO Marc Holliday received $17 million in compensation last year despite a nearly 30% drop in the developer’s share price, raising concerns about executive pay among shareholders. In his letter to shareholders, Holliday emphasized the company’s strong performance, leasing nearly 2.6 million square feet and achieving a 93% occupancy rate in its portfolio. However, shareholder-related metrics revealed a disappointing performance, with the share price down 29% and trading significantly below pre-pandemic levels.
Past opposition to Holliday's compensation has persisted, with a notable 31% of investors voting against his pay recently. High costs for renovations and tenant amenities have also pressured profits despite strong rental demand. Responding to shareholder concerns, SL Green’s board adjusted contracts to ensure compensation is more performance-based. Holliday’s pay included $1.4 million in salary, a 16% decrease from the previous year, further reflecting SL Green’s struggles amid evolving market conditions. He remains optimistic about future demand and cost moderation.
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S&P Global downgraded SL Green’s 1515 Broadway tower, citing concerns about the aging Times Square office building potentially becoming vacant. Paramount Global, the sole tenant, is downsizing and plans to move its headquarters to Los Angeles, prompting worries regarding occupancy. S&P estimates the property’s value at $500 million, less than half of its pre-pandemic worth of $1.1 billion. Refinancing challenges loom as the $675 million mortgage matures in two years. Despite these concerns, SL Green defends the building as a prime asset leased through 2031, with potential for redevelopment into a multi-use project featuring entertainment and hospitality. Following the rejection of a casino proposal by a neighborhood committee, CEO Marc Holliday criticized the decision as cowardly. Demand for office space in Times Square is weaker compared to other Midtown areas, with vacancy rates of 25% in Manhattan’s West Side and 23% in Times Square South, significantly higher than rates along Park Avenue and the Sixth Avenue/Rockefeller Center area.
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The Nine West office building recently scored a record rent for the city. Its gallery boasts works by Picasso and Matisse, and a Catch Hospitality restaurant is on the way
Nine West 57th Street, a 50-story Manhattan office tower, has navigated crises since its opening amid New York City’s 1970s bankruptcy. It faced challenges during the 2008-09 financial crisis and the 2020 pandemic-related market downturn. Despite KKR's departure, the building has regained its status in a thriving office market, competing with newer properties. Owner Stefan Soloviev invested over $50 million in upgrades, including a 20,000-square-foot gym and an art gallery. Recognizing the importance of amenities post-COVID, Soloviev leased restaurant space to Catch Hospitality Group. The tower is close to full occupancy, attracting prestigious tenants like Loews Corp. and Chanel. The vacancy rate for premium Midtown offices improved significantly, signaling a market rebound. Soloviev’s management style contrasts with his late father Sheldon Solow’s tough approach, promoting a more tenant-friendly environment. The future leadership of Nine West remains undecided among Soloviev's many children.
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G4 Capital Partners sells 74 Eighth Ave amid West Coast growth
In Manhattan, strong property sales in the first quarter are followed by ongoing transactions, including an office acquisition in the West Village. Spear Street Capital from San Francisco purchased the 10-story building at 74 Eighth Avenue for $50.5 million, equating to $1,683 per square foot. The seller, G4 Capital Partners, had acquired it for $18 million in 2019. Developed by Sang Lee, Noviprop, and Plus Development and designed by Gene Kaufman Architect, the property includes a Wells Fargo retail space. Spear Street, which manages office buildings in multiple regions, faces challenges in Chicago with a distressed loan linked to a property they bought for $412 million in 2019, where occupancy has dropped significantly. G4 Capital Partners recently expanded to Los Angeles for residential lending, aiming to address market gaps left by traditional banks. Co-founded in 2005, G4 has executed over $5.8 billion in real estate endeavors, including substantial financing in New York.
