top of page

News.

Search

Weekly Market Report - July 23, 2026

  • Jul 24
  • 12 min read

***


In recent years, discussions about the office market in New York have focused on the decline attributed to remote work, yet Manhattan's office sector has shown significant recovery. Manhattan office leasing reached about 42 million square feet in 2025, the highest since before the pandemic. The demand is expected to continue growing, with declining available office space — nearly 30% lower since the post-pandemic peak. Tenants are pursuing higher-quality spaces with enhanced amenities, leading to robust demand, particularly from tech and AI firms, which now represent 19% of leasing activity, significantly up from previous years.


The trend towards premium space is reshaping office construction, with landlords investing considerably in amenities like wellness rooms and collaboration areas. Recent data show that trophy buildings command much higher rents compared to older properties, reflecting a shift in tenant expectations. Renovation projects are increasingly complex, requiring skilled labor for sophisticated designs and systems. Additionally, older buildings are being revitalized through modernization efforts to compete with newer developments, with office-to-residential conversions streamlining market supply.


Ultimately, Manhattan’s office market is evolving, characterized by significant investments in technologically advanced and amenity-rich workspaces, which, although different from pre-pandemic offices, create opportunities for future growth and redevelopment endeavors. Colliers is monitoring about 15 million square feet of upcoming construction and renovations still pending anchor tenants.


***


Brookfield is in exclusive discussions to acquire a 10% stake in Hudson Square Properties, valuing the complex at $3.5 billion. This move aims to enhance Manhattan's West Side's standing as a tech and media hub. Brookfield would also become the long-term operating partner for the 13-building, 6.2 million-square-foot portfolio. The deal is expected to finalize soon. The Hudson Square office district has seen strong leasing activity, particularly driven by tech companies seeking space, with AI firms leading the charge. Recently, Anthropic leased a 16-story building at 330 Hudson St., planning to significantly increase its workforce in New York by 2026.


Office availability in the area has dropped by 3 percentage points since early 2025, while asking rents have surged nearly 20%, exceeding $87 per square foot. Hudson Square Properties has been promoting itself as a tech and creative hub, especially with Google and Disney opening significant headquarters nearby. Despite a 17.1% office availability rate, higher than the citywide average, tech firms are expanding into less saturated Manhattan regions as premium spaces fill up. Brookfield’s partnership with Trinity Church and Norges Bank Investment Management further enhances its investment in the area.


***


Reemerging inflation, high interest rates, and changing consumer preferences are leading to a notable increase in corporate bankruptcy filings, prompting significant real estate portfolio evaluations. U.S. bankruptcy filings surged by nearly 12% year-over-year to 591,850 by March. Chapter 11 restructurings often involve reevaluating real estate, triggering requests from tenants to lower rents or terminate leases, legally permitted without consequences. This dynamic is likened to a high-stakes negotiation game, according to industry experts.


The retail and restaurant sectors are particularly hard-hit by economic pressures, with consumers becoming more health-conscious and financially strained. The consumer price index rose 4.2% in May, marking the highest increase since April 2023, highlighting the affordability crisis felt by over 90% of Americans. Many households struggle to meet financial obligations, shifting spending behaviors while purchasing less despite higher expenditures.Business owners are reassessing real estate to alleviate financial stress, with potential gains in earnings by closing underperforming sites. While some retailers pursue new construction, many grapple with rising costs and economic pressures, leading to bankruptcies.


Notable cases include Popeyes franchisee Sailormen Inc. and Carrols Restaurant Group, which faced lease rejections in bankruptcy proceedings, granting tenants leverage over landlords. The ripple effects of these bankruptcies extend to various real estate sectors.Tenants, especially larger companies, have increased bargaining power during bankruptcy due to legal protections. Smaller businesses face constraints amid high debt burdens and increased filings; however, some manage to reorganize and continue operations. Landlords benefit from timely alerts about tenant bankruptcies, enabling potential tenant replacements with more resilient businesses, reflecting current trends in reshuffling tenant compositions and site evaluations.


