By The Editors July 5, 2026 9:00 am
reprintsYesterday was July 4 — the 250th anniversary of the signing of the Declaration of Independence and with it the creation of the greatest democracy on Earth.
But, for a number of real estate companies, the fireworks arrived well in advance of the holiday.
Last week kicked off with British investor Bridgepoint Group throwing down $1.4 billion to buy South Florida-based Kayne Anderson Real Estate.
Boom.
The very same day, Blackstone finalized the sale of three Northern Virginia data centers to Digital Realty Trust for $3.5 billion.
Boom boom!!
But not to be outdone, Starwood announced that it had closed a $10.2 billion opportunistic fund for data center investment. Now, there’s something you don’t see every day.
While those big billion-dollar-plus deals burned bright, leasing also exploded.
Cerberus Capital Management renewed its whopping 131,000-square-foot lease at Global Holdings’ 875 Third Avenue and Target announced a 15-year, 135,000-square-foot lease at the former Alexander’s in Queens’ Rego Park Shopping Center.
The former lease is indicative of the health of the New York City office market which — as per Colliers second-quarter office report — shows the strongest leasing velocity since 2002.
Volume doubled to some 11.02 million square feet, and asking rents edged up 5.7 percent annually — rising to $78.03 per square foot.
A lot of this was driven by law firms (they accounted for roughly 30 percent of the leasing) such as Cleary Gottlieb Steen & Hamilton taking a head-spinning 475,000-square-foot lease at One Liberty Plaza, or Simpson Thacher & Bartlett taking a monster 916,000-square-foot lease at Extell’s 570 Fifth Avenue.
This is, of course, reason to celebrate. But the interesting thing is that this resurgence in office is not strictly a New York phenomenon. L.A.’s moribund office market is finally showing signs of life. (It took bloody long enough.)
According to a new Savills report, there was a 15 percent uptick in office leasing from the previous quarter, which means there were some 4 million square feet of office leases signed across Greater Los Angeles, and it’s 8 percent more than last year.
Oh, and Miami had real reason to be happy — that city’s office leasing volume shot up 45 percent from the previous quarter!
More than that, rents are 57 percent higher than they were just five years ago!
(Speaking of big things happening in South Florida, we would be remiss if we didn’t also mention that Simon Property Group wants to expand a 1.7 million-square-foot mall it owns in Boca Raton.)
Sheesh. What happened to the days when summer was slow?
Can we get to the bad news already?
Yes, there are still special servicings and foreclosures on problem properties, but a lot of New York real estate players are still reeling from the Rent Guidelines Board vote last month to freeze rents on stabilized apartment buildings — and as maintenance costs rise some landlords are examining their legal options.
“The statute requires the board to consider actual data in setting the rent guidelines,” said Zachary Rothken, head of the administrative law department at the law firm Rosenberg & Estis and himself a member of the Rockland County Rent Guidelines Board in upstate New York.
“There was even a document that’s available online, published by the RGB, where they provide commensurate rent adjustment formulas based on the data, and those range between 3.4 percent to 4.5 percent for a one-year lease, and 4.8 to 8.5 percent for a two-year lease. So, to just go ahead and vote 7-1 on the 0 percent and 0 percent [increases] reeks of predetermination, and total non-consideration of the data as required by law.”
One thing that will bring down the cost of housing is to build more of it. And it does appear that New York City is taking this seriously, and so are some private developers — we just wish we didn’t have to lose some of Gotham’s beloved bowling alleys to do it.
And, while the office markets in New York, L.A. and Miami all notched noticeable gains in the second quarter, new numbers for D.C. show that market still struggling with high availability (unless you’re a trophy building).
A right to privacy — or, at least private equity
Last week CO published our private equity issue, and now that you have gotten the ringing from the fireworks out of your ears, it’s a good one to examine before work tomorrow.
We spoke to Christopher Merrill, the head of Harrison Street Asset Management, who took a firm that had an AUM of about $55 billion last year and doubled it to $109 billion this year.
We profiled HSF Kramer’s resident private equity guru, Seth Niedermayer, whose client list includes heavies like Mitsui Fudosan America, Hudson Bay Capital Management, BlackRock, Vici Properties and LCN Capital Partners. (Wait a second… was the Niedermayer on the Whitestone bowling alley deal a relative?)
We looked at how the major figures of finance are finally embracing …. well, maybe that’s too strong a word… coming to terms with cryptocurrency in their real estate deals.
Finally, we took a look at Blue Owl, which had some definite ups — but a few downs — as one of the dominant figures in private credit’s investment in data centers.
See you next week!