For Maefield Development’s 20 Times Square, a $900 million CMBS debt has been moved to a specific servicer.
According to Commercial Observer, the loan went into special servicing on November 3 after defaulting as a result of a $26.8M lien filed against the property.
The 42-story building, commonly known as 701 Seventh Avenue, has four deals that make up the loan’s remaining balance. The development of a hotel at the mixed-use property and numerous foreclosures are apparently the causes of the liens.
A 452-key Marriott International hotel called 20 Times Square briefly opened in August 2019; its shutdown a year later was blamed to the pandemic.
According to The Real Deal, the loan was initially provided to Maefield by the French bank Natixis in 2018 with a May 2023 maturity date. According to Commercial Observer, the property’s 99-year ground lease, revenue from the hotel, the four floors of retail space, and electronic billboards in Times Square all acted as collateral.
The National Football League had a 43K SF experiential store in the area that shuttered in 2018, not long after it had opened, and it was intended to be the property’s retail anchor. According to Commercial Observer, the NFL’s rent at the time of the underwriting would have been $8.25M annually.
Maefield’s lease on its own building was pledged as collateral when Natixis financed the deal for Maefield and Fortress Investment Group to buy out its investors and acquire full ownership of the property in 2018. However, Natixis and a group of foreign investors foreclosed on the property when Maefield and Fortress missed payments on their leasehold debt. The lender selected SL Green to oversee the 350K SF building at auction this year with plans to reopen the hotel wing of the structure.
According to information from the Korea Herald, a group of lenders, including institutional Korean investors and Korean banks KB Kookmin, Hana, and NH Nonghyup, are owing roughly $150M in mezzanine debt on the property.
Numerous marijuana dispensaries might not learn whether they can start operations in New York for at least another two weeks.
In the courtroom, four veterans contended that state legislation had not been followed when evaluating their applications for cannabis licenses. One of the categories given higher consideration by state authorities when deciding whether to provide a cannabis license is veterans. The state Office of Cannabis Management, or OCM, prioritizes people with prior marijuana convictions in New York over veterans, though. All of these soldiers have perfect records.
The state organization in charge of issuing licenses is OCM. The state lawmakers simply authorized guidelines for conditional licenses, the assistant attorney general said in court on behalf of OCM, and left it up to OCM to decide how licenses are actually awarded. The judge said the two sides must cooperate to ensure that no one is harmed by the license application procedure but refrained from rendering a decision.
Spectrum News reported that Hal McCabe, the Cannabis Association of New York’s interim executive director, released a statement in which he expressed disappointment with the court’s decision today and stated that “this injunction continues to threaten tens of thousands of jobs, thousands of businesses, and the entire industry as a whole.”
He stated, referring to corporate cannabis companies, “It really is them and their interests against the entire New York State licensed marijuana cannabis market.” That’s how easy it is. Right now, we are experiencing a true David and Goliath moment right now.”.
An empty office building in Lower Manhattan will be filled with more than 1,300 apartments, making it the largest residential conversion project in the nation, according to its owners. The Daily News and JPMorgan Chase previously occupied the building at 25 Water St., but they left before the pandemic. The 22-story building’s offices have been demolished, courtyards have been created, and 10 further floors have been added under long-standing regulations that facilitate residential conversions in the Financial District.
The owners haven’t submitted the residential layout for final approval to the city’s Department of Buildings, but as long as the new design complies with zoning and building regulations, receiving city clearance is merely a formality in Lower Manhattan office conversions. Both Mayor Eric Adams and Governor Kathy Hochul assert that these conversions can boost the availability of homes in areas like Midtown and Flushing, Queens, but first the state must modify zoning regulations.
The state budget that is presently being debated by politicians in the state takes those modifications as well as a new office conversion tax incentive into account. According to architect Eugene Flotteron, whose business is creating the floor plans for 25 Water St., repurposing an office building is typically quicker than building a new one from the ground up. The units should be open in around two years, according to the developers. However, it is more difficult to convert water coolers and cubicles into beds and kitchens. It’s also not cheap. According to GFP Real Estate CEO Brian Steinwurtzel, the building’s owners GFP Real Estate and Metro Loft intend to scoop out two courtyards from its middle and encircle them with apartments. That will enable the structure to meet the needs for light and air.
