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By Lois Weiss
Deutsche Bank picked up the massive Essex Crossing development along Delancey St. for a mere $236.9 million. It will likely be resold.MOSO
Calling anyone with cash: There’s never going to be a better time to buy a piece of NYC.
“Values have come down a lot and stabilized in 2024 — and now present an opportunity,” said Ariel Property Advisors’ Shimon Shkury of the market for both office and multi-family buildings.
In fact, buyers are now getting pricing last seen 20 to 25 years ago. Office condos that were selling for $800 to $1,000 per foot in 2019 are now closer to $400 a foot. “Owners are negotiating because they want to stay alive,” said attorney Jay Neveloff, who heads real estate at Kramer Levin.
These values are positively retro: Savanna paid just $255 million for the 185,000-square-foot office building at 799 Broadway. It cost $300 million to develop and is 71% occupied.
For instance, Michael Cohen’s Williams Equities paid $147.5 million for 470 Park Ave. South or $490 per foot; it sold in 2018 for $245 million. Savanna paid $255 million, or $1,380 per foot, to Columbia Property Trust and Cannon Hill Capital Partners in the lender-advised sale of 799 Broadway. That 2022-built, 185,000-square-foot office building cost $300 million to develop and is 71% occupied at high rents.
Zar Property New York bought two smaller deals for even less: 119 W. 57th St. on Billionaires’ Row for $27 million, or $170 per foot, and 30 W. 61st St. for $15.2 million, or $97 per foot.
“The people buying for sub-$300 per foot or sub-$200 per foot are taking a chance,” said Craig Waggner of Cushman & Wakefield. “The city is perceived as a safe haven and it’s hard to go wrong.”
Michael Cohen’s Williams Equities paid $147.5 million for 470 Park Ave.Russ Colchamiro
In another steep valuation reset, Robert Moser’s Prime Group Holdings and Empire Capital will pay $50 million for the Ironworks project at 511-541 W. 25th St. in Chelsea. The sellers paid $148 million for it in 2019. The buyers will turn a portion into storage facilities.
Many of these bargain-basement prices come courtesy of owners and lenders who want to ditch properties dinged by factors including high interest rates, ground rent resets and regulations. Lenders are also initiating deals to sell both performing and underperforming notes.
“There is a lot of enthusiasm that we are through the worst, but also caution about the trajectory of the healing,” added Andrew Scandalios of JLL. “It’s tilted positive for equities and the buy-side investors are bullish, but they are all cautious and selective about the quality of what they are buying.”
“The people buying for sub-$300 per foot or sub-$200 per foot are taking a chance … the city is perceived as a safe haven and it’s hard to go wrong.”
Craig Waggner of Cushman & Wakefield
High-net-worth individuals, family offices and international groups are also kicking bricks and buoying the market.
“The international community will be more focused on higher quality and we are seeing some Asian investors that want to chase distressed opportunities,” said Doug Middleton of CBRE.
For instance, SL Green sold an 11% stake in the trophy One Vanderbilt to the Japanese family-owned Mori Building Company, revaluing the tower at $4.7 billion or around $3,000 per foot.
In this rising market, owners are more willing to bring in new equity, even if it leaves them with a smaller share, Neveloff explained. To capitalize on that interest from wealthy foreign investors, Neveloff’s firm is merging with an international law firm with 23 offices around the world and after May 1, will be known as HSF Kramer in the US.
“The market is bouncing off the bottom and has created a foundation for the recovery,” noted Douglas Harmon of Newmark. “There will be new opportunities at significantly reduced prices.”
Meanwhile, SL Green bought the offices at 500 Park Ave. from Morgan Stanley for $130 million.Brian Zak/NY Post
He and Adam Spies marketed the office portion of Morgan Stanley’s 500 Park Ave., which is being sold to SL Green for $130 million; and 2 Park Ave. being purchased by Haddad Brands for $360 million — that seller paid $519 million in 2007.
The newly developed offices and retail at Essex Crossing at 145 and 155 Delancey St. in the base of residential towers were taken over by lender Deutsche Bank for its loan of $236.9 million and will likely be resold.
But the poster child for the steep reset in values is the former Sports Illustrated Building at 135 W. 50th St., which was purchased in early 2024 for $8.5 million; it once traded for $332 million.
Now, after a ground lease rent reset, the buyer, Texas-based Thakkar Developers, is targeting $150 million in renovations.
With deals this good floating around, Marx Realty CEO Craig Deitelzweig might as well speak for the entire industry when he told The Post, “We want to buy more.”
Craig Deitelzweig — President and CEO at Marx Realty & Improvement Co.
