Two Manhattan developers saw all their chips cruelly disappear in the blink of an eye last week.<\/p>\n
On Wednesday the Community Advisory Committee (CAC), tasked by state officials with reviewing the bids for three new downstate gaming licenses, shot down<\/a> SL Green<\/a> Realty, Caesars Entertainment<\/a> and Roc Nation<\/a>\u2019s $5 billion-plus proposal for a casino in Times Square at 1515 Broadway.<\/p>\n SEE ALSO: Pioneering CMBS Creates Unique Background for California Governor Run, Ethan Penner Says\u00a0<\/a><\/p>\n An hour later, the CAC put the kibosh<\/a> on the $7 billion proposal from Silverstein Properties<\/a>, Rush Street Gaming<\/a>, Greenwood Gaming and Entertainment<\/a> and Hyatt<\/a>\u2019s partnership for a 2,200-unit development (500 units would be affordable) and casino called The Avenir at 11th Avenue and West 41st Street.<\/p>\n For those of us observing the drama from afar, it was a very abrupt ending to a process that had dragged on for years. For the 1515 Broadway proposal, SL Green had won endorsements from political figures<\/a>. It formed a partnership with Jay-Z<\/a>. It wooed<\/a> local landlords.<\/p>\n But it wasn\u2019t enough.<\/p>\n Silverstein had been less flashy and public in its moves, but one might have argued that being situated several avenues west of Times Square might be an advantage. Alas, no.<\/p>\n \u201cObviously, we are disappointed that our West Side elected officials didn\u2019t see a path forward for The Avenir project,\u201d Dino Fusco, chief operating officer Silverstein, said after the decision. \u201cWe are grateful to everyone who has supported this project and partnered with our team throughout this process and appreciate their confidence in our vision for the Far West Side.\u201d (SL Green\u2019s Marc Holliday took a different tack, calling the decision \u201ca despicable display<\/a> of cowardice.\u201d)<\/p>\n There are still a half-dozen proposals out there. We\u2019ll see who gets knocked out<\/a> next.<\/p>\n Fed up? No, down<\/b><\/p>\n On the national stage, the big news of last week was the Federal Reserve\u2019s decision to lower its benchmark interest rate<\/a> by 25 basis points \u2014 its first cut in nine months. (The Fed also indicated that more cuts were likely this year.)<\/p>\n Of course, the elephant in the room re: the Fed is its ongoing battle with the executive branch. President Trump has been pushing for control<\/a> of the Fed, demanding lower rates, and attempting to remove Biden appointee Lisa Cook from the governing board. This has made many people nervous.<\/p>\n \u201cThe process has largely worked pretty well through the years keeping an independent Fed, and I think we would see much more volatility if the Fed got more politicized,\u201d said Flushing Bank<\/a> President and CEO John Buran. \u201cI certainly feel it\u2019s within the purview of the president to make his thoughts known, and clearly he has, but I think that a more politicized Fed would be detrimental to the capital markets in general and have repercussions beyond what we can even see.\u201d<\/p>\n And, while the nervousness remains, this hasn\u2019t affected money going out the door.<\/p>\n For instance, David Halberstam (not \u201cThe Best and Brightest\u201d Halberstam<\/a>) scored $80 million<\/a> in construction financing from S3 Capital<\/a> to build a new rental at 303 East 44th Street.<\/p>\n Urban Catalyst<\/a> got $112.5 million in construction financing<\/a> from Beach Point Capital<\/a> for its 278-unit Aquino San Jose project in Downtown San Jose.<\/p>\n And Nord Development<\/a> Group and Acre<\/a> secured $114.2 million of construction financing<\/a> and mezzanine debt from Bank OZK<\/a> and PGIM Real Estate<\/a> to get a 262-unit complex called Patchogue on Long Island underway.<\/p>\n At the same time, big money is being raised. Alexander Shing\u2019s L.A.-based Cottonwood Group<\/a> just closed a $1 billion closed-end fund<\/a> for industrial logistics warehouses, data centers, multifamily apartments and new developments in general.<\/p>\n Also last week San Francisco-based Bridge Housing<\/a> announced it was deploying $1 billion<\/a> as part of its Bridge Housing Impact Fund I to buy, build, or preserve West Coast affordable housing.<\/p>\n Did somebody say \u2018housing\u2019?<\/b><\/p>\n Of course, a lot of people\u2019s ears perk up at the mention of affordable housing \u2014 or non-affordable housing, for that matter.<\/p>\n J.P. Morgan<\/a> was awarded<\/a> its Freddie Mac Targeted Affordable Housing Optigo lender license, which opens up many more affordable housing options to J.P. Morgan customers.<\/p>\n Silverstein Properties<\/a> and Metro Loft Management<\/a> are hoping for a big payday, having put their 344,000-square-foot multifamily conversion at 55 Broad Street on the market for a staggering half-billion dollars<\/a>.<\/p>\n Foxy Development<\/a> (good name!) and Selfhelp Realty Group<\/a> (another good name!) are converting<\/a> the former Parkway Hospital building at 70-35 113th Street in Forest Hills, Queens, into a 145-unit mixed-use affordable senior housing center and 34,000-square-foot Jewish center.<\/p>\n Likewise, Rudin<\/a> is officially planning a massive, 411-unit conversion<\/a> of its office building at 845 Third Avenue. (Although given some of the leases we saw this week, we\u2019d be tempted to stay in office. Salesforce<\/a> took an extra 71,000 square feet<\/a> at 3 Bryant Park; Bank of New York<\/a> Mellon Corporation took over a sublease for 192,000 square feet<\/a> at One World Trade Center; and in Florida ServiceNow<\/a> is taking a whopping 200,000 square feet<\/a> at Stephen Ross\u2019s 10 CityPlace in Downtown West Palm Beach.)<\/p>\n Power SoCal<\/b><\/p>\n Tomorrow is the first day of fall, and that means all sorts of cold, damp weather enveloping the East Coast.<\/p>\n We don\u2019t know about you, but we\u2019re going to be thinking about sunny California.<\/p>\n While Los Angeles has had its share of bad breaks<\/a> in the last year, its office market is actually having a (slightly) interesting rebound<\/a>.<\/p>\n According to Newmark<\/a>, there was $1.8 billion in office investment sales<\/a> in the first half of this year, with second-quarter sales volume at twice what it was in 2024. (Granted, with steep discounts and a huge part of the inventory essentially unrentable.)<\/p>\n And the people who have been seizing buying opportunities<\/a> are among the steadiest hands in the business \u2014 companies like Douglas Emmett<\/a> Management and Jamison Services<\/a> \u2014 who know what to do with this real estate.<\/p>\n All of which gets us in a proper frame of mind for Power SoCal<\/a>, our annual list of the most important people in Southern California real estate.<\/p>\n It is worth a good, long look. We\u2019re sure that after you read about the Olympiads of the profession, you\u2019ll be itching to spend the rest of the year out there, too.<\/p>\n Speak to you next week \u2014 and, for those who observe, happy new year!<\/p>\n \t