This editorial appeared recently in Crain’s New York Business.
Illegal smoke shops are out of control in the city. It makes sense to call on landlords to help stymie their proliferation by requiring them to not knowingly lease their storefronts to such vendors.
The illegal market has quickly outpaced the legal market. According to senior reporter Aaron Elstein, there are about 8,000 unlicensed stores citywide, compared to just 21 licensed retail dispensaries across the state. Only five of those are located in the city, according to the state’s Office of Cannabis Management.
It’s understandable how the problem grew so quickly; landlords were eager to lease shuttered storefronts to paying tenants during the pandemic, and there wasn’t exactly a surplus of takers to choose from. Plus, no one anticipated that the rollout of cannabis licenses would be so glacially slow.
Landlords can now be fined up to $10,000 for knowingly renting store space to illegal cannabis sellers under a new law that went into effect Aug. 14. Under the two-strike system, if a raid finds illegal activity, the sheriff’s office will first notify a landlord that they are renting to an illegal business. If the store is found to still be operating in subsequent inspections, the landlord will receive a $5,000 fine. For each subsequent failed inspection, the landlord will get fined an additional $10,000.
This was a wise move by the city, as the problem has reached a point where the private sector must step in to make sure the underground industry does not get even more out of hand. Plus, officials have taken initial steps, like raids to seize the illegal goods themselves, before they decided to involve landlords.
It’s encouraging that the Real Estate Board of New York is also in favor of the legislation, with Steve Soutendijk, co-chair of REBNY’s New York retail committee and commercial broker with Cushman & Wakefield calling it a “commonsense law” which will “keep bad actors out of commercial spaces and help ensure that real estate brokers and property owners are working with properly licensed retail establishments,” at a recent press conference.
Landlords are generally not allowed to lease their spaces to illegal businesses, and smoke shops selling much more than bongs are no exception.
Not only are many smoke shops engaging in illicit activities, they are undercutting the legal cannabis business which was designed to infuse more money into the state’s economy while decriminalizing marijuana and aiding equity goals.
Ideally, the state will become quicker at getting licenses into the hands of cannabis retailers so that they can conduct business legally. Until then, the city must use all tools available to keep the smoke shop issue at bay.
By Reggie Thomas, Senior Vice President of Government Affairs•, April 25, 2023
MEMORANDUM IN OPPOSITION A4781 (Mamdani)/S2783 (Brisport)
AN ACT to amend the real property law, in relation to prohibiting landlords, lessors, sub-lessors and grantors from demanding brokers’ fees from a tenant.
The Real Estate Board of New York (REBNY) opposes this legislation, which seeks to eliminate the ability for residential real estate agents to collect a commission in those instances when the agent represents the property owner. While couched in terms of protecting renters, this will only increase rents and make it more difficult to work with the licensed professionals who are best able to help renters navigate a complicated market. This legislation is of grave concern to the entire residential real estate community and should be of concern to renters as well.
Pursuing a unit where a property owner has engaged the services of a real estate agent is ultimately a decision that the renter makes. There is zero obligation for any renter in New York City to choose a unit with an agent’s fee attached. As an industry and as a State, we need to ensure that all renters have options when they look to find their new home. But it is important to note that a “no-fee” listing simply has the cost included in the rent.
It is currently a choice as to whether the property owner chooses to incorporate these necessary broker services into the rent (leading to a higher monthly rent for the length of the lease) or chooses to have it structured as a one-time cost. And for a renter, it is ultimately a choice of whether they prefer to look for a unit with these fees already incorporated into their monthly rent or choose to spend this one-time cost when they have found their new home.