Are you going to buy in `25? If so, what asset class?
Definitely. We will be buying office buildings in 2025, as we believe we are experiencing a once-in-a-generation-type of buying opportunity. Of course, we will be selective in our purchases with an emphasis on location and the bones of the asset.
Is there a single “good” sign you see in a distressed property that makes you want to buy it?
We often think about how the asset could be transformed. We love to see assets that were performing well at some point and have just lost their edge because the property is not properly catering to the market. We see this often as some landlords have not evolved, and have assets that seem stuck in time or have undergone mediocre and uninspired repositionings.
What real estate or tax policy would you like to see from a Trump administration?
It would be great to see incentives encouraging owners to invest in transforming the nation’s older office buildings into world-class assets. We have long believed that, much like some of the best hotel assets, heritage office buildings with modern upgrades tend to attract tenants seeking spaces with a strong sense of history, authenticity and soul. There are also strong environmental reasons for transforming older office buildings into state-of-the-art office spaces, and it would be helpful if there were more tax incentives to accelerate this transformation.
If you could stack the new administration with people you know and do business with, who would you choose?
Max Gross and Cathy Cunningham. [“We will not accept if nominated, and will not serve if elected.” — M.G. and C.C.]
Let’s talk about office. Is the worst over?
Yes. But not for everyone. Marx Realty assets are seeing incredible leasing velocity, record rental rates and robust demand from all different sectors of the economy, particularly from private equity, fintech, tech and fashion. This speaks well for the future of New York office. Lastly, physical occupancy in our buildings is better than pre-pandemic, which also signals this is a great buying opportunity.
On Thanksgiving Day, we delivered the Meeting Galleries, another 11,000 square feet of amenities to complement the building’s current amenity offering. We are seeing such strong demand for our spaces in the building that we have been able to raise rents two times this year — and that’s before delivering our new Meeting Galleries. I don’t think we have ever seen demand like this for our buildings.
Which market (outside of NYC) do you like best? Which market (including NYC) are you most fearful of?
We have purchased two office buildings in D.C., as we believe this market is well-positioned to attract higher-end law firms, lobbying and strategist groups, associations, and technology firms that seek quality office spaces like ours.
San Francisco just seems like a disaster, given the amount of crime and unpleasantness of the streetscape. The vacancy rate for office space in that city is just scary. I can’t tell you how many times I hear leaders in New York and D.C. say they don’t want to be like San Francisco. Miami also seems to be in a downward trend for office buildings, and we are avoiding that market.
How’s the financing climate for new development and redevelopment — hot, cold or just right?
Cold still, unfortunately.
What are your predictions for the mayor’s City of Yes, especially given the controversies within the Adams administration?
The City of Yes is quickly becoming the City of Maybe.
Do you still like Eric Adams?
Mayor Adams has very good intentions, but hasn’t been as effective as we need him to be. That said, he is terrific compared to his predecessor.
Lightning Round:
Your social media of choice?
LinkedIn for work, X and Instagram for non-work.
AI: Helpful in CRE or a fad?
Ultimately, very helpful.
Last movie you saw in a theater?
I can’t recall, which is kinda telling.
You’re going on a six-month expedition into the Amazon rainforest. What’s your last meal before you get on the plane?
KFC.
Tesla or BMW?
One of our all-electric MarxMobiles: the Porsche Taycan, Tesla Y or Rivian.
Will interest rates be below or above 4 percent on July 1, 2025?
Slightly below.
If you could partner with one person in the business on a property, who would it be?
Ian Schrager.
What are you tired of talking about?
The existential threat to office — we always have been believers in hospitality-infused office product and the need to collaborate and grow better together.
ned a five-year, 3,200-square-foot lease on the building’s ninth floor, while investment bank Peel Hunt signed a six-year, 3,000-square-foot lease on the 16th floor. Both firms will move into pre-built suites as part of the MarxReady program.
Hillcrest Finance was represented by Cushman & Wakefield’s Pierce Hance while Peel Hunt was represented by Scott Ansel of JLL. JLL’s Mitchell Konsker, Carlee Palmer, Simon Landmann and Thomas Schwartz lead a team handling leasing for Marx Realty.
“This continual stream of new leases at 10 Grand Central further validate the value of our MarxReady pre-built series and the hospitality-infused repositioning of the property,” said Craig Deitelzweig, president and CEO of Marx Realty. “These two new leases highlight 10 Grand Central’s thoughtfully crafted, turnkey spaces that embody the building’s unique blend of hospitality and modern office design.”
