Office vacancies are falling across the big metros of the Northeast as robust user demand outpaces the supply of new construction. Deliveries in the last year have primarily been limited to Class A, build-to-suit properties and mixed-use developments. Meanwhile, office tenants are seeking high-end amenities at favorable prices. Nationally, the office vacancy rate stood at 16.8 percent in the second quarter, up slightly from 16.6 percent a year ago, according to real estate research firm Reis. Net absorption for the quarter totaled 3.2 million square feet, down from 3.9 million square feet a year ago. The average asking rent was $33.79 per square foot, up 2.2 percent on a year-over-year basis. Approximately 11.1 million square feet of office space was under construction at the end of the second quarter across Philadelphia, New York and Boston, according to CoStar Group. Helped by approximately 8.3 million square feet of absorption in the second quarter, the average vacancy rate across all three markets was 8.1 percent. Rather than undertake costly new ground-up construction projects, many developers are choosing to redevelop existing assets and efficiently incorporate office space into mixed-use projects. Coworking tenants occupied 54.2 million square feet of office space nationally at the …
New York
JERICHO, N.Y. — Jericho-based developer Engel Burman has opened Encore Luxury Living, a 102-unit seniors housing community in the Long Island hamlet of Jericho. The 160,000-square-foot property offers active adult living with 59 one-bedroom units, 42 two-bedroom units and one three-bedroom unit. Unit sizes range from 826 to 1,500 square feet, and rents start at $8,400 per month. Encore will share a campus with Engel Burman’s existing 200,000-square-foot assisted living community, The Bristal at Jericho.
RIDGEWOOD, N.Y. — ABS Partners Real Estate has negotiated a 13,823-square-foot office lease for music rehearsal space provider Pirate Studios at the Box Factory, an office and retail center in Ridgewood, Long Island. The U.K.-based company provides rehearsal and production space to musicians in sound-treated rooms. Ben Waller of ABS Partners represented Pirate Studios in the lease negotiations. Waller also represented the landlord, a partnership between Hornig Capital Partners and Brickman.
Blackstone Provides $724.2M Loan for Refinancing of Hudson Commons Office Building in Manhattan
by Alex Patton
NEW YORK CITY — Blackstone Mortgage Trust has provided a $724.2 million loan for the refinancing of Hudson Commons, a 698,000-square-foot redeveloped office building in the Hudson Yards submarket of Manhattan. The borrower, a partnership between Cove Property Group and The Baupost Group, purchased the former warehouse from Emblem Health in December 2016. Hudson Commons is now 65 percent leased to tenants including Peloton and Lyft, which will occupy 336,000 square feet and 100,000 square feet, respectively. Kohn Pedersen Fox handled design of the redevelopment project. Grant Frankel, Phil McKnight and Ethan Pond of Eastdil Secured LLC arranged the refinancing loan.
NEW YORK CITY — Colliers International has negotiated a 10,000-square-foot office lease for grocery delivery service Hungryroot in the Flatiron neighborhood of Manhattan. Hungryroot is moving to 7 West 22nd Street from its Union Square coworking office space to accommodate its everyday business functions, rising employee count and continued company growth. Sheena Gohil and Jack Senske of Colliers represented Hungryroot in the lease negotiations. Paul Amrich, Neil King, Alexander Golod and Georgina Cook of CBRE represented the landlord, Chang Realty Associates.
NEW ROCHELLE, N.Y. — The Masonic Hall and Asylum Fund, a seniors housing owner-operator, has acquired the former College of New Rochelle campus just north of The Bronx for $32 million, according to reports from The Journal News. The college declared bankruptcy in September, and sister school Mercy College absorbed all the students, faculty and programs. Although specific plans for the future of the property were not disclosed, Masonic Hall and Asylum Fund operates Masonic Care Community, a seniors housing community in Utica.
NEW YORK CITY — Rockefeller Group has topped out Rose Hill, a 123-unit condominium building in the NoMad neighborhood of Manhattan. The building, located at 30 East 29th Street, rises 600 feet and 45 stories and will offer floor plans ranging from studio to four-bedroom units, including penthouses. Amenities will include a resident bar and lounge with indoor and outdoor seating, fitness center, bike workshop, billiards room, pet salon and a studio guest suite available for reservation. Closings are expected to begin in late 2020. CentraRuddy Architecture designed the building and the interior and Lendlease is the general contractor.
Meridian Capital Group Arranges $60M Refinancing of National Seniors Housing Portfolio
by Alex Patton
NEW YORK CITY — New York-based Meridian Capital Group has arranged a $60 million loan to refinance two portfolios of memory care assets across Ohio, Georgia, South Carolina, Colorado, California and Tennessee. In the first transaction, Meridian arranged $27.5 million for four memory care facilities totaling 264 beds in Ohio and Georgia. The five-year loan features a fixed interest rate and limited personal guarantees. In the second transaction, the Meridian team arranged a $32.5 million loan for memory care facilities totaling 264 beds in South Carolina, Colorado, California and Tennessee. A balance sheet lender provided the five-year, non-recourse loan with a fixed rate. Further details on the properties, locations and borrowers were not disclosed. Ari Adlerstein, Ari Dobkin and Josh Simpson of Meridian negotiated the two transactions.
NEW YORK CITY — CBRE has negotiated a 4,800-square-foot office lease for architecture firm Populous at The Starrett-Lehigh Building in the West Chelsea neighborhood of Manhattan. Populous is known for designing Yankee Stadium, Citi Field, Allianz Field and both Tottenham and Wembley Stadiums. The firm designed its own space on the 17th floor and will relocate from its Midtown location in April 2020. Evan Fiddle, Michael Movshovich, Mary Ann Tighe and Katja Volz of CBRE represented Populous in the lease negotiations. Daniel Birney and Denise Rodriguez represented the landlord, RXR Realty, on an internal basis.
NEW YORK CITY — LVMH Moët Hennessy Louis Vuitton SE (LVMH), a French conglomerate and supplier of luxury goods, has agreed to acquire luxury jewelry retailer Tiffany & Co. (NYSE: TIF) for approximately $16.2 billion. The sales price equates to $135 per share, to be paid in cash. The deal is expected to close in the second or third quarter of 2020. LVMH, based in Paris, owns more than 70 luxury brands in the clothing, cosmetics, jewelry and spirits industries, including Dom Pérignon champagne, Givenchy clothing and perfume and Christian Dior fashion and perfume. New York City-based Tiffany & Co., which was founded in 1837, currently operates about 300 stores worldwide and employs some 14,000 people. LVMH executives cited the opportunity to grow its watches and jewelry division in American markets as a key driver behind the acquisition. Those items account for just 9 percent of the company’s revenue stream, according to an analysis published by Deloitte earlier this year. In addition, The Wall Street Journal reports that Tiffany has seen its sales slump over the last several years and that the 182-year-old company is focusing more on China, the leading consumer of luxury products. The acquisition by LVMH should help Tiffany …