Weekly Market Report - November 12, 2026
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The Financial District office tower at 25 Broadway has shown signs of recovery after being in distress for over two years. After its main tenant, Léman Manhattan Preparatory Academy, halted rent payments in 2024, the property’s cash flow dropped significantly. However, Wolfson Group renegotiated the lease, lowering rent in exchange for a lease extension until 2037. This agreement, alongside a recovery in Manhattan’s office market, improved the tower’s financial situation, allowing it to become current on its debt. The timing is crucial as its $250 million mortgage is due in January.
Vacancy rates in the Financial District, which peaked near 30% three years ago, fell to 21% in Q3, the lowest in five years, driven by increasing demand for lower-cost office spaces. This shift suggests that tenants are returning to the area after previously favoring newer Midtown buildings. Notably, 25 Broadway's leasing activity has improved, marking its best year since 2019. Despite these positive developments, the property remains in special servicing until its mortgage situation is resolved.
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In October, Manhattan office landlords saw the average asking rent rise to $79.47 per square foot, matching pre-pandemic levels from March 2020, according to Colliers. Rents increased by 1.4 percent from September, marking the most significant monthly rise since August 2019, and were up 5.7 percent year over year. Leasing activity surged, with tenants signing deals for 4.54 million square feet, a 54.1 percent rise from the previous month. The year-to-date leasing volume reached 37.39 million square feet, indicating 2026 may be the best year for office leasing since 2000.
Significant leases included Citadel’s 1.05 million-square-foot deal at 350 Park Avenue and Ramp’s 460,000-square-foot extension at 28-40 West 23rd Street. The overall availability rate for Manhattan dropped to 12.3 percent, the lowest since August 2020, with Midtown’s availability also returning to pre-Covid levels. Additionally, sublet supply decreased by 16.2 percent, marking the lowest level since August 2019.
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MetroLoft Management and David Werner Real Estate have secured $231 million in construction financing from Northwind Group for their office-to-residential conversion at 675 Third Avenue in Midtown East. This financing will refinance existing acquisition debt and support ongoing project buildout. Northwind previously provided $90 million in acquisition financing for the venture. Ran Eliasaf of Northwind commented on the project’s straightforward nature, implying confidence in the conversion’s simplicity and addressing concerns from past structural issues at an old Pfizer building where MetroLoft and David Werner are collaborating to create a residential development of around 1,600 units.
David Werner purchased the Third Avenue site for $100 million in April and subsequently filed plans for a 464-unit building, including retail space, increasing the height of the structure from 31 to 35 stories. The development aims to leverage the 467m tax abatement program, designating 25% of rentals as affordable. Northwind recently raised $1 billion for its third real estate credit fund, targeting senior loans for residential and conversion projects, significantly exceeding its initial $500 million goal.
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Aby Rosen's RFR Holding has returned the luxury Soho hotel, 11 Howard, to its landlord, Commerz Real, following a court order. Ennismore, backed by Accor, will now operate the hotel. This movement concludes a contentious legal battle over the hotel's possession, stemming from claims that RFR owed over $18 million in unpaid rent after halting payments in March 2023 and disregarding lease termination notices. RFR counterclaimed, asserting that Commerz breached their lease by seeking buyers despite RFR's right of first offer.
Despite these disputes, Rosen expressed optimism about the hotel's future under the new operator. RFR had purchased the property in 2014 for $89.7 million and renovated it, reopening as the upscale 11 Howard in 2016. Commerz bought the property from RFR for $170 million shortly after, coupled with a long-term lease agreement. However, subsequent tensions arose, leading to disputes over due payments and guarantees. Commerz confirmed the operational transition but chose not to provide additional comments.
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Kushner Cos. has sold a collection of contiguous apartment buildings at a loss exceeding 50%. Acquired for approximately $25.8 million in April 2015, the properties at 234-238 33 St. were sold for $12 million, as per city records. The portfolio includes three 5-story walk-up buildings with around 28,900 square feet, featuring 39 free-market apartments, 18 rent-stabilized ones, and one superintendent unit. Nearly all apartments are occupied, with free-market rents starting in the low $3,000s. The buyer, The Sabet Group, a real estate branch of the Sabetfard family, aims to invest in Prime Manhattan properties for long-term holding, indicating confidence in a market rebound. Rosewood Realty Group’s Aaron Jungreis, Ben Khakshoor, and Alex Fuchs facilitated the transaction. The Sabet Group has previously purchased additional properties from Kushner Cos.
