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Real Estate Roundup 12.23.19

Rendering of One Manhattan West (Credit: Brookfield)

Real Estate Roundup

Leasing 

Hedge fund Pharo Management has signed a 14-and-a-half-year lease for 20,024 square feet on the 56th floor of Brookfield’s One Manhattan West. Asking rent on the deal was $130 per square foot. (CO)

Mazars USA is staying put… The accounting and consulting firm has signed a 16-year lease for 90,000 square feet at George Comfort & Sons’ 135 West 50th Street. (CO)

Squarespace is expanding 50,000 square feet on two additional floors to its headquarters at 225 Varick Street. In exchange for committing to hiring 156 new employees, the Empire State Development Corporation is giving the website builder $2.2 million in Excelsior tax credits over the next decade. The property is owned by Trinity Real Estate, Norges Bank Real Estate Management, and Hines. (CO)

Retail 

A few months ago, Brookfield approached some institutions that had previously invested alongside the firm about buying stakes in other malls. The investors declined to make new commitments, arguing it would be too expensive to improve the malls and citing further risk of store closures, among other concerns. The company’s big bet on malls last year is looking riskier than ever as other investors increasingly sour on the sector. In August 2018, the Canadian investment firm closed a deal to buy the two-thirds of real-estate investment trust GGP it didn’t already own. The transaction valued the 125-property portfolio, mostly comprised of malls, at around $15 billion. (WSJ)

Long-form: After years of internal debate about how to compete with Amazon, Walmart boss Doug McMillon took the stage at a recent strategy meeting and revealed the centerpiece of his plan to thrive in an e-commerce era: giant stores… At a recent strategy meeting, McMillon told top executives that giant stores could be the base for new ventures like fast delivery, health clinics, and other services. Around 90% of Americans live within 10 miles of a Walmart. (WSJ) 

Other news 

For the last decade, Jeff Wilpon has been running Sterling Project Development, charging a fee to develop stadiums, arenas and other complex projects. Wilpon says he’s leveraged his relationships in sports to win business from the Green Bay Packers, New York Islanders, and other pro franchises. Wilpon may soon have more time to devote to the real estate business as the owners of the Mets are in talks to sell up to 80% of the franchise to Steve Cohen in a deal that could see the family relinquish control of the team over the course of five years. (Bloomberg) 

A trustee for Morgan Stanley claims in a suit that Thor Equities has been seeking “unrealistic rents for new leases, ensuring that vacancies mount.” The bank is looking to foreclose on 494 Broadway as Thor allegedly stopped paying the mortgage in July because of current and expected vacancies. (TRD)

SoftBank Vision Fund Employees Depict a Culture of Recklessness. (Bloomberg)

Investors are bullish on cold-storage warehouses. Analysts say it is a business poised for rapid growth, but one that involves more risks than owning other real estate. Operators of such facilities generally have to hire more management staff to handle services like packing and unpacking food for distribution. During the first three quarters this year, investors bought $1.9 billion of refrigerated warehouses—up from $1.77 billion for all of 2018—and higher than any year in the past decade… In the 1990s, real-estate companies like Vornado Realty Trust and Crescent Real Estate Equities suffered from greater-than-expected capital and labor costs associated with cold storage and exited the business in the 2000s. (WSJ) 

Photos from Holiday parties 

Moinian GroupCooper HorowitzPlatinum PropertiesMadison Realty Capital. (TRD)

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