Development Activity Anchored by Transit + Upper West Side Permits
The MTA is seeking city approval to build 684 new homes near the future Second Avenue Subway terminus at East 125th Street and Lexington Avenue. The land was acquired from Extell in 2023 for $82 million, after negotiating down from an initial ask of $114 million.
This transit-oriented development would rise near the future Q-line extension, set to open between 2030 and 2039. The MTA hasn’t selected a developer. A neighboring site at 180 East 125th, acquired by JCS Realty for $70 million, is also being planned for residential use.
Elsewhere, on the Upper West Side, plans have been filed for a 12-story mixed-use building at 215 West 76th Street. The new project will total 22,000 square feet, with 10 likely condominium units averaging over 2,000 square feet each. No parking is included. Demolition permits for the current 4-story building were filed in April.
Office Market: Expansion, Refinancing & Default Action
Fanatics has leased 54,000 square feet at 345 Hudson Street, expanding its Manhattan footprint. The building, owned by Hudson Square Properties, is already home to Google and Rent the Runway. Average rents in Hudson Square hover around $86.70/SF.
At 1211 Sixth Avenue, RXR and Ivanhoé Cambridge extended their $1 billion mortgage by three years. The loan had been under scrutiny for a low debt service coverage ratio. Despite Fox and News Corp renewing long-term leases totaling over 1.6 million square feet, occupancy is set to decline as Ropes & Gray exits more than 300,000 square feet.
In the Financial District, the ground lease fee for 32 Old Slip was refinanced for $167 million by Melohn Group and Safehold Inc. The 973K SF building generated $66.6 million in revenue last year. The ground lease includes escalating rent starting at $8.5 million annually.
Meanwhile, Blackstone filed a $21 million pre-foreclosure action at 243 Canal Street, alleging a loan maturity default by Stellar Management and City Urban Realty. The 21,700 SF building, purchased in 2016 for $25 million, had been financed by Signature Bank. The loan’s June 30, 2024 deadline was missed, and Blackstone demanded turnover of rents last month.
Retail Sales and Portfolio Financing
The retail condo at 2250 Broadway sold for $32.5 million to an entity linked to Westside Market NYC. TPG Angelo Gordon had purchased the space in 2022 for $27 million. The 35,000 SF property spans three floors and includes Staples and Starbucks as tenants. Westside Market may occupy the space, placing it directly across from Zabar’s.
In Tribeca, TARGO Capital Partners acquired a four-unit mixed-use building at 111 Reade Street for $9.7 million, or $1,102/SF. The seller, RIG Realty, had purchased the property for $4.5 million in 2012.
In the West Village, a 3-unit REO property at 432 Hudson Street sold for $8.7 million — or nearly $1,966/SF — following a 2023 foreclosure. The building sits within the Greenwich Village Historic District.
A $50 million portfolio loan was also issued by JPMorgan Chase to AYA Acquisitions and Tal Adini-affiliated entities. The loan covers 13 buildings totaling 271 units and 252,891 SF across Manhattan. The most valuable asset is 740 West End Avenue, a 95-unit building with 58 rent-regulated units. Total buildable area across the portfolio exceeds 260,000 SF.
Legal Spotlight: First Lawsuit Under Local Law 18
New York City has filed its first lawsuit under Local Law 18, targeting Incentra Village House in Greenwich Village.
The city alleges the property is operating illegally as a short-term rental, including one “unsafe cellar room” accessed by a steep staircase. Incentra was told in 2023 that it could no longer operate as a hotel. The city is seeking fines and a full shutdown of operations.
Local Law 18, enacted two years ago, restricts stays under 30 days unless the owner is present for the full duration. As of now, only about 3,000 short-term rentals are registered with the city — a sharp decline from the estimated 11,000 illegal units that existed prior to enforcement.
The property owner has filed a countersuit, claiming the building’s historic use qualifies it for hotel operations. Attempts by Airbnb and others to amend the law have largely failed.