Marx Realty Adds Tenants at 10 Grand Central via Pre-Built Spaces
By: Paul Bubny
Marx Realty signed Hillcrest Finance and Peel Hunt to new leases at 10 Grand Central in Midtown Manhattan. Real estate investment management firm Hillcrest Finance has signed a five-year, 3,200-square-foot lease on the building’s ninth floor, while investment bank Peel Hunt signed a six-year, 3,000-square-foot lease on the 16th floor. Both firms will move into pre-built suites as part of the MarxReady program.
Hillcrest Finance was represented by Cushman & Wakefield’s Pierce Hance while Peel Hunt was represented by Scott Ansel of JLL. JLL’s Mitchell Konsker, Carlee Palmer, Simon Landmann and Thomas Schwartz lead a team handling leasing for Marx Realty.
“This continual stream of new leases at 10 Grand Central further validate the value of our MarxReady pre-built series and the hospitality-infused repositioning of the property,” said Craig Deitelzweig, president and CEO of Marx Realty. “These two new leases highlight 10 Grand Central’s thoughtfully crafted, turnkey spaces that embody the building’s unique blend of hospitality and modern office design.”
Marx Realty Plans Luxury Train-Inspired Meeting Spaces at 10 Grand Central
By: Paul Bubny
Marx Realty, a New York-based nationwide owner, developer and manager of office, retail and multifamily property, revealed plans for an 11,000-square-foot amenity suite on the 11th floor at 10 Grand Central. The Meeting Galleries will comprise four distinctive and reservable spaces to accommodate board meetings, corporate retreats, holiday parties, product launches, team building activities, podcast production and other uses.
“This new space will be a first-of-its-kind experience unlike anything available in today’s office buildings, and tenants have already submitted reservation requests,” said Craig Deitelzweig, president and CEO of Marx Realty. “We always aim to anticipate and exceed the expectations of our tenants. These purpose-built spaces pay homage to the nearby Grand Central Terminal, with a nod to the Beaux Arts era of luxury train travel, featuring realistic influences and textured layers of warmth and sophistication.”
The Meeting Galleries spaces will include The Grand Gallery, The Bar Car, The Podcast Gallery and a Screening Gallery.
The Plan: 10 Grand Central Gets a Train-Themed Tenant LoungeDo you love trains? This tenant lounge is for you.
By Abigail Nehring September 19, 2024
The 11,000-square-foot lounge celebrates 10 Grand Central’s Beaux-Arts roots.RENDERING: Courtesy of Tangram 3DS
A rendering of The Bar Car at 10 Grand Central.RENDERING: Courtesy of Tangram 3DS
10 Grand Central’s Grand Gallery will be able to host up to 200 people in town hall-style meetings.RENDERING: Courtesy of Tangram 3DS
Tenants will be able to book a movie night at the Screening Gallery.RENDERING: Courtesy of Tangram 3DS
Office workers at Marx Realty’s 10 Grand Central might be surprised not to see rail ties and crop fields flashing by when they look out the porthole-like windows of the The Galleries, a tenant lounge on the 11th floor.
That’s because the space looks just like a turn-of-the-century luxury train car, down to the rounded corners of the windows, oxidized copper finishes and fan pattern mosaic tile on the floor.
It’s an ode to the building’s Beaux-Arts heritage and a subtle reminder of its proximity to nearby Grand Central Terminal, the hub that weighs more heavily on companies’ decision to lease office space in the age of hybrid work, according to Marx President and CEO Craig Deitelzweig.
“We really wanted to make this space special and different than any other space in the market,” Deitelzweig said. “Tying it into train lines from the same period made all the sense in the world.”
In fact, Marx’s in-house design team, together with Studios Architecture, have been leaning into that concept throughout the 35-story building at the corner of East 44th Street and Third Avenue, beginning in 2019 with a $45 million lobby renovation and overhaul of the 3,000-square-foot terrace and lounge on the seventh floor.
Now tenants are getting another 11,000 square feet of amenities at The Galleries, including a cocktail bar, a town hall-style meeting room, a mini movie theater and a podcast studio.
The space, which will open in November, builds on motifs already sprinkled throughout the 438,000-square-foot property, designed in 1931 by Ely Jacques Kahn, including the color Marx dubs “10 Grand Central Green,” a warm olive shade that you might expect Mr. Green to wear in a game of Clue.
You’ll see the color on the couches lining the perimeter of The Galleries and the floor-to-ceiling drapes that break up the burlwood wall paneling.
Despite the retro design, the space is equipped with 21st century technology. That includes the recording equipment in the podcast studio, which is already booked through December, according to Deitelzweig.