***


Mavik Capital Management aims to raise $1B for a new distress fund named VS3, focusing on acquiring distressed commercial real estate assets, including hard assets and commercial mortgage-backed securities. CEO Vik Uppal highlighted a pressing need for capital and restructurings despite stable headline default rates, viewing the current market dislocation as a significant opportunity. Previously, Mavik raised $335M for VS1 and $685M for its second fund, both targeting similar distressed assets. The firm has also acted as an alternative lender amid traditional lenders retreating due to high interest rates. Mavik has over $2B in assets under management and has realized more than 125 investments, deploying approximately $3.75B since inception. The distressed commercial real estate market is drawing investor attention due to post-pandemic shifts and financial stress.


*** 


The New York City Department of Investigation has initiated an inquiry into a Manhattan high-rise where two supporting columns buckled, leading to evacuations and efforts to stabilize the building. The structure, previously Pfizer's headquarters, was undergoing conversion from offices to residential units when issues were spotted on the 21st floor. First responders reported buckled columns and sagging floors, with the building continuing to shift afterward. This conversion project, located on East 42nd Street, is the largest U.S. office-to-residential transition, aiming to create around 1,600 apartments by next year alongside amenities like a rooftop pool and fitness center.


The NYC Department of Buildings plans to review construction plans, interview witnesses, and inspect the site to ensure compliance with approved engineering standards. While developer MetroLoft and collaborators, Grace Consulting Engineers and Domani Inspection Services, are involved, none have been accused of misconduct. Nathan Berman from MetroLoft indicated that the structural damage may stem from additional weight due to changes on the upper floors. Domani maintained its commitment to professional standards amidst the inquiry.


***


The NYC Chapter of CoreNet Global hosted “AI & Blockchain: The New Frontier of Corporate Real Estate” to explore how emerging technologies are transforming corporate real estate practices. The event, held at Corgan’s New York office, featured a panel moderated by Mandy McGill, with experts Dan Silverman, Ubair Javaid, and Evangelos Tzoulafis discussing practical uses of AI, blockchain, and digital twins. They highlighted how these technologies can enhance transaction efficiency, operational visibility, and informed decision-making in real estate.


The panel also addressed the regulatory landscape shaping the industry by 2026 and offered strategies for technology adoption. Sonya Dufner, president of CoreNet NYC, emphasized that technology is becoming a competitive advantage for corporate real estate. The event underscores CoreNet NYC's commitment to providing valuable educational resources for real estate professionals in navigating a technology-driven industry. The chapter serves as a key association for corporate real estate executives in the New York area.


***


SL Green Realty Corp. announced the sale of a 49.0% joint venture interest in 346 Madison Ave. to Japan's Mori Building Co., Ltd., at a valuation of $175.0 million. SL Green retains a 51.0% interest and will manage the development and leasing. The project aims to redefine innovative office spaces in East Midtown, leveraging both firms' expertise. Located near Grand Central Terminal, the new 46-story tower will feature around 850,000 rentable square feet, designed by KPF with cutting-edge, sustainable attributes and wellness certifications. Unique design elements include terrace floors and oversized windows. The amenity-rich structure will host a 215-seat auditorium, a lounge by chef Daniel Boulud, a luxury wellness center, and a world-class restaurant. The collaboration aims to shape a landmark building that enhances New York's skyline and sets a new standard for office development.


***


New York State continues to be a major economic force, but growth is increasingly limited to downstate areas and select upstate urban centers, according to the Citizens Budget Commission (CBC). Many communities outside the opportunity corridor, which includes the NYC metro and Capital Region, continue to experience persistent challenges. The CBC introduced the "Competitive NYS: Value Proposition Tracker," a dashboard analyzing the state's population, economy, taxes, public spending, and education. CBC president Andrew Rein emphasized the importance of competitiveness for growth and quality of life, urging the need for affordability programs and regulatory reforms to attract residents and businesses.


***


Brooklyn's investment sales market experienced its best first half since 2022, with a total of 689 commercial transactions reaching just under $4 billion, reflecting a 15% increase in deal volume and a 38% rise in dollar volume compared to the first half of 2025, per TerraCRG's latest report. CEO Dan Marks noted this was the third-best performing half in the last decade, highlighting the first quarter as extraordinary with over 400 transactions, marking the best-performing quarter in that period. Despite a significant decrease in dollar volume from approximately $2.6 billion in Q1 to $1.4 billion in Q2, the first quarter accounted for nine of the top ten property sales in the half.


