Weekly Market Report - October 14, 2025
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The city's retail market reported a strong third quarter, maintaining a record low availability rate of 14.2%, matching the previous quarter's figures. Significant leases included Chelsea Piers acquiring nearly 50,000 square feet at 200 Varick St., Aldi leasing 25,000 square feet at 312 W. 43rd St., and Uniqlo taking 19,250 square feet at 860 Broadway. Additionally, Ikea purchased 529 Broadway in SoHo for $213 million, planning to open a store there. The total number of available spaces remained at a record low of 195. Average asking rent decreased to $577 per square foot, consistent with the first quarter, reflecting a 5.9% year-over-year increase but still below pre-pandemic averages.
Among Manhattan corridors, Madison Avenue from East 57th to East 72nd had the lowest availability at 8%, while 34th Street/Herald Square had the highest at 38.9%. Upper Fifth Avenue commanded the highest rent at $2,254 per square foot, while Flatiron/Union Square had the lowest at $277 per square foot. Notably, Times Square saw a decline in average asking rent, now at $1,229 per square foot. Williamsburg reported an 11.7% availability rate and an average rent of $322 per square foot.
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JPMorgan Chase's new megatower at 270 Park Ave. in Midtown is set to open later this month, marking the culmination of one of New York's priciest construction projects. Jamie Dimon, the bank's CEO, is creating a multi-block campus that will serve as a significant base for JPMorgan, contributing around $1 billion towards renovating the nearby former Bear Stearns offices at 383 Madison Ave. The bank’s portfolio in the area totals nearly 6 million square feet across multiple properties, reflecting its growing presence in the city. As JPMorgan expands, it invests in reshaping the urban landscape, demonstrating its influence amidst shifting political dynamics.
The bank's valuation currently surpasses that of its major competitors combined, fueled by record profits over recent years. Dimon has overseen a substantial increase in the bank’s balance sheet, establishing JPMorgan as a financial leader. The new headquarters will accommodate about 10,000 employees and embodies Dimon's vision for a functional, well-designed workspace. As the bank adapts to expanding needs and fluctuating office policies, it continues to solidify its status as a vital player in New York's financial scene.
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Marty Burger and Andrew Heiberger are initiating a significant office-to-residential conversion project in Midtown South, investing nearly $70 million in the redevelopment of 29 W. 35th St. They acquired the office building for around $25 million, planning to transform it into 107 studio apartments. This project is part of a growing trend where struggling office properties are being repurposed into housing in New York City, addressing the pressing need for residential options. The studios will vary from 400 to 575 square feet, featuring flexible spaces like home offices and alcoves. This conversion follows recent zoning changes in the area and boasts a rooftop amenity space with a movie screen and game areas.
The decision to focus solely on studio layouts aligns with the building’s design and local demand. The building will include 27 below-market apartments, available for $1,701 monthly under a new tax-incentive program, while market-rate units are expected to rent for approximately $4,000. Leasing is expected to start in the first quarter of 2027. Financing has been secured from Allegiant Real Estate Capital, with key equity partners involved in the project.
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A Rhode Island hospitality firm, Magna Hospitality Group, has sold four Manhattan hotels for approximately $489 million, marking one of the largest recent transactions in the hotel sector and indicating a recovery for an industry still affected by the pandemic. The properties include the Hilton Garden Inn, Motto by Hilton, DoubleTree by Hilton, and Fairfield Inn & Suites, with sale prices of about $222 million, $115 million, $99.8 million, and $52.3 million, respectively. Each hotel offers room rates ranging from $337 to $577 per night, contributing to a collective total of over 1,100 rooms.
Magna retains a minority stake in these properties after selling more than 90% of its equity. Notably, the Motto is the largest among the sold hotels, featuring 374 rooms. While the deal signals a positive trend for New York City's hotel industry, industry experts acknowledge that conditions remain weaker than pre-pandemic levels, emphasizing the need for continued recovery. Magna still owns other properties in the city, including hotels near Times Square and on W. 37th St.