Deitelzweig said his goal is to give tenants what they desire, and right now that’s an eclectic mix of work and play areas.
“Tenants really look at office buildings similar to hotels now,” he said.
The cross-pollination of the city’s hospitality sector and Class A office market in the wake of the pandemic is a trend Marx helped start across its half-dozen Manhattan office properties. At 10 Grand Central, which has an alternate address of 155 East 44th Street, the investment seems to be working.
The building has been fully occupied since early last year, Deitelzweig said. Attracting tenants also became easier when Marx got some buzz for dropping $100,000 on an electric Porsche Taycan as an amenity for the property in 2022.
“We want our tenants to love coming to work, to make it a joy to experience this type of space, and really show it off,” Deitelzweig said. “That’s why they come to the office time and time again.”
Admin Provider TMF Group Takes 3K SF at Marx Realty’s 10 Grand Central
Administrative service provider TMF Group has signed on for office space at 10 Grand Central.
The global tax, accounting, payroll and human resources company inked a 10-year lease for 3,130 square feet at Marx Realty’s 10 Grand. Asking rents at the 35-story Midtown office tower hover between $68 and $130 per square foot, according to the landlord.
This is not the first lease TMF has signed in New York City. The Dutch company occupies space on the 27th floor of 48 Wall Street, according to its website. It is unclear whether the deal at 10 Grand represents a second office or a relocation from the Financial District.
JLL (JLL) represented both the tenant and landlord in the deal. Jason Roberts brokered the transaction for TMF, while Mitchell Konsker, Carlee Palmer, Simon Landmann and Thomas Swartz handled it for Marx Realty. A spokesperson for JLL did not immediately respond to a request for comment.
TMF will take a fully furnished suite on the ninth floor of 10 Grand, part of what Marx Realty calls its “MarxReady” program. In total, that floor consists of 17,761 square feet, per the building’s website.
“We are happy to see strong demand for our MarxReady prebuilt suites, which have been meticulously designed to create the same sensory experience found throughout the building,” Craig Deitelzweig, president and CEO of Marx Realty, said in a statement.
In 2018, Marx Realty completed a $45 million repositioning in the Midtown tower. Within the last year, the landlord has leased more than 94,000 square feet in 10 Grand alone. TMF will join tenants such as UpSlide, Fin Capital, The Completed Life Initiative and Agence France-Presse in the property.
Anna Staropoli can be reached at astaropoli@commercialobserver.com.
Crain’s New York Business 2024 | Notable Real Estate Leaders
July 29, 2024
Craig Deitelzweig
President and Chief Executive Officer, Marx Realty
Scope of work: As president and chief executive officer of the real estate company Marx Realty, Craig Deitelzweig oversees development, construction, leasing and property management. He also manages five million square feet of commercial office, retail and residential space.
Biggest career win: Deitelzweig recently oversaw the construction of 10 Grand Central, Marx Realty’s foray into hotel-style office buildings. He has also worked on the 1.4 million-square-foot Cross County Center in Yonkers, New York, an open-air shopping center.
Other contributions: Deitelzweig is a Urban Land Institute mentor and sits on the nonprofit’s ULI New York committee. He also serves on advisory boards at Tulane University, Shadow Ventures and Merchants National Properties.
Marx Realty leases 9,473 s/f office to Consonance Capital at 545 Madison
545 Madison – Manhattan, NY
Manhattan, NY According to Marx Realty, healthcare investment platform Consonance Capital has signed on to take 9,473 s/f of space at its 545 Madison office building, which the firm recently co-branded with Baccarat. Consonance Capital will move from its current location at 1370 6th Ave. in Midtown. A confidential real estate holding firm – and the largest tenant at 545 Madison – has extended its 42,000 s/f commitment for an additional five years leaving only 9,500 s/f of space available.
“545 Madison has become one of the most sought-after office addresses in Manhattan and we’re excited to welcome Consonance Capital to the building,” said Craig Deitelzweig, president and CEO of Marx Realty. “Leasing velocity and demand at 545 Madison has outperformed most office buildings in the area and the success we’ve seen here is proof positive that an inviting sensory experience is incredibly attractive to office users. It’s representative of how attractive and truly special this hospitality-infused repositioning strategy has been across our entire portfolio.”
A Cushman & Wakefield team led by Tara Stacom represented Marx Realty and Cynthia Wasserberger and Michael Pallas of JLL represented Consonance Capital. The term is five years and asking rents at the building are $86-126 per s/f.
