“WTF Was That?!” -- A Recap Of June In NYC Real Estate

New York City Real Estate: June 2025 Unpacks Policy Shifts, Strategic Financing, and a Reshaping Skyline

June 2025 proved to be a pivotal month for New York City's real estate sector, marked by significant policy changes impacting rental markets, a flurry of strategic financing and development activities, and a mayoral primary outcome that has the industry rethinking its political alignments. The city continued its push for housing affordability, while developers advanced ambitious projects and investors navigated a complex financial landscape.

Policy & Regulation Shake-Ups

The month was dominated by the implementation of the Fairness in Apartment Rental Expenses (FARE) Act, which went into effect after a federal judge rejected the Real Estate Board of New York's (REBNY) injunction request. This new law requires landlords to pay commissions for rental brokers they hire, a shift from the typical tenant-paid fees that often equaled 15% of the first year's rent. Immediately, StreetEasy saw a drop in listings, and some brokers indicated that landlords were considering increasing rents to compensate for the new cost. The luxury rental market, however, seems less impacted.

On the affordable housing front, Mayor Eric Adams and the Department of City Planning initiated the public engagement phase of the "Manhattan Plan," aiming to create 100,000 new homes in the borough over the next decade, leveraging tools from the "City of Yes for Housing Opportunity". The Midtown South Mixed-Use Plan was approved, designed to facilitate nearly 10,000 new homes, including up to 2,900 permanently affordable units. A notable agreement was reached to preserve the Elizabeth Street Garden while generating over 620 affordable homes across Lower Manhattan by rezoning alternative sites like 156-166 Bowery, 22 Suffolk Street, and 100 Gold Street. Additionally, the Department of Housing Preservation and Development (HPD) issued an RFP for a deeply affordable housing project at 324 East 5th Street, repurposing an NYPD parking lot. New York State also committed over $600 million to affordable and energy-efficient housing developments in New York City, including a significant rehabilitation of Westbeth Artist Housing.

The New York City Housing Authority continued to grapple with significant challenges, reporting over 8,600 vacant units and lengthy apartment turnover times, averaging 350–423 days due to necessary upgrades. Despite this, NYCHA secured $231 million in financing for the rehabilitation of the 877-unit Eastchester Gardens in the Bronx. The city also completed a $23 million revitalization of public spaces across several NYCHA developments.

The mayoral primary election saw a notable outcome, with Assembly member Zohran Mamdani gaining a lead and former Governor Andrew Cuomo conceding the Democratic nomination. This result has prompted the real estate industry, which largely backed Cuomo, to re-evaluate its political support, potentially shifting towards Mayor Eric Adams for the general election. Mamdani's platform, which includes a pledge to freeze rent-stabilized rents, suggests a challenging environment for landlords, especially given that real (inflation-adjusted) rent-stabilized rents have been decreasing for a decade, contributing to financial distress for many property owners.

Investment & Financing Dynamics

June was characterized by substantial refinancing activity across the market. Notable refinancing deals included:

• Brookfield Properties secured a $400 million loan from JPMorgan Chase and Citibank for its 745-unit residential complex in Greenpoint, Brooklyn.
  
  

• Stellar Management refinanced the 1,328-unit Independence Plaza in Tribeca for $675 million with a syndicate of major banks.
  
  

• Hakim Organization refinanced a 480-unit residential building in Kips Bay for $99.8 million.
  
  

• Magna Hospitality Group obtained two refinancing loans totaling $262 million for hotels in the Garment District.
  
  

• Fortress Investment Group and Slate Property Group secured over $70 million in refinancing for residential properties in Turtle Bay and Lenox Hill.
  
  

• The United Nations Development Corporation received a $365 million renovation loan for two office properties in Turtle Bay, related to a larger U.N. expansion.
  
  

Property acquisitions and related financing were also prominent:

• Tishman Speyer acquired an office building at 148 Lafayette Street in Little Italy for $105.5 million.
  
  

• The William R. Berkley Foundation purchased a landmarked office building at 9-11 West 54th Street for $38.2 million.
  
  

• MBf Holdings, a Malaysian investment company, acquired an office building at 540 Broadway in SoHo for $30 million.
  