Greater Downtown Brooklyn led regions with roughly $964 million in deals, while North-Central Brooklyn topped deal volume with 153 transactions. Mixed-use buildings were the most traded asset type, followed by multifamily properties. Significant transactions included the $161.5 million sale of the Boro Park Center Nursing Home and the Carlyle Group's $145.5 million acquisition of a self-storage facility. Marks expressed confidence in the market's stability and continued appetite for Brooklyn assets in the latter half of the year.


***


“Midnight Cowboy” parallels the situation of Texas developer Thakkar, who attempted to turn a Manhattan office building into apartments after acquiring it for $8.5 million—significantly lower than its previous sale. However, the building's landowner, Safehold, requires rental payments and significant property taxes, which Thakkar has failed to pay. Court records indicate an unpaid annual property tax of $17 million, leading Safehold to pursue property seizure. Thakkar's plans were complicated by a teaming up with Metro Loft, which entered its own agreements with Safehold, resulting in legal disputes. Thakkar’s financial struggles and project uncertainty mirror the classic film's themes of ambition and harsh reality.


***


In June, the hotel industry in New York thrived during the Knicks’ championship run, particularly from June 7 to June 13, coinciding with two home games at Madison Square Garden and a major World Cup match. Lodging rates surged, with average daily room prices reaching around $400, a 17% increase from the same week in 2025, marking the largest jump in the country. Average revenue per room also soared to $358 per night, a 19% year-over-year rise, highlighting the city’s hospitality recovery post-pandemic. However, while the occupancy rate hit 84%—the highest in the U.S.—it fell short of the 88% seen in 2019, influenced by a 93% return of international tourists compared to pre-pandemic levels. Despite a 5% rise in revenue per room compared to 2024, adjusting for inflation indicates a decline from 2019 figures. The borough of the Bronx saw significant hotel growth, adding 21 new establishments. Overall, while 2025 shows improvements, challenges remain for the city's hotel sector.


***


In the late 1990s, Nathan Berman transformed Manhattan's Tyler Building into 111 modern apartments, initiating a boom in office-to-residential conversions as banks vacated older buildings. His firm, MetroLoft, tackled larger, more complex projects, making significant alterations to structures for increased light and space. However, a recent disaster at the Pfizer headquarters project, which aimed to convert the former office space into 1,600 apartments, raised concerns over structural integrity when two columns buckled. Berman stated this incident was a construction issue unrelated to the conversion itself.


As the city's apartment vacancy rate dropped below 2%, there is increased scrutiny on conversion projects, prompting the Department of Buildings to conduct inspections across sites tied to Berman. Despite challenges, city officials and community members support office-to-residential strategies, viewing them as a solution to housing shortages. The demand for rapid housing development intensified during the pandemic as office vacancies surged. Young developers like Berman, who has a unique knack for optimizing layouts, have become central figures in the conversion landscape, even as complications arise.However, past lawsuits, engineering complexities, and the need for rigorous safety assessments highlight inherent risks in expansion projects, prompting calls for heightened diligence in future developments


***


New York developers The Gotham Organization, Fisher Brothers, and Mural Real Estate have been chosen by Gov. Kathy Hochul to construct two towers with 1,127 residential units on a state-owned parking lot in Hell’s Kitchen. The $1 billion project, named Hudson Landing, will be located at 621 West 45th Street and includes two connected towers spanning 1.3 million square feet on a 1.2-acre site near Pier 86. Among the units, there will be 108 for-sale condos, with 28 designated as affordable, while 338 rental apartments will be affordable for households earning 40–130% of the area median income. Pending approvals, a pedestrian bridge will connect the development to the USS Intrepid museum, featuring shops, restaurants, and a 10,000-square-foot park. The project seeks to override local zoning rules for mixed-income housing, as part of Hochul’s 2024 housing policy. Gotham CEO David Picket, along with Fisher Brothers’ Winston and Kenneth Fisher, and Mural's Robin Zeigler, leads the initiative. A construction timeline has not yet been announced.


***


Abramson Brothers is converting its 90,000-square-foot office building at 333 West 52nd Street in Hell’s Kitchen into a 108-unit residential property. The firm, which has owned the building since 1957, has filed plans with the Department of Buildings, with CetraRuddy overseeing the redesign. The project will include ground-floor retail and parking, a co-working space in the lower level, and amenities such as a fitness center and terrace. Adam Abramson plans to utilize the 467m tax incentive program for property tax breaks during the conversion.