Real estate agents provide an invaluable service to prospective tenants and property owners, ensuring that vacant units are filled as soon as possible. An agent’s full suite of services and assistance includes paying for marketing, facilitating showings, conducting market research to help the owner price apartments, advising on improvements, organizing application materials, and guiding tenants through a complicated and often stressful process. Rather than earn a salary, real estate agents receive commission fees which are often their only compensation for innumerable hours and effort, as well as direct costs associated with the listing process, not to mention their considerable expertise. The high cost of advertising listings and constant travel to showings between boroughs comes directly out of the agent’s own pocket.
Eliminating these types of broker commissioners needlessly hurts thousands of New York residents, often renters themselves, who work hard to make ends meet in New York City. Despite the perception on popular but glamorized TV shows, data shows that the starting wages for New York City real estate agents are about $53,000 per year. These starting wages are less than 60% of New York City’s area median income and would qualify many agents for affordable housing. That agent wages grow to about $100,000 annually on average with experience demonstrates that the job of a real estate agent is the type of opportunity in New York City that offers a pathway to the middle class, including for those who may not have a college degree.
We fully appreciate and support the sponsors’ intent of making rentals more affordable for New Yorkers and protecting tenants in these transactions. Unfortunately, this bill will have the opposite outcome to its intentions and will ultimately hurt both renters and the livelihoods of hardworking New Yorkers.
As an initial matter, the fees that agents collect are negotiable, and the Department of State has never established any fixed prices for these services. In fact, in the Department’s Real Estate Education Campaign, they specifically note that “commission fees are negotiable. You have the right to negotiate the amount of the commission to be paid to a broker or salesperson. There is no such thing as a mandatory commission rate.”
Further, whatever fee the agent does ultimately collect in these transactions is a one-time cost for the renter. Eliminating this type of transaction would result in unintended consequences, including property owners raising rents to cover costs or no longer hiring experts to handle these transactions that require quality services. When this fee is incorporated into rent rather than paid as a one-time expense they result in higher base rents for tenants, which can compound over time given that many tenants stay in the same unit for many years. In fact, this is just what happened in 2019 when the Department of State erroneously eliminated these fees and properties that were impacted saw a sudden increase in rental prices. Should this bill move forward, prospective renters will only face higher monthly housing costs.
This dynamic poses a particular challenge for rent-regulated units given that rent increases in these units are limited to what is allowed by the Rent Guidelines Board. As such, these expenses would essentially become entirely borne by the owner. With owner’s costs already rising and allowable rent increases not keeping up with those costs, this will result in an additional burden that will discourage much needed investment in the city’s one-million rent-regulated housing units.
A practical implication of this legislation is that it may result in more property owners doing work that was previously done by real estate agents. This would potentially weaken the ability to uphold fair housing standards as State law requires real estate licensees to take fair housing and implicit bias training to ensure that prospective tenants are not subjected to discrimination or harassment. This includes mandatory education in implicit bias, cultural competency, fair housing, and ethical business practices. Property owners do not have the same training requirements as agents, nor do they have the same experience. As such, this legislation could unintentionally weaken the legislature’s efforts to strengthen the State’s fair housing regime.
The Real Estate Board of New York believes this legislation will needlessly raise rents and hurt the ability for residential real estate agents to be fairly compensated for their tireless efforts. We look forward to working with the bill sponsors toward any efforts to promote transparency and understanding for renters in a responsible way.
New housing will be allowed in parts of Midtown Manhattan for the first time in decades under a plan announced by Mayor Eric Adams on Thursday. The mayor wants to update zoning rules to allow for the construction of new apartments in a 42-block area stretching from 23rd Street to 40th Street and from Fifth Avenue to Eighth Avenue, which is currently designated for manufacturing use. The start of the rezoning effort joins another proposal from the Adams administration to facilitate and expedite office-to-housing conversions across every borough, as the city continues to face a housing shortage.
Map of proposed Midtown South rezoning areas courtesy of NYC Planning
Under the so-called Midtown South Neighborhood Plan, the city would update zoning rules to transform four areas in the neighborhood into a dynamic, live-work community with affordable housing and good jobs.