The repositioned 545 Madison features a uniquely luxe sensibility with a warm and welcoming vibe that appeals to office users ranging from financial services firms to luxury brands. The sensory journey starts at the entrance; the front of the building was completely transformed, including a uniformed doorman and a redesigned lobby featuring warm materials and soft curves, sophisticated mood music and Marx Realty’s signature scent.
With Baccarat joining the tenant roster in December 2023 and committing to a co-branding program at 545 Madison, the well-appointed lobby will feature some of the brand’s most recognizable accent pieces. From the simple sophistication of its Lady Crinoline Chandelier and Harcourt pendant lights to the bold luxury of the Zenith Red Chandelier – with select pieces custom-crafted for the building – the lobby at 545 Madison will welcome tenants and guests with a high-profile marriage of two extraordinary brands. The serenity of the lobby library and various nooks with plush velvet seating, combined with soft curves and walnut wood-clad walls will punctuate a decidedly sophisticated ambiance reminiscent of a luxury hotel lobby.
The eighth-floor club lounge at 545 Madison, known as the Leonard Lounge and named in honor of Leonard Marx, the founder of Marx Realty, is reminiscent of a members-only club. The design is an homage to Leonard’s personality – bold, ahead-of-its-time and forward-thinking – with features that are represented in the thoughtful details that make up the space. Comprising 7,000 square feet of indoor/outdoor lounge space, the Leonard Lounge boasts a café, a 2,000-square-foot landscaped terrace, a 40-seat boardroom and a ceiling-suspended fireplace. The addition of Baccarat fixtures, barware and accessories in the tenant lounge will add another layer of luxury and round out the authentic ambiance of the space.
Current tenants include financial software and applications developer GTS (the first to sign at 545 Madison soon after Marx presented its plans for the building); French luxury house and manufacturer of fine crystal, Baccarat; private equity firms Snow Phipps, Kohlberg, Vialto Partners and Orangewood Capital as well as additional top-tier wealth management and private equity firms.
David Burns and Kristin Kaiser of Studios Architecture worked with Marx Realty’s in-house design team to reimagine the lobby and amenity spaces at 545 Madison.
Consonance Capital to Move to Marx Realty’s 545 Madison
Healthcare investment platform Consonance Capital has leased 9,473 square feet at Marx Realty’s 545 Madison office building, recently co-branded with Baccarat. Consonance Capital will move from 1370 6th Avenue in Midtown. The building’s largest tenant, a confidential real estate holding firm, extended its 42,000-square-foot lease for five more years, leaving 9,500 square feet available, according to a release from Marx Realty.
“Leasing velocity and demand at 545 Madison has outperformed most office buildings in the area and the success we’ve seen here is proof positive that an inviting sensory experience is incredibly attractive to office users,” said Craig Deitelzweig, president and CEO of Marx Realty.
A Cushman & Wakefield team led by Tara Stacom represented Marx Realty, while JLL’s Cynthia Wasserberger and Michael Pallas represented Consonance Capital. 545 Madison features tenants including GTS, Baccarat, Snow Phipps, Kohlberg, Vialto Partners, and Orangewood Capital.
Consonance Capital to move its New York City office to 545 MadisonBy Julian Nazar – Staff Reporter, New York Business Journal | Jun 11, 2024
The amenities at 545 Madison Ave. include an eighth-floor club lounge called “Leonard Lounge.”
Consonance Capital has signed a five-year lease to move its New York City office to 545 Madison Ave. The health care investment platform previously had its office in a similar-sized space at 1370 Sixth Ave. in Midtown for 10 years. The company is expected to open its new office in two months. Asking rents at the building range from $86 to $126 per square foot.
JLL’s Cynthia Wasserberger and Michael Pallas represented Consonance Capital on the deal. A Cushman & Wakefield team led by Tara Stacom represented the landlord, Marx Realty.
The 18-story, 140,000-square-foot office tower features a redesigned lobby with warm materials and soft curves, sophisticated mood music and Marx Realty’s signature scent, plus an eighth-floor club lounge called “Leonard Lounge” that includes a café, a 2,000-square-foot landscaped terrace, a 40-seat boardroom and a ceiling-suspended fireplace.
“Leasing velocity and demand at 545 Madison has outperformed most office buildings in the area, and the success we’ve seen here is proof positive that an inviting sensory experience is incredibly attractive to office users,” Marx Realty CEO Craig Deitelzweig said in a statement. “It’s representative of how attractive and truly special this hospitality-infused repositioning strategy has been across our entire portfolio.”
Notable tenants at the building include investment advisory firm Helix Partners and French luxury crystal line Baccarat, along with private equity firms Snow Phipps, Kohlberg & Co., Vialto Partners and Orangewood Partners.