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Sedesco has acquired the historic 35 W. 57th St. mansion, previously a restaurant, for $42 million in cash, finalizing the purchase on Oct. 29 after going into contract on June 26. The 11,300-square-foot building was sold by Soloviev Group, which owns neighboring office properties. Soloviev Group, established in 2021 and headed by Stefan Soloviev, son of the deceased developer Sheldon Solow, had originally purchased the mansion in 2006 for $24.4 million. Sedesco plans to construct a tall mixed-use building, rising 1,100 feet, featuring 119 luxury condominiums, a 158-room hotel, and a 10,000-square-foot restaurant at 41 W. 57th St.
The impact of the new acquisition on these expansion plans is unclear, as Sedesco has not applied for demolition permits yet. With this purchase, Sedesco now controls six contiguous parcels along with an additional site on West 58th Street, encompassing around 27,600 square feet of buildable land. The group has slowly built its presence in the area, starting with its first parcel in 2011, and now also owns commercial condo units at 49 W. 57th St. Meanwhile, Soloviev Group has not commented on the transaction.
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New York City touts itself as the greatest city but faces pressing questions about its priorities, particularly as it promotes housing development at the expense of historical landmarks and community spaces. An October 15 report highlights that significant buildings such as churches and synagogues, integral to community history and identity, lack protection from ongoing redevelopment pressures. The New York Post noted that the push for affordable housing often overlooks critical questions about who the term "affordable" serves and raises concerns about transparency in urban development. As New Yorkers have witnessed neighborhoods transform through gentrification, venues that once fueled the city’s vibrant culture—like clubs and theaters—are replaced by luxury residences, leading to a loss of community character.
The article reminisces about the vibrant social landscape of New York, contrasting it with the exclusive nature of modern private clubs. With the disappearance of key facilities like hospitals, the city struggles to provide essential services alongside housing. The author laments a decline in communal interactions, urging New Yorkers to reconnect amidst the anonymity of urban life. In reflecting on urban vitality, they emphasize the need to balance development with preservation, advocating for inclusive spaces that accommodate the city's diverse residents, thus questioning the long-term consequences of prioritizing profit over culture and community.
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New York City's political landscape is predominantly Democratic, creating tension for real estate donors. Jason Haber and the American Real Estate Association have formed a new organization to gather political contributions and mobilize voters, focusing on advocating for an open primary in New York. Recent reports show significant donations from real estate executives to Gov. Kathy Hochul, in contrast to the minimal support for her opponent, Republican Bruce Blakeman, despite Hochul's support for the pied-à-terre tax, which has left some donors feeling disillusioned.
The real estate sector’s support for Democrats appears strategic, given the Democratic Party's control and their more progressive stances on social issues, fostering an inclusive business environment in New York City. However, the rise of Democratic Socialists has introduced uncertainties, as their agenda may challenge real estate interests. The Democratic Socialists are evaluating their electoral strategies amid growing tensions around housing policy, mirroring the real estate community's reflections on their partisan affiliations and the consequences for their industry.
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Jared Solomon was sentenced to 11 years in prison for orchestrating a $9.5 million leasing scam at Vornado Realty Trust. In court, the 49-year-old expressed remorse, admitting to engaging in fraud and highlighting his lack of a moral compass. Convicted of two counts of bank fraud and one count each of wire fraud and identity theft, Solomon faced a prosecution demand for an 11-year sentence, arguing for a lesser four-year term. Judge Loretta Preska emphasized the need for a lengthy sentence to deter similar crimes.
Solomon, who described a highly pressured work environment, revealed ongoing struggles with mental health and family relationships which deteriorated his judgment. He created fake brokerages to invoice Vornado for non-existent brokerage work, leading to his termination in December 2023 over unrelated performance issues. After being indicted, he was convicted in April. The government plans to seize two properties purchased with the stolen funds, including a $3.6 million apartment and a $4.2 million Westchester home, to recover the embezzled money.
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