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Top 4 office leases in September combined exceeded 1M sf
September saw significant office leasing activity in New York City, with the largest four leases exceeding one million square feet. Key deals included Guggenheim Partners' 360K sf renewal at 330 Madison Avenue and Salesforce's 310K sf expansion at 3 Bryant Park. Scotiabank leased 205K sf at 660 Fifth Avenue, while Bank of New York subleased 192K sf at 1 World Trade Center. Other notable leases were made by the Department for the Aging, Massumi + Consoli, Nagarro, MSQ Partners, Breaking Ground, and Insight Global, indicating a robust market and notable expansions across various sectors.
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A property at 128 Wooster St. in SoHo has been sold for $10.5 million to 126 Prince LLC, potentially paving the way for larger developments in the area. The deal included a $7.9 million mortgage from Derby Copeland Capital. The building, located at the corner of Wooster and Prince streets, stands five stories tall and contains approximately 3,750 square feet of residential and commercial space. Estée Lauder has recently leased space in the building for a boutique, although the sale's impact on this lease remains unclear. The property had been owned by the same family for over 40 years before the transaction.
Real estate expert Jesse Hutcher suggests that the buyer may seek to enhance the property's value rather than demolish it, despite the recent rezoning aimed at increasing development activity in SoHo. Since the 2021 rezoning, few major projects have advanced compared to other neighborhoods like Gowanus. City estimates indicate that rezoning could bring over 3,000 housing units to SoHo within ten years. Noteworthy upcoming projects include a 104-unit development at 130 Lafayette St. and a 98-unit project at 30 and 32 Thompson St.
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In 1996, Alan Greenspan warned of “irrational exuberance” in markets. A notable transaction involved Simon Property Group, which borrowed money at an interest rate just 82 basis points above the 10-year Treasury bond—remarkable for a mall developer seen as a riskier borrower than the U.S. government. Recently, Simon borrowed $1.5 billion with a spread of only 89 basis points over comparable Treasury yields, surprising even real-estate finance professionals. This low-interest borrowing coincides with record-high stock market levels and a Federal Reserve rate cut, encouraging investment in riskier assets.
According to Bank of Montreal, commercial real estate debt issuance surged to $3.2 billion last quarter. While some analysts question the stability of this credit environment, others view Simon's borrowing as a testament to the resilience of U.S. consumers, suggesting that investment risk perception is shifting. Other developers like BXP also benefit from low-interest rates, recently borrowing $850 million at 2%. Despite underlying issues in commercial real estate, such as rising delinquency rates and stagnant stock prices, bond investors remain optimistic, raising questions about whether this exuberance might ultimately lead to adverse consequences.
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Convene Hospitality Group will lease over 50,000 square feet at Terminal Warehouse, becoming the first tenant in the $2 billion West Chelsea project. This development has been in progress for years and is still seeking to fill the majority of its space amid a fluctuating commercial real estate market post-pandemic. The Convene space, set to open in the second quarter of next year, will span three floors and is designed for formal events such as galas and awards ceremonies. It will function as a lounge and conference center for other potential tenants.
The venue will accommodate up to 550 guests and feature a reception lounge, grand event hall, VIP suites, and a gallery area, operating under the independent brand The Mallory, named after the original architect of the 1890s property. The site, purchased for $880 million in 2018, aims to transform the warehouse into a 1.3 million square foot office-retail project, comparable to Chelsea Market. Convene's lease details remain undisclosed, but asking rents in the area are competitive. This marks the company’s 18th location in Manhattan. Founded in 2009, Convene has expanded its footprint across the U.S. and U.K., despite recent layoffs and previous overinvestment issues.
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Bilt Rewards, a financial-technology firm known for its rental rewards platform, is relocating its headquarters to the Meatpacking District in Manhattan from Bond Street. This move follows a significant valuation increase, with the company valued at $10.8 billion after raising $250 million in July. The new location at 837 Washington St. comes with a 15-year lease signed on Sept. 17 and plans to create 625 new jobs, supplementing the existing 200 roles. Bilt CEO Ankur Jain emphasized the company's commitment to New York as a hub of innovation. The renovated office, set to open early next year, will include a public Bilt-branded café and is owned by Nuveen, a TIAA unit.
