So, This Is Christmas – Commercial Observer
Merry Christmas, CO readers!
We hope that you spend the day unwrapping presents. Sitting by the fireplace. Enjoying the eggnog without any real concern about calories. (Or, perhaps eating Chinese food and going to the movies. We’ve been quite taken with the poster of David Harbour chillingly sucking on a candy cane in “Violent Night.”)
But if you were too busy shopping for presents and arranging any last-minute work before taking the next week off, there were some real estate developments last week worth taking note of.
There were happy retail stories, like the fact that we learned that Miami Worldcenter — the 10-block megadevelopment with some 300,000 square feet of retail — is now 75 percent leased. Not too shabby! (It was a good week for megadevelopments, nationwide. In Howard Hughes’ Downtown Columbia — the sprawling project which spans three neighborhoods, will be 14 million square feet when it’s all finished, and is on a 30-year redevelopment timeline — three new tenants signed leases last week.)
Up north we learned that Housing Works is opening New York’s first recreational weed dispensary on Dec. 29 at 750 Broadway. (Housing Works? Getting into cannabis? Well, it makes sense. The organization helps homeless, AIDS and HIV patients and some of whom have had criminal justice convictions, and dispensary licenses were given priority to people with previous marijuana convictions.)
There were some important renewals, like Cole Haan re-upping at 30 Rockefeller Plaza. And while one would normally associate the words “new Dick’s Sporting Goods” with a place to get slugger his new baseball cleats, what it actually means is that the retailer just picked up office space in Union Square.
The Christmas gift that keeps on giving…
Retail has had its ups and downs but we were heartened this week when we saw the latest number in industrial:
3.8.
That was the overall industrial vacancy rate in November, according to a new report from Commercial Edge.
This comes even as construction for industrial space is at historic highs, with a pipeline of 742 million square feet under construction, and another 684.5 million square feet in the planning stages. Moreover, there was $78.8 billion worth of industrial sales deals done in 2022. Now, that’s a good Christmas gift!
Of course, industrial stands in marked contrast to the state of office. This week New York’s Independent Budget Office issued a report saying it expected a 15.9 percent drop in real estate values between the fiscal years 2022 and 2023, and commercial sales to decline 12.8 percent. (It’s no picnic for residential sales, either. They’re expected to drop 18 percent.)
BUT!!!
There’s always a “but.” No matter how much we hear about real estate woes, lending woes, and all sorts of other woes, real estate finds a way.
Whatever is said about proptech’s rocky year there’s still money out there. Last week we learned that Fifth Wall closed an $886 million fund, making it the biggest proptech fund ever.
Last Thursday, GFP, Metro Loft and Rockwood Capital closed on a $535.8 million acquisition and redevelopment loan for 25 Water Street from MSD Partners and Apollo! Another Christmas miracle!
Not to be outdone, the financing closed on the Fontainebleau Las Vegas to the tune of … $2.2 billion?!?
And hiring is always something to bring us Christmas cheer. Savills continued its hiring spree by tapping Avison Young’s Jennifer Ogden to be its newest managing director and down in D.C. Univest Financial named M&T’s Charlie Camp to be senior vice president in charge of Maryland.
All of which is to say, raise a glass of something and toast real estate this Christmas. You could do worse than something caffeinated.
Enjoy your last week of 2022 — and god bless us every one!
