Wednesday was an unparalleled day in recent memory of New York City real estate news.
The morning began with the bust-up of two casino bids in Manhattan. First, a Community Advisory Committee voted 4-2 to disapprove SL Green’s pitch for a $5.4 billion casino in Times Square, meaning the proposal will not move on to the final round of the state’s casino licensing competition.
After the meeting was over, SL Green CEO Marc Holliday stood up and chastised the committee members, besides those appointed by the mayor and governor, the sole yes votes.
“What you did here today was a despicable display of cowardice, lack of leadership, lack of consideration for all the people who would benefit from this proposal,” Holliday shouted at the members as they filed out of the room.
Moments later, Holliday’s firm was joined in rejection by Silverstein Properties.
A six-member Community Advisory Committee rejected its proposal for a casino at a “giant hole in the ground” on 41st Street and 11th Avenue, in a 4 to 2 vote.
Silverstein, alongside Rush Street Gaming and Greenwood Gaming & Entertainment, pitched the Avenir, a $7 billion casino complex planned for a long-vacant site. The project would have featured a 1,000-key Hyatt Hotel, as well as restaurants, bars and a 150-seat entertainment venue.
The developer also promised to fund the conversion of offices into 2,000 units of housing.
The dual rejections leave Soloviev Group as the lone casino competitor in Manhattan — the developer is slated to get a date before its CAC within the week.
Wednesday morning also brought the drama surrounding real estate investment trust Paramount Group to the forefront.
Rithm Capital agreed to acquire Paramount Group for $1.6 billion, with plans to purchase the major office landlord’s outstanding shares at $6.60 per diluted share.
The acquisition is a significant bet on the resurgence of office values, with Rithm CEO Michael Nierenberg expressing optimism about the office market and anticipated interest rate cuts by the Federal Reserve (more on that later).
But the deal comes amidst controversy surrounding Paramount Group’s CEO, Albert Behler, including an SEC investigation into undisclosed payments and concerns about executive compensation and conflicts of interest.
The craze of the morning gave way to an afternoon with the development most likely to affect the largest swath of the industry: an interest rate cut.
The Federal Reserve cut its benchmark interest rate by a quarter point, the first such cut in nine months, though it was not as drastic as President Donald Trump desired.
Ahead of the meeting, real estate industry players aired their hopes that lower rates could stimulate commercial transactions and help address the housing affordability crisis.
While mortgage rates recently dropped, they do not directly follow the Fed’s interest rate changes and it’s uncertain how much further they will fall.
And all of that unfolded over the course of a few hours. Who said Wednesdays were boring?
Read more
Game over for SL Green’s Times Square casino
End of the road for Silverstein’s casino proposal
Rithm Capital inks deal to buy Paramount for $1.6B