It was a tale of two office markets in New York this week.
Charles Cohen’s 750 Lexington Avenue received a valuation of $41 million, a significant drop from its $300 million valuation in 2015. The building’s occupancy and net operating income have declined, leading to a foreclosure case.
Cohen’s personal net worth has decreased in parallel and his troubles continue as he faces a separate $187 million judgment from Fortress Capital.
On the other side of the spectrum, Scott Rechler closed a $1 billion deal for 590 Madison Avenue with a big private equity loan, New York City’s largest investment sale in three years. Mark Rowan’s Apollo Global Management provided $785 million in debt to finance RXR’s $1.08 billion purchase of the Plaza District office tower from the State Teachers Retirement System of Ohio.
There was some drama, as Rechler signed a contract to buy the building in May, with a closing deadline set for July 31. RXR needed more time to lock in financing and received a two-week extension, for which the company had to pay a $5 million fee that was added onto the final purchase price.
In a major moment for New York City development, the NYC City Council approved the Midtown South Mixed-Use Plan, rezoning 42 blocks.
This is the city’s largest residential rezoning in 20 years, projected to add 9,535 housing units, with 2,842 designated as affordable. The rezoning introduces new residential districts and utilizes Mandatory Inclusionary Housing for the first time in Midtown Manhattan, part of Eric Adams’ Manhattan Plan.
On the Upper West Side, UDR and MetLife are looking to sell a five-building, 710-unit multifamily portfolio near Columbus Circle for $450 million to $500 million.
The portfolio is being marketed as resistant to potential rent freezes due to four buildings being free market and the fifth having significant rent increase potential under the 421a program, an intriguing offering for investors amid concerns about Democratic mayoral candidate Zohran Mamdani’s promise to freeze rents on rent-stabilized apartments.
And finally, Yitzchok Schwartz’s YS Developers is moving ahead with a controversial project at 960 Franklin Avenue in Crown Heights, planning 300 condo units with a projected sellout of $273 million. The seven-story building will include one to two-bedroom condos, with prices starting under $600,000 for a one-bedroom and reaching approximately $1.6 million for a two-bedroom on the top floor.
The development comes after years of disputes and rejected proposals for the site, including earlier plans by Bruce Eichner for significantly taller towers that were opposed due to concerns about shadowing the Brooklyn Botanic Garden.
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From $300M to $41M: Charles Cohen’s 750 Lex takes haircut
Rechler closes $1B deal for 590 Madison with Apollo private equity loan
Upper West Side landlord pitches Mamdani rent freeze-proof portfolio