Blackstone, Blackstone! – Trade Observer
Do you remember the scene in “Being John Malkovich” when John Malkovich crawls inside his own intracranial portal and is thrust into a universe of John Malkovich singing, rejoicing and laughter as far as the eye can see? Where everyone around him shared the same bald, sui generis look and every word that came out of their mouths was simply, “Malkovich, Malkovich”?
It sometimes looks a bit like this when writing about Blackstone and real estate. Everything is Blackstone, Blackstone, Blackstone, Blackstone…
This week, the ubiquitous megacorporation announced a new life sciences fund called Blackstone Life Sciences Yield with $1.6 billion to play with.
This would be a milestone for almost any business. But earlier in the week, he made a deal more than eight times bigger: the Acquisition for 13 billion dollars of American Campus Communitiesthe largest developer and owner of off-campus student housing in the United States.
And, because this constitutes a slow week for them, or something like that, Blackstone has also expanded its footprint at 601 Lexington Avenue, owned by Boston Properties. per 200,000 square feet. (Don’t these people have kids over spring break?)
There are other businesses in the world, you know, and other businesses are happening, mostly, it seems, on Madison Avenue.
There’s Park Group Tower, for example, whose 535 Madison Avenue saw Bain Capital and FTV Management Company take a total of 29,765 square feet.
Second, Standard Security Life Insurance Company of New York signed a 10-year lease on 11,314 square feet at 488 Madison Avenue of the Feil organization.
And, across the street at 485 Madison Avenue from Jack Resnick & Sons, the Washington, D.C.-based Zuckerman Spaeder law firm took a full floor spanning 14,101 square feet.
But, even beyond Madison Avenue, leases were signed. At One Vanderbilt, Canada-based waste management company, GFL Environmental took up 9,871 square feet. At 817 Broadway, 25Madison Venture Capital Firm grabbed 9,943 square feet. And The World Monuments Fund (WMF), a non-profit organization dedicated to historic preservation, is moving to 7,981 square feet at 600 Fifth Avenue in Tishman Speyer.
In Long Island City, the Finback Brewery announcement plans to open a 3,800 square foot microbrewery and bar at the foot of the Durst organization’s luxury apartment building, Sven, at 29-59 Northern Boulevard (speaking of Durst, this week he also landed $100 million in funding from JPMorgan Chase to renovate 825 Third Avenue, something to drink!), and Opentrons, a company that builds laboratory robots, signed a massive agreement 94,000 square foot lease to nearly double its space at 45-18 Court Square.
Finback wasn’t the only retail bargain last week either; the big problem was Google opening of a new point of sale of 3,980 square feet at 134 North 6th Street in Williamsburg (with approximately the same size cellar space). It’s one to stop anyone in their tracks. But Showfields – the store that mixes retail with art and theater — also go opened in Williamsburg at 187 Kent Avenue, known as Kent House. And fashion accessories retailer BAGGU, home of the $34 duck bag, took 2,400 square feet at 91 Grand Street in SoHo.
Don’t forget Florida, Florida!
It was just New York retail, folks. South Florida is also on board with Frette, the luxury bedding store, and Ara Vartanian, the Brazilian jeweler, each taking up space in the super chic Bal Harbor Shops. (Oh, and Maria Tash, another famous jeweler who operated a pop-up at the mall, basically put a ring on it: He took a 3,300-square-foot lease at the mall.)
And in Fort Lauderdale, Canada-based candle vegan restaurant PLANTA Queen opened a 4,400 square foot outpost at 1201 E Boulevard Las Olas.
Of course, it wasn’t all commercial leases. There were also other leases, such as Aon, the global professional services company, taking up 18,634 square feet at 701 Brickell Avenue, and Keralty Hospital Miami, formerly known as Westchester General Hospital, is grabbing a 13,800 square foot lease for another location at MedSquare Place, a new medical practice development 10 miles west of Miami.
Our old friend Harry Macklowe has made his official foray into South Florida. The developer and art collector extraordinaire has invested $31.9 million for a vacant parcel of 1.64 acres between Dadeland Mall and the Metrorail tracks of Rilea Group and Euroamerican Group, with plans for a rental of 650 units in two buildings.
But even more eye-catching, according to public records, someone by the name of Randall Davis (an individual of whom, unfortunately, we know nothing) spent $363 million on a large developable parcel along the water at 1201 Brickell Bay Drive, buying it from Florida East Coast Realty and making it one of the most expensive land trades in Miami history. (We may have some work to do trying to find out more about the mysterious Mr. Davis.)
Sales also increased beyond South Florida. In downtown Los Angeles, Laguna Point Properties fell $402 million on a portfolio of 1,037 apartments from developer Barry Shy. While that’s some $387,657 per unit, it might not be such a lavish investment. Rents in Southern California have skyrocketed to more than double the rate of inflationaccording to a new report from NAI Capital.
In Washington, DC, Jair Lynch Real Estate Partners is partnering for the fifth time with Nuveen Real Estate for its purchase of Jamison at Dakota Crossing, a 236-unit apartment complex, for $78 million. And DC-area apartment rents are skyrocketing, too: The past 12 months had the highest annual growth rate in decadesaccording to a report by Marcus & Millichap.
And outside of the multifamily world, there have been some bolder sales this week; Harrison Street, the Chicago-based alternative asset investment firm (which has approximately $44 billion in assets) sold its 1.2 million square foot national healthcare portfolio and 27 properties in 10 states to NorthWest Healthcare Properties for $600 million.
In New York, SL Green Realty Corp. reversed a years-long trend of selling assets buy something – and not just anything. An office building! In this case, the property in question is 450 Park Avenue in Midtown, for which the real estate investment trust paid $445 million to Oxford Properties and Acquisitions of the Crown.
ZG Capital and Bobby Zar’s Rialto Capital Management set up $105 million to buy 45 East 53rd Street which was once Santander’s New York headquarters, from MEK Management Services – but it’s probably worth noting that the deal is about 12.5% less than what MEK bought the office tower ago ten years.
And CBRE Investment Management acquired two warehouses operated by Amazon at 12555 Flatlands Avenue and 12595 Flatlands Avenue in Brooklyn East New York in a $230 million cash deal from Wildflower.
And, now, to take his mind off Blackstone…
We’ve been thinking a lot about proptech lately. On the one hand, Commercial Observer hosted its own proptech virtual forum a week ago (the first in a series) where some of the biggest names in proptech were explaining what was happening in the industry.
Second, CO co-sponsored with the Real Estate Board of New York the PropTech Challenge 2022, now in its fifth year. In fact, CO was one of the judges in the competition for recognition of innovative new technologies that will help New York City buildings achieve net zero carbon emissions.
And reducing carbon emissions in buildings is something that has the attention of the highest levels of city and state government; this week, the New York State Energy Research and Development Authority, Empire State Realty Trust (ESRT), Durst, Vornado Realty Trust and Hudson Square Properties unveiled a online guide for making the buildings compliant with Local Law 97, and the press conference introducing the initiative at the Empire State Building featured remarks from Mayor Eric Adams, Governor Kathy Hochul and former President Bill Clinton, in more Tony Malkin from ESRT.
See you next week!