While he refrained from further details due to the project's early stages, the plans highlight a trend in Midtown property transformations. Increasing numbers of landlords are converting aging office buildings into apartments in response to fluctuating demand and smaller office footprints. Nearby projects include Yellowstone Real Estate Investments’ conversion of the Watson Hotel to a 249-unit building and Madigan Development’s redevelopment of 45 West 55th Street into a 42-unit residential building.


***


The City Council approved the Monitor Point development on the Greenpoint waterfront, enabling a 1,324-unit project. This decision followed a last-minute agreement by Councilman Lincoln Restler with the developer, Gotham Organization, increasing affordable units from 248 to 662, including 161 for seniors and 110 supportive units for the formerly homeless. Half of the affordable apartments target households earning 30% to 60% of the area median income. Located at 40-56 Quay St., the development will also offer about 50,000 square feet of public waterfront space.


The agreement includes $300,000 annually from Gotham for maintaining Bushwick Inlet Park, and commitments to build public bathrooms and improve accessibility at the Nassau Avenue G train station. Both Restler and Mayor Zohran Mamdani emphasized the benefits for the community and the importance of affordable housing citywide, despite some opposition from residents concerned about the project's scale and benefits. Gotham's president hailed the approval as a collaborative effort to address New York City's housing crisis. Council Speaker Julie Menin affirmed the council’s commitment to creating new homes and vibrant communities moving forward.


***


MetroLoft Management has finalized its acquisition of a 322,000-square-foot office tower at 1 Whitehall St. for $104.5 million, partnering with Quantum Pacific Group and securing a $72.5 million acquisition loan from Apollo Global Advisors. The property was previously owned by the Chetrit Organization, which defaulted on a $156 million note in December and stopped mortgage payments in mid-2023. LoanCore Capital foreclosed on the building in October 2024, facing complications from the death of co-principal Jacob Chetrit. The sale occurred shortly after another MetroLoft project faced scrutiny due to structural issues, where steel columns buckled, prompting a closure of surrounding blocks by the New York City Fire Department, highlighting the risks linked to office-to-residential conversions.


***


A London investor acquired a former safe and lock factory in New York's Meatpacking District for $100 million, intending to transform it into a private club. Caprice Holdings, an Abu Dhabi-based unit, purchased the five-story Herring Building at 675 Hudson Street from Aurora Capital Associates, who bought it earlier for $50 million. The 29,300-square-foot property was financed with a $165 million loan from HSBC. Aurora previously acquired the historic building at $1,706 per square foot. Caprice plans to convert the site into New York's Annabel’s club, pending city approval, after purchasing a majority stake in the club's parent company for $1.8 billion. Proposed renovations include restoring the brick facade and adding a curved glass rooftop, although preservation officials have voiced concerns regarding the design. The Meatpacking District is becoming a hotspot for significant real estate transactions, exemplified by a recent $71 


***


An appeals court on Monday rejected the Real Estate Board of New York’s effort to revive claims against the city’s broker fee bill, known as the Fairness in Apartment Rental Expenses Act (FARE). The U.S. Court of Appeals for the Second Circuit upheld a lower court’s dismissal of claims asserting that the FARE Act infringes on the First Amendment and is preempted by state law. The court also denied REBNY’s request to halt the law’s implementation while the lawsuit progresses. The City Council enacted the FARE Act to minimize renters’ moving costs, including the broker fee, typically 15% of annual rent.


This ruling adds to REBNY’s challenges since the FARE Act's passage in November 2024 and its enforcement in June 2025, which mandates those hiring rental brokers to pay their fees. REBNY argued that the law suppressed broker speech by disincentivizing listing postings, as it implies that a broker was engaged by the landlord. A federal judge dismissed the free speech claims but retained the federal contracts clause claim. REBNY's appeal of the dismissals was affirmed by the Second Circuit, although details on their next legal steps remain uncertain. The FARE Act aims to empower tenants in negotiations while brokers warn of fewer listings and increased rents.

million acquisition by TPG Angelo Gordon and Cayre's Aurora.

 
 
 

Comments

bottom of page