Weekly Market Report - September 9, 2025
- Broker Support
- 8 minutes ago
- 5 min read
***
Leasing activity surged 40% as Deloitte, Amazon inked mega-deals
In August, Manhattan's office market saw significant activity despite the city's beach exodus. Tenants leased 3.7 million square feet, marking over a 20 percent increase from July and a 41 percent rise year-over-year.  The largest lease was Deloitte’s 807,000-square-foot space at 70 Hudson Yards, the largest new office development since the pandemic began. Amazon's 259,000-square-foot expansion at 1440 Broadway followed as the second-largest lease, with space managed by WeWork. Piper Sandler’s 136,000-square-foot lease at 1301 Sixth Avenue ranked third.
If this trend continues, Manhattan could surpass 40 million square feet leased for the year, a first since 2019. The availability rate fell to 15 percent, the lowest since January 2021, due to rising tenant demand and landlords pulling large spaces for conversions. Midtown South led the demand with 2.2 million square feet leased, fueled by Deloitte and various other deals. In contrast, Downtown lagged, recording only 191,000 square feet leased, its weakest month since December, contributing just 5 percent to the overall demand.
***Â
Del Vecchio family selling Madison Avenue development site for $160M
SL Green is set to buy the former Brooks Brothers location on Madison Avenue for $160 million, with plans to develop it into an 800,000-square-foot office tower. The site, near One Vanderbilt, is a strategic addition to the company's portfolio as they focus on prime locations for new developments. CEO Marc Holliday emphasized the urgency of securing a large development site this year, marking it as a top priority. The building, which has served as Brooks Brothers' flagship since 1915, was previously owned by Claudio Del Vecchio, who is now selling it. SL Green’s previous projects include significant developments like the Metropolitan Life Building and One Vanderbilt. Additionally, other firms like BXP and Vornado are advancing their own office projects in Manhattan, signaling a resurgence in local office development. The Brooks Brothers acquisition would mark SL Green's first major project since its recent expansion.
***Â
Norges Bank acquires majority stake in all-cash deal for Midtown office
Norges Bank Investment Management successfully completed the acquisition of 1177 Sixth Avenue in Midtown Manhattan for $571 million, announced on Labor Day. Teaming up with Beacon Capital Partners, Norges holds a 95 percent ownership stake, while Beacon takes on the remaining share and property management. The all-cash deal reflects a price of $571 per square foot for the 47-story, 1 million-square-foot office building, which will continue operating as an office space. Eastdil Secured facilitated the transaction, expected to finalize soon. Silverstein Properties and the California State Teachers’ Retirement System were the sellers, having previously acquired the property for $860 million in 2021. Tenants include law firms and investment firms, with recent leasing activity noted. Additionally, earlier in the year, Norges invested $1.07 billion for a minority stake in a portfolio of warehouses across multiple states.
***Â
Owner requested transfer as $425M mortgage maturity looms
The $425 million mortgage for 32 Sixth Avenue, an office building in Tribeca controlled by Rudin Management, has been transferred to special servicing, requested by Rudin due to imminent maturity default. The 28-story property, which matures in November, is grappling with declining occupancy, now at 57% as of June, partly due to the pandemic's impact. Notable tenants like CenturyLink, Dentsu, and AMFM have downsized or relocated, prompting Rudin to seek a loan modification while remaining current on payments. In 2021, Rudin collaborated with Industrious for a flex-office space on the 13th floor. Rudin, a major real estate dynasty in New York, controls about 14 million square feet and is transitioning operations to the fourth generation, with Bill and Eric stepping back for their children, Samantha and Michael.
***Â
Affinius Capital and 3650 Capital provided financing for trio of outer-borough properties
Prime Holdings Group secured a $156 million refinancing for three self-storage properties in New York's outer boroughs from Affinius Capital and 3650 Capital, replacing a $147 million loan from 2022. Prime acquired the portfolio for $187 million in 2017. Affinius provided $120 million of the new financing, with the remainder from a junior mezzanine loan by 3650. The refinancing, arranged by Drew Anderman and his team at CBRE Capital Markets, broadens Prime's footprint in a growing asset class, enhancing portfolio diversification.
The loan covers three facilities with over 7,200 units: a 104,200-square-foot property in Brooklyn, a 96,400-square-foot facility in the Bronx, and a 158,300-square-foot space in Queens. Interest in self-storage has surged among investors, driven by demographics and low vacancy rates, with New York City experiencing a 0.7 percent vacancy rate. The asset class benefits from long occupancy durations and increasing familiarity among lenders, according to Anderman.
***Â
Mystery buyer purchasing 3 East 54th Street for $188M
Charles Cohen is divesting more Midtown Manhattan properties as lenders exert pressure on the troubled landlord. Following his agreement to sell 623 Fifth Avenue, Cohen has reached a deal to sell 3 East 54th St. for $188 million, according to a court filing by David Fogel of Cohen Brothers Realty. The 19-story tower, encompassing 300,000 square feet, sold for $627 per square foot and had an $85 million mortgage, with an internal valuation of $109 million; Cohen held a 63% stake. This transaction is part of Cohen's efforts to raise cash after a court ordered him to personally repay $187 million to Fortress.
The sale only partially addresses his financial obligations. By the end of last year, Cohen was valued at $2 billion, down nearly $1 billion from the previous year, with liquid assets of $200 million. Fortress highlighted that these sales indicate Cohen's overvaluation of his real estate portfolio. The 54th Street property may evolve from an office building into a hotel or residential site. Additionally, Cohen is marketing 622 Third Avenue, which has a $400 million mortgage, as Fortress seeks to recover over $500 million that Cohen allegedly defaulted on, amid accusations of asset shifting that he denies.
***Â
Joseph Jerrome’s firm has been seeking to collect from former tenant and its founder for years
Alex Shchegol and ASA College faced significant legal challenges after missing rent payments in 2020, leading to a lawsuit from JEMB Realty. ASA College, which expanded to nearly 160,000 square feet in 2013, became embroiled in controversies, including multiple misconduct accusations against Shchegol and deceptive marketing practices. After a New York state court awarded over $18 million against them in 2022, Shchegol attempted unusual legal maneuvers, allegedly transferring assets to his wife to avoid judgment. JEMB accused him of fraudulent transfers and argued that his legal strategies were aimed at evading payment. Amid complex litigation, ASA filed a lawsuit against JEMB, claiming interference led to loss of accreditation. However, the lawsuits have now settled, allowing JEMB to recoup funds, and ASA’s location has been taken over by Yeshiva University. JEMB recently secured a $300 million refinancing for the Herald Center property.