Well, it didn’t take long.
You would think that after Adam Neumann’s spectacular explosion at WeWork, he would just lay low for a while and count his millions. (Yes, Neumann, you have a golden parachute!) Well, if you were thinking that, you clearly don’t know Neumann.
This week it was revealed (first through the the Wall Street newspaper) that the co-founder of WeWork puts on $ 1 billion in multi-family purchases across the country, in places like Miami, Atlanta and Nashville.
We have to give Neumann credit for one thing – he did exceptionally well when the market was good. And maybe that’s what he’s smelling right now.
Because you could easily forget about working from home, the omicron, and everything else related to the pandemic if you just focused on leasing New York.
The grandpa of the week was the announcement that Morgan Stanley takes 400,000 square feet at Fisher Brothers’ Park Avenue Plaza, 55 East 52nd Street. Now that is the way to start a new year!
But there were also several other monster offers. Touro College announced that it was taking a whopping 243,000 square feet to a new campus at… Times Square? (An unusual venue, perhaps, for a college.) The school rented third through ninth floors (with pieces from the first and second) at 3 Times Square from Rudin Management. (At least, students are sure to get real-time lessons in commercialism, performing arts, popular culture, chain retailing, aggressive sales tactics, and naked cowboys.)
Signature Bank added a whopping 168,310 square feet to its existing footprint at Empire State Realty Trust’s 1400 Broadway, bringing its total presence to 280,182 square feet in the building.
But even without the 100,000-square-foot whales, there was a ton of other rental activity: Global Holdings signed two new tenants (fintech firm Ridgeline Apps and communications firm APCO Worldwide) and into renewed and expanded two others (the law firm Gunderson Dettmer Stough Villeneuve Franklin & Hachigian and the data security firm Varonis Systems) at 1250 Broadway for a total of 75,000 square feet of leases.
At 817 Broadway, venture capital firm Union Square Ventures landed a 13,500 square foot lease. The law firm Glenn Agre Bergman & Fuentes signed a 27,230 square foot lease at 1185 Avenue of the Americas of SL Green Realty Corp. And it wasn’t just the offices that were moving either; Sprüth Magers, the contemporary art gallery with outposts in London, Berlin and Los Angeles signed a lease for 2,234 square feet at 22 East 80th Street.
Speaking of Adam Neumann, WeWork picked up a pretty likeable member this week: Current, a provider of mobile banking apps, took an additional 29,000 square feet on a WeWork site at 620 Avenue of the Americas.
You can raise your glass to all this activity. And take the drink home. Because it was one of the new (or, in fact, relaunched) initiatives that New York Governor Kathy Hochul mentioned in its state of the address state this week, as well as proposals for an Interborough Rapid Express, the lifting of state-imposed ceilings on residential density and the overhaul of the 421a tax incentive for development.
As for renting outside of New York?
Well we were really upset (in a bad way) when we found out that a quarter of all offices was available for rental in Los Angeles in early 2022.
That was according to a new report from Savills, which said LA added about 2.4 million square feet of empty office space to its inventory last year. And the market has seen 34% fewer rentals in 2021 than in 2019. While parts of the city like Burbank are only 10% empty, other areas like Miracle Mile and Playa Vista are over. 30%.
But, if we take the power out of the equation, there are still huge deals going on in Los Angeles.
For example, the Deka group just paid $ 54 million for a Santa Monica Whole Foods at 2121 Cloverfield Boulevard.
SoCal industrial is, to use a cliché, on fire. Like, a fire with five alarms… or at least three. Walton Street Capital paid $ 70 million for a warehouse of 182,620 square feet in the Empire of the Interior (alarm one). A fully leased industrial park in the San Gabriel Valley just traded for $ 108 million (alarm two). And Rexford just spent $ 270 million on eight properties (alarm three).
Plus, multi-family offerings still hit eight digits, like West Covina’s 200 Twelve31 apartments, which sold to investor Ron Nasch for $ 80.4 million, about $ 37 million more than the seller, Benedict Canyon Equities, which he bought for in 2016.
Say hello to my little business!
Miami Beach’s two-story spot at 728 Ocean Drive – the site of the infamous scene where Angel, Al Pacino’s friend, is chainsaw dismembered in “Scarface”And now houses a much less offensive CVS pharmacy – was sold for $ 30.9 million.
But these are peanuts compared to Starwood sale of Westland Mall for $ 149.4 million to Centennial Real Estate Acquisition, which is more than any retail deal signed in Miami last year.
But that doesn’t mean Starwood is done with Miami; Thursday the property investment fund recovered the standard hotel in Miami Beach for $ 62 million.
And Starwood isn’t the only national real estate agency to buy and sell in South Florida; Private investor Chaim Freeman picked up Beach Place, a seven-acre, 308-unit apartment complex at 17101 North Bay Road in Jamestown for $ 110.6 million. (Jamestown is happy. According to property records, that’s three times what he paid for the resort in 2009.)
Look to the capital of our nation
We almost forgot that this week served as a sad milestone (the first anniversary of the storming of the United States Capitol) in the whirlwind of activity underway in Washington, DC.
Lincoln and Cadillac Fairview Property spent $ 82 million recover the office that housed the Department of Homeland Security, which they plan to convert into apartments.
In Glenarden, Maryland, Urban Edge Properties contributed $ 193.4 million to buy Woodmere Towne Center, a 712,000 square foot shopping center, from Heritage Partners, who initially developed the property in 2010.
Finally, Thor is spending $ 42 million on West Gude Labs, three properties of offices and flexible spaces in Rockville, Maryland, which the company plans to convert to a dedicated life sciences space.
Time for reflection
While you are well settled in your home this Sunday, there is something to think about for the still young 2022.
For your Sunday readings, can we suggest three things:
First, lenders expect continued growth in 2022 … With some attrition from the weakest office buildings.
Second, do you remember all those billions of dollars of venture capital invested in proptech in 2021? That’s what they spend it for.
Third, read about the New York City Council Speaker Adrienne Adams. (Real estate could have done a lot worse!)
See you next week!