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President clashed with Illinois gov’s family over finances, Grand Hyatt hotel
President Donald Trump’s recent call to imprison Illinois Governor JB Pritzker continues their prolonged rivalry, stemming from a decades-old dispute over the Grand Hyatt hotel in New York, which began in 1992. The conflict arose when the Pritzker family sought costly upgrades while Trump was financially vulnerable. Tensions escalated when Trump accused the Pritzkers of civil racketeering to oust him from the ownership deal, a claim they denied. A lawsuit ensued, which ultimately led to the Pritzkers purchasing Trump’s share for $140 million. Their animosity reignited as Pritzker questioned Trump’s mental health amidst ongoing debates about crime and immigration, especially after a controversial federal raid in Chicago that resulted in numerous arrests.
Governor Pritzker condemned Trump’s deployment of National Guard troops in Chicago as unconstitutional, prompting a lawsuit against the federal action. Recently, Trump claimed both Pritzker and Chicago Mayor Brandon Johnson should be jailed. Additionally, JB’s sister Penny Pritzker, former finance chair for Obama's campaign, continues the rivalry, now engaging in disputes over antisemitism claims at Harvard, where she holds a senior position. The feud reflects broader questions about governance and immigration policies affecting Chicago and the political landscape.
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Hudson Square location adds to fitness chain’s expansion push
Chelsea Piers Management is expanding in New York with a new lease of over 48,800 square feet at 200 Varick Street in Hudson Square. Plans for the space remain undisclosed. This expansion follows the company’s established upscale Chelsea Piers Sports & Entertainment Complex along the Hudson River, which covers 28 acres and includes various sports facilities. Chelsea Piers also has locations in the Flatiron District and Brooklyn. Although the duration and rent rate of the Varick Street lease have not been revealed, average retail rents in Manhattan are $671 per square foot. The brokers involved in this deal have not been identified, and representatives from all parties have declined to comment. Additionally, in 2023, Chelsea Piers secured a 29-year lease for 72,000 square feet in Long Island City, with construction resuming on a development meant to provide 600 residential units.
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Steve Witkoff and Jared Kushner played key roles in Trump's Middle East negotiations
Steve Witkoff and Jared Kushner, real estate developers turned advisers to President Trump's administration, played pivotal roles in facilitating a ceasefire agreement between Israel and Hamas. Their negotiations with Benjamin Netanyahu’s government were marked by intensive discussions and strategic planning, with Kushner likening the process to real estate deals involving complex dynamics. Arriving in Egypt to engage with mediators, they focused on persuading Hamas to disarm and secure the release of Israeli hostages captured in October 2023. In preparation for potential pitfalls, Kushner and Witkoff considered various scenarios that might derail the agreement.
They highlighted the importance of understanding human interactions in negotiations, suggesting that their background as "deal guys" differentiated them from traditional diplomats or academics often involved in such discussions. Criticism of Kushner and Witkoff's roles has emerged, with concerns about their motivations being more personal than political and the potential for business benefits due to their connections to wealthy funding sources in the Middle East. Senator Chris Van Hollen urged Kushner to shift focus from deal-making to addressing political and human rights concerns in the region. This agreement, the second ceasefire of the year, raised further questions as reports indicated that Israel continued its military actions shortly after the deal's announcement.
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Developers plan to convert 29 West 35th Street into 107 studio apartments
A Midtown office building at 29 West 35th Street, which previously failed to attract bidders at auction, has been sold for $25 million. Developers Marty Burger and Andrew Heiberger plan to convert the 85,000-square-foot structure into 107 studio apartments, supported by financing from Allegiant and 400CM, with equity partners David Levinson of L&L and Terracotta Management. This project is one of the first office-to-residential conversions under the recently approved Midtown South Mixed-Use Plan, which spans 42 blocks and aims to create over 9,500 housing units.