The plan also includes the exploration of opportunities to convert non-residential buildings into housing, boost economic growth, support local businesses, and create jobs. The public outreach process will begin in the fall.
“In central Manhattan where new housing is currently not allowed because of outdated zoning, our office conversion and reimagining Midtown South increase our housing supply and they help our economy to flourish by revitalizing our business districts, which are our city’s economic engine,” Adams said during Thursday’s press briefing.
“To expedite office-to-residential conversions citywide, the mayor said zoning changes would allow office buildings constructed before 1990 to convert to housing; currently, the cut-off is 1961 or 1977, depending on the area. Doing this would free up 136 million square feet of office space across the city to become apartments, although the city notes the decision remains with the property owner.
The changes would also allow for a variety of housing types, including supportive housing, shared housing, and dormitories.
Early this year, Adams estimated converting underused offices could create 20,000 homes for 40,000 New Yorkers over the next decade.
“It makes no sense to allow office buildings to sit empty while New Yorkers struggle to find housing. By enabling office conversions, New York will reinvigorate its business districts and deliver new homes near jobs and transit,” Maria Torres-Springer, Deputy Mayor for Housing, Economic Development, and Workforce, said.
Adams on Thursday also launched the new Office Conversions Accelerator, a program led by experts from across city government, to work with building owners to speed up the conversion process. The panel of experts hailing from the city’s Department of Buildings, Department of Housing Preservation and Development, the Board of Standards and Appeals, and the Landmarks Preservation Commission, will utilize the city’s resources to help building owners complete complex conversion projects.
“With a proposal to rewrite zoning regulations so unused office space can become homes for New Yorkers, it’s unbelievable how much empty office space we have sitting idly by with ready and willing participants to develop the housing, and we are in the way,” Adams said during a press briefing Thursday.
“Well, it’s time to get out of the way so we can turn these office cubicles into nice living quarters so that we can address the housing crisis we have.”
In December 2022, Adams and Gov. Kathy Hochul revealed their plans to transform Manhattan’s central business districts into dynamic neighborhoods in order to prepare the city for a post-pandemic world. While all of the city’s business hubs in the outer boroughs have experienced a speedy economic recovery since the end of the pandemic, Manhattan’s business centers, in Midtown and Lower Manhattan, have lagged behind mainly due to the lack of workers, many of whom have started working from home.
As part of the city and state’s plan, zoning restrictions will be amended to create new, flexible residential areas that will be more “live-work-play” rather than following the same policies that have shown to be no longer suitable for a post-pandemic world.”
RXR, one of the New York metropolitan area’s largest owners of Class A office and multifamily residential communities, is pleased to announce a 25-year lease extension with global law firm Davis Polk & Wardwell LLP (Davis Polk). As part of the renewal, Davis Polk will be expanding its footprint at 450 Lexington Avenue by an additional floor, adding 30,000 square feet. The firm’s new footprint at the building will be over 700,000 square feet, constituting the largest lease in New York City in 2023 to date.
The 40-story Class A office tower, located conveniently near Grand Central Terminal between 44th and 45th Streets, is in a prime transit-oriented submarket that continues to be an attractive office destination for current and future employers. 450 Lexington was completed in 1991 and remains one of the newest and most impeccably maintained properties in midtown.
“Davis Polk’s long-term commitment to 450 Lexington Avenue is another example that New York City’s office market is here to stay,” said RXR Chairman and CEO Scott Rechler. “As the needs of employers and the nature of work evolves, we are working constantly to ensure our spaces are keeping up with those changing demands. We are thrilled that Davis Polk has once again committed to making 450 Lexington Avenue its home in New York City.”
In connection with the lease, RXR and its partners are investing over $300 million for extensive capital improvements throughout the building common areas and across Davis Polk’s 23 floors. The planned renovations will encompass the full modernization of lobbies and workspaces, including the addition of numerous amenities inside of Davis Polk’s premises focused on improving employees’day-to-day experiences and addressing their evolving needs.