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Wolfe Landau, founder of Watermark Capital, has acquired the former site of Our Lady of the Rosary of Pompeii in Brooklyn via a 99-year lease from the Roman Catholic Diocese of Brooklyn. The lease, signed by Bishop Robert Brennan, stipulates a fixed rent of $2.2 million for the first two years, with subsequent increases. The site, valued at $17 million, is located at 225 Seigel St., at the border of Bushwick and East Williamsburg, and is set for demolition as the previous church structure was lost to a fire in 2024. Buildings on the property, including a rectory and parish center, will be torn down to make way for an approximately 84,000-square-foot development. David Grunfeld submitted permits to raze the existing structures and, along with Joel Wieder, is noted as a tenant in the lease. Landau has a history of converting religious properties into residential developments, with other projects in Williamsburg and Greenwood Heights. The future plans for this particular site remain undisclosed, as Watermark has not provided comment on the matter.
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A full-service hotel near Times Square, the Distrikt at 342 W. 40th St., is now for sale after U.S. Bank acquired it for just $100 at a foreclosure auction. The previous ownership group defaulted on $46 million in debt, leading Rialto Capital Advisors, the special servicer involved, to list the 155-room property. Sales are expected to conclude by the end of September, amidst declining New York tourism since February and a 3% drop in the city’s hotel occupancy rate this year. The New York City comptroller's office cites bad weather and geopolitical uncertainty as contributing factors to this trend.
Concerns arise regarding lower-than-expected bookings from international visitors during the upcoming World Cup. Developed in 2010, Distrikt was built at a cost of $46 million by Victor Afonso and Scott Schroeder and struggled even pre-pandemic due to the strong U.S. dollar affecting overseas bookings and nearby hotel constructions diminishing guest experiences. Additionally, an annual rent of $825,000 owed to the landowner contributed to the ownership group’s financial issues. Rialto began controlling the hotel’s revenues in 2017, moved to foreclose in 2020, and ultimately led to the auctioning of the property in 2024 on the New York County Courthouse steps.
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Graduate hotel’s ground lease was terminated by Cornell Tech
Roosevelt Island's sole hotel, Hilton's Graduate, is facing legal action from ACRES Capital, which is pursuing $76.5 million following the hotel's cessation of operations and termination of its ground lease by Cornell University. ACRES claims a full recourse guaranty was triggered, leading to a lawsuit against a Graduate-associated real estate fund and AJ Capital Partners, which launched the chain in 2014.
ACRES's lead attorney criticized AJ Capital for shutting the hotel, displacing workers, and abandoning responsibilities to Cornell while leaving the lender liable for approximately $80 million. The Graduate hotel, themed around universities, opened at Cornell Tech’s campus in 2021 and secured a construction loan of $60 million in addition to the loan from ACRES. However, it defaulted on its agreements and failed to maintain financial obligations, leading to the hotel’s closure in November 2025 and the termination of the lease. Now, AJ Capital faces a $79 million liability while offloading other properties.
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Wolfe Landau, founder of Watermark Capital, has acquired the former site of Our Lady of the Rosary of Pompeii in Brooklyn via a 99-year lease from the Roman Catholic Diocese of Brooklyn. The lease, signed by Bishop Robert Brennan, stipulates a fixed rent of $2.2 million for the first two years, with subsequent increases. The site, valued at $17 million, is located at 225 Seigel St., at the border of Bushwick and East Williamsburg, and is set for demolition as the previous church structure was lost to a fire in 2024.
Buildings on the property, including a rectory and parish center, will be torn down to make way for an approximately 84,000-square-foot development. David Grunfeld submitted permits to raze the existing structures and, along with Joel Wieder, is noted as a tenant in the lease. Landau has a history of converting religious properties into residential developments, with other projects in Williamsburg and Greenwood Heights. The future plans for this particular site remain undisclosed, as Watermark has not provided comment on the matter.
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e, a luxury athletic club chain, is set to open a new facility in Williamsburg, Brooklyn, signing a 20-year lease at 83 Wythe Ave. with Double U Development. The lease includes extension options and was formalized by executives from both companies. Double U purchased the vacant lot for $20 million in 2022 and plans to construct a four-story building featuring a lobby, parking spaces, and a fitness center with terraces. Life Time is also developing a significant athletic club at 175 Third St. in Gowanus, showcasing various wellness facilities. While details on the Williamsburg location remain unclear, it is expected to offer similar amenities. Life Time's expansion follows a strong financial performance in 2025, with growth plans for 2026. Double U is active in North Brooklyn, managing various properties in the area. Neither company has commented publicly on the new location.
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