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Real Estate Roundup 9.4.20

Real Estate Roundup:

Office leasing 

  • Private equity firm MiddleGround Capital has signed a 10-year office lease for 8,425 SF on the entire fourth floor of Madison Capital’s 10 Crosby Street in Soho. Asking rent on the deal was $82 per SF. (CO)

Hospitality 

  • The 478-room, Hilton Times Square hotel, located at 234 West 42nd Street will close permanently by Oct. 14, according to a WARN Act Notice filed by the hotel’s owners, Sunstone Hotel Investors. In May, the company reported that it had written down the value of the Hilton to $61 million, less than the $77 million mortgage on the property. Sunset has not made payments on the mortgage, which comes due in November, since April, and is exploring options with the lender. (CO)

Politics 

  • NYC Subway faces retail vacancies… The MTA said that 35 of the 215 retail spaces in the subway — more than 16% of all storefronts in the system — have gone out of business in the last five-plus months… The latest weekday ridership figures, from Aug. 31, show that just over 1.4 million people rode the subway that day — down nearly 75% from 2019. (TheCity)

National deals 

The Radco Cos., an owner and operator of multifamily buildings in the U.S., has now pared more than half of the apartments it bought since the last recession as it builds a cash pile for opportunities it sees coming next year. The company sold six buildings this week in the Atlanta suburbs and one in Charlotte, North Carolina for a combined $315.6 million. That leaves Radco with 28 of the 59 apartment properties it had purchased since 2011. Cap rates averaged 5.1% for U.S. apartments in the second quarter, the lowest since at least 2014.

  • Heard on the Street: CEO Norman Radow: “In February — the old days– we would get as many as 50 offers. We’d look at the top bidders and say ‘Who are these guys’? Now you’re just seeing the very big equity groups and the very large funds.” (Bloomberg)

Retail 

  • Two of Brookfield’s malls – the Natick Mall in Massachusetts and the Shops at Merrick Park in Florida – are feeling the pressure from recent retail closures. The two properties make up an $895 million Bank of America-led CMBS deal, which originated in December 2019. The two super regional malls were a part of Brookfield Property Partners’ $9.25 billion purchase of GGP in 2018. (CO)
  • Macy’s appears to be excelling in luxury retail as its high-end department store peers go under. The company’s latest financial results surpassed analysts’ expectations, thanks in large part to digital sales increasing 53% from a year earlier… Macy’s has unveiled a plan to test opening smaller, off-mall stores, and fulfillment centers, while consolidating its current locations. (CNBC+TRD)

Other news

Kamber Management, SL Green Realty, and Red Apple Group have all independently filed lawsuits against Icon Parking and its affiliates like Quik Park.

  • Be Smart: Icon boasts more than 200 locations in Manhattan. The Metropolitan Parking Association said that in mid-August only 33,000 of the trade group’s 82,000 spaces were filled. August business is usually down 5% but dropped 60% last month. (WSJ)

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