Colliers’ Zach Redding highlighted the building's strategic location within the rezoned area, although the deal was initiated before the rezoning approval. The property was acquired from LNR, which took possession after the previous owners defaulted on a loan. The new plan includes a tax abatement and will feature 27 affordable apartments around $1,700 monthly. Apartments will range from 400 to 575 square feet, with flexible layouts. Amenities will include doormen, a pet washing station, and a rooftop with game tables and a movie screen. The conversion design will be led by Ismael Leyva Architects.
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Top 10 leagest deals include Soho, Grand Central spaces
Last month’s largest retail leases included a significant supermarket lease in Jamaica, Queens, followed by two leases in Soho. 1) SuperFresh secured 22,500 sf in Jamaica at Ruby Square, Real Estate and BRP Companies. 2) Lululemon signed for 19,000 sf at 524 Broadway, moving from 520 Broadway.3) Restaurateur Amit Upadhyay leased 17,000 sf at 622 Third Avenue for a new Indian restaurant. 4) Abercrombie & Fitch took 16,000 sf at 520 Broadway, stepping into Lululemon’s former space. 5) Prime Liquidation signed 12,000 sf in Flatbush. 6) Calzedonia secured 8,400 sf in Soho. 7) Sephora inked a lease for 7,800 sf in the East Village. 8) Pop Mart signed for 7,000 sf in Times Square, followed by Corner Bistro and From the Source with smaller leases in East Village and Soho.
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More than $250M in equity to be infused by investors
Nine months after RXR acquired a 49 percent stake in 1211 Sixth Avenue, it has arranged a $1.45 billion recapitalization for the Midtown Manhattan office building. This deal extends a $1 billion debt from Apollo Global Management due to mature in June 2028. It includes new equity investments ranging from $250 million to $400 million from familiar investors such as the Baupost Group and Liberty Mutual. Planned expenditures include $130 million for tenant improvements for Fox News, $110 million for space vacated by Ropes & Gray, $61 million for capital expenditures, and $54 million for additional tenant improvements. Fox and News Corp. have agreed to extend their lease, occupying a total of 1.2 million square feet until 2042, despite Ropes & Gray’s recent relocation that freed up 300,000 square feet. The building currently has an 88 percent occupancy rate.
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Office of General Services adds 66K sf at Midtown property
Less than a year after acquiring over 50,000 square feet at 919 Third Avenue, the state is expanding its space at the Midtown Manhattan building by signing a 15-year deal for an additional 66,000 square feet. This agreement raises the state’s total occupancy to more than 117,000 square feet in the SL Green property. The expansion, covering the building’s top two floors, has an asking rent of $85 per square foot. The 1.5 million-square-foot office property is now fully leased. Notably, New York State's Executive Chamber had previously signed a seven-year lease for 53,000 square feet to house Governor Kathy Hochul’s office. The Office of General Services evaluated 40 potential buildings before selecting this site. The leasing demand on Third Avenue has surged this year, contributing to a significant shortage of large, quality spaces. Overall, Manhattan's leasing activity illustrated a marked increase compared to previous years.
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Landlord would be first high-profile prison sentence for tenant harassment
New York City officials view the indictment of landlord Meyer Chetrit on felony tenant harassment charges as a significant advancement in enforcing landlord standards, moving beyond administrative penalties to possible criminal repercussions. Manhattan District Attorney Alvin Bragg expressed hope that this action would encourage compliance within the industry. Chetrit is accused of harassing a rent-regulated tenant, facing two felony counts that could result in up to four years in prison. His attorney denied the claims, while Bragg noted Chetrit's history of inadequate living conditions at his properties, which remain despite previous penalties from city agencies.
Jocelyn Strauber, from the Department of Investigation, believes that taking such cases to trial might deter landlords from calculating risks based only on fines. Tenant harassment, according to Ashley Viruet from Legal Services of New York City, remains prevalent, and she doubts one case will significantly alter landlord behavior. Historically, landlords facing similar issues have either avoided prison or been penalized for other offenses. Notably, previous cases like Daniel Ohebshalom's incarceration for failing to improve living standards highlight the ongoing challenges in addressing landlord compliance in New York.