  

• John Gore Organization bought five floors and lobby space at the Brill Building in Midtown West for $28.8 million.
  
  

• Journeyz Ahead LLC paid $8.1 million for a converted single-family home in the Upper West Side.
  
  

The month also highlighted ongoing struggles with distressed assets and foreclosures:

• Joe Moinian's Moinian Group failed to halt a foreclosure auction, leading to MCM's acquisition of the Hilton Garden Inn at 237 West 54th Street through a $10 million credit bid.
  
  

• Flushing Bank sold $10.455 million in pre-foreclosure notes secured by Nussbaum Realty Group rental buildings.
  
  

• Ivanhoe Cambridge defaulted on a $359 million mortgage for an office building at 85 Broad Street.
  
  

• The loan for 1440 Broadway went back into special servicing due to a maturity default.
  
  

• Prime Finance took control of a 103-unit residential building in Downtown Brooklyn via foreclosure auction.
  
  

Development & Construction Progress

New projects and significant milestones shaped the city's future skyline:

• Construction officially began at 70 Hudson Yards, a 47-story office skyscraper slated to be New York's first zero-carbon emission tower.
  
  

• The superstructure for The Lirio, a 112-unit all-affordable housing building in Hell's Kitchen, topped out.
  
  

• 80 Clarkson, a two-tower residential complex in West Village, held a private topping-out ceremony as it neared completion.
  
  

• Tavros Capital and Charney Companies secured $525 million in construction financing for a 55-story, 636-unit condominium project in Long Island City, with groundbreaking scheduled for June.
  
  

• Robert Konig filed a rezoning application for a massive 1.6 million-square-foot mixed-use development in Gravesend, Brooklyn, including 1,457 residential units and 24 townhouses.
  
  

• Hiwin Group USA submitted plans for a 30-story, 125-unit residential building in Midtown West.
  
  

Conversions of office to residential space continue to be a key trend:

• Albert Srour filed another application to convert a floor of an office building at 248 West 35th Street into residential units, aiming for a total of 42 apartments.
  
  

• Flatiron Real Estate Advisors and partners will convert 64 Fulton Street in the Financial District into 49 residential units, including affordable housing.
  
  

• Paul Yam filed plans to expand and convert two commercial buildings on Bowery into a 12-story, 42-unit mixed-use residential tower.
  
  

• RXR Realty, Apollo Global Management, and SL Green Realty acquired the fee for 5 Times Square for $8 million, signaling plans for its conversion into approximately 1,250 residential units.
  
  

Several projects are also nearing completion:

• The Best Western Hotel at 321 West 38th Street saw most of its façade installed.
  
  

• 126 East 57th Street, a residential tower on Billionaires’ Row, is approaching completion.
  
  

• Extell Development's medical office tower at 1520 First Avenue is 95% constructed and slated for completion in Q3.
  
  

• The façade of the 88-story supertall 520 Fifth Avenue has reached the roof parapet.
  
  

• 1 Park Row, a residential building in Lower Manhattan, is nearing exterior completion.
  
  

Market Dynamics & Notable Trends

The office market presented a mixed bag. While some areas experienced increased leasing activity, notably from tech companies like OpenAI securing its first NYC office in SoHo, overall Manhattan office leasing volume saw a slight decrease in May. Asking rents also experienced a sharp drop. Major leases included L.E.K. Consulting at 1166 Sixth Avenue and the United Nations expanding its footprint at 2 United Nations Plaza. However, older office buildings continue to be challenging, driving the trend toward residential conversions.

The "City of Yes" rezoning plan has significantly impacted the air rights market, making transfers easier and leading to increased interest, particularly for landmarked buildings in Manhattan. This new flexibility allows landmark owners to generate funds for maintenance and helps encourage housing density.

In the luxury residential sector, high-end condo sales continued, including significant transactions at 111 West 57th Street and the Waldorf Astoria. However, Manhattan's new development contract volume for May was down year-over-year, particularly for units under $4 million.

Conclusion

Overall, June's real estate landscape in New York City was a dynamic interplay of regulatory changes, strategic financial maneuvers, and significant progress in development, all against a backdrop of evolving market conditions and a shifting political landscape.