Overall, the entire building will see extensive upgrades in the lobbies and elevators that include modern and timeless aesthetics that are harmonious with the building’s historic structure. Renovations are being designed by global architecture, design, and planning firm Gensler. New space configurations, lighting, finishes, and added architectural features such as striking stone, glass, and wood materials will complement feature ceiling elements and modern glazed entryways.
“We are thrilled that 450 Lex will continue to be our long-term home going forward and we are grateful for RXR’s collaboration in reaching a mutually acceptable outcome in the context of a challenging and difficult market environment,” said Neil Barr, Davis Polk’s Chair and Managing Partner. “We are embarking on a truly exciting, complete renovation that will transform the look and feel of our office and offer the Davis Polk community a uniquely modern, welcoming and collaborative space.”
The building’s “Sky Lobby” will also receive a full remodel. It will include private outdoor terraces and Loggia spaces for Davis Polk featuring new indoor/outdoor space, operable doors, seating, and planting. Additionally, Davis Polk will create new gathering spaces, meeting spaces, and culinary options throughout the firm’s premises.
“RXR is delighted to continue our longstanding relationship with Davis Polk,” said William Elder, EVP, Managing Director of RXR’s New York City Division. “450 Lexington Avenue is a dynamic asset with floorplates that allow for adaptability and creativity. Through our planned enhancements and infrastructure updates for the entire building to enjoy, including the reimagined offices and enhancements for Davis Polk’s headquarters, this office tower will continue to serve as a modern workplace destination.”
By Arya Sundaram, The Gothamist, Published Aug 15, 2023
Arya Sundaram/Gothamist
A sprawling tent city for 1,000 migrants was set to open on Tuesday afternoon in the parking lot of a state psychiatric hospital campus in Queens.
New York City hospital system and emergency management leaders said they expected to welcome 100 migrants to the grounds of the Creedmoor Psychiatric Center by the evening.
The cluster of weatherized tents was erected in 10 days, and officials said there aren’t yet clear plans for how long they’ll be in place. Only single adult male migrants will be housed there. State leaders approved the use of the space and will foot the bill, city officials said during a tour of the site Tuesday.
More than 150 new arrivals slept in line overnight outside the city’s main intake center for migrants late last month, a scene that caught the attention of national news outlets. Some migrants said they waited as long as five days outside the Roosevelt Hotel in midtown to register for help from the city.
“We’re here today because we’ve received help from the state,” Ted Long, senior vice president of Ambulatory Care and Population Health at the city’s hospital system, said at the Creedmoor site Tuesday. “The word for today is ‘collaboration,’ with New York state. And this facility is critically important to have more collaboration like that, so we never have to form a line again.”
Hundreds of new migrants have continued to arrive daily for the past few months, according to Fabien Levy, the city’s deputy mayor for communications. Some 60,000 are currently staying in the city’s care.
Dozens of rows of head-to-toe brown cots line the floor of a massive tent at the Creedmoor Psychiatric Facility migrant center.Arya Sundaram/Gothamist
The pace of new arrivals is speeding up even as fewer migrants are crossing the U.S.-Mexico border.
Plans for the tent city spurred dueling protests, drawing hundreds of people this weekend. Some were in opposition to the plans, citing concerns about security and safety. A smaller rival group looking to welcome the newcomers also staged a counter-protest, Pix 11 reported.
Levy said while protestors are allowed to voice their opinions, they aren’t allowed to come on the property. He pointed to the security guards stationed on the premises 24 hours a day, and seven days per week.
“For those who are criticizing, we are out of good options. We are out of OK options. These are the only options left,” Levy said. “It’s a question of ‘Do you want people sleeping on the street, or do you want people sleeping on a cot?’”
In a massive tent at the Creedmoor site Tuesday, dozens of rows of head-to-toe brown cots lined the floor, and thermostats on the walls were set between 70 and 75 degrees. In a separate tent intended as a cafeteria, rows of plastic tables and chairs were set up facing a food buffet station with warming trays, refrigerators and packages of water bottles and Goldfish crackers.
Along the perimeter were several trailers with bathrooms. Some hyper-temporary congregate shelters across the city have contained just a few toilets for hundreds of residents, and one site went without any showers for weeks.
A Q43 bus stop is located on a nearby sidewalk feet away from the shelter entrance, but there isn’t much other public transportation near the site. The closest subway station, the Jamaica-179th Street station, is more than an hour’s walk away, and the closest Long Island Railroad station is about a 30-minute walk. Long said additional buses may be added.
Queens Borough President Donovan Richards has also called on the city to create a community advisory board to work with the city on plans for the migrant shelter on the Creedmoor campus. City officials could not immediately confirm on Tuesday’s tour if such a group would be created.
Separately, the city’s Empire State Development agency is leading a plan to redevelop the Creedmoor campus, and some residents are advocating for thousands of affordable housing units to be built on the property.
The Redbury Hotel, a landmark hotel in NoMad, began housing migrants earlier this month amid the city’s ongoing struggle to house more than 57,000 asylum seekers each night. The Union Square Hospitality Group — run by Meyer — has since confirmed that Marta and Maialino (vicino), which are both located in the lobby of the hotel, will have their last service on August 25.
“As tenants of the Redbury, our two restaurants, which occupy the lobby floor, have been eagerly anticipating the hotel’s full post-pandemic reopening. Now, as the Redbury partners with the City to house asylum seekers, it’s become clear that the timeline for that reopening has been extended indefinitely.”
“While we admire and respect the Redbury’s decision, the viability of our business relies significantly on hotel-related F&B operations, including event venues and the lobby bar, spaces that are now unavailable for our use,” added the statement from USHG.
Meyer has previously advocated for expedited work permits for the tens of thousands of migrants pouring into the Big Apple, saying a labor shortage had prevented him from opening Maialino for lunch service.
“We remain fully supportive of the Redbury’s initiative and will continue advocating for policy change that expedites work permits for asylum seekers,” the hospitality group’s statement said.
Maialino, a restaurant and wine bar that previously operated out of the Gramercy Park Hotel, began doing business out of the Redbury last fall as Maialino (vicino) as Eater first reported.Marta and Maialino (vicino), both located inside the historic Redbury, will reportedly have their last service on August 25.Robert Miller
The second restaurant, Marta, a pizzeria, opened in 2014 when the Redbury was the Martha Washington Hotel. The hotel underwent a rebrand when it was bought for $158 million in 2015.
A spokesperson said the hospitality group was actively looking to find new locations for both restaurants, as well as job placements for all employees impacted by the closures.
A waiter working tables at a packed Marta on Tuesday wouldn’t say if he or his coworkers were upset or angry by the closures, instead insisting they were “figuring it out as we go.”The restaurants’ departures comes as the city struggles to house the influx of migrants seeking asylum in the city.
“We’re all eligible to leave or go to another restaurant that our restaurant group owns,” the waiter told The Post. “They own like 19 other restaurants in NYC. So theoretically, it’s a seamless transition.”
The group owns a slew of top restaurants in the city, including Gramercy Tavern and Manhatta.Migrants recently were forced to sleep outside another Manhattan hotel, which had become full.
It’s no secret that some of America’s largest cities are losing residents. And while New York’s losses slowed in 2022, the nation’s largest metropolitan area has seen substantial declines since the COVID-19 pandemic reshaped the world’s work and leisure habits.
So where is everyone headed? To the American South, it turns out.
According to Census Bureau data, between April 2020 and July 2022, New York’s estimated population slumped from 8.80 million to 8.34 million, a drop of roughly 468,000 residents — nearly 5.3% of the city’s total population. Much of this loss was recorded between 2020 and 2021.
San Francisco lost 7.5% of its residents between 2020 and 2022, accounting for a greater loss of total population than New York.
So where did all those residents land? Census data indicates many went south. Georgetown, Texas saw a huge spike in population: more than 14.4% in 2022 alone. In fact, four out of the top five cities with populations of 50,000 or more that saw the biggest population increases were in Texas.
