Manhattan Office Market Hits 19-Year Leasing High

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Good morning. Turns out, office isn't dead—it just moved to Park Avenue. NYC is rewriting the return-to-office story with big leases, booming demand, and billion-dollar buildings.

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Market Snapshot

Office Rebound

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• Office headquarters innovation: Dolfin collaborated with Swift Real Estate Partners to unlock capital and enhance operational flexibility through a tailored lease solution. (sponsored)

• Layoffs begin: Hundreds of HUD employees—particularly in Fair Housing—are being laid off as the government shutdown drags on.

• The Fed says: The Fed’s September minutes show commercial real estate lending remains modestly active despite rising CMBS delinquencies.

• Population pop: Texas dominates the list of America’s fastest-growing cities, with 12 of the top 15 from 2020 to 2024.

• Buyout boost: Brookfield is acquiring the remaining 26% of Oaktree Capital for $3B, strengthening its position in the booming credit market.

• Double digits: With interest rates easing and capital flowing back into the market, CRE lending is projected to rise 30% in 2025 and another 35% in 2026.

• Momentum rebound: LightBox’s CRE Index hit a 2025 high in September, driven by rising listings and renewed lender confidence after a Fed rate cut. 

• Regional recession: Despite strong national GDP and job numbers, Moody’s data reveals that 22 states are in recession and 13 more are stagnating. 

• Transfer trouble: Efforts to roll back L.A.’s Measure ULA are gaining steam as critics cite stalled deals and missed revenue goals.

• Supply myths: Critics say big homebuilders are driving up prices, but data shows they’re building steadily—not holding back supply for profit. 

• Housing reset: U.S. rents dropped 2.1% YoY in September, marking the 26th straight decline, with affordability improving as incomes rise and new supply softens prices.

• Density dispute: More than a dozen Colorado cities may lose access to $280M in state grants for failing to adopt housing density laws. 

• Luxury leverage: Interstate Equities secured a $145.75M Freddie Mac loan to refinance its 400-unit Bryant at Yorba Linda property.

• Portfolio pivot: Priced out of housing, more young Americans are investing in stocks and crypto instead, challenging homeownership as the traditional path to wealth.

• Bubble watch: Despite Wall Street warnings and rising risks from overleveraged spending and AI startup exposure, data center real estate leaders say fundamentals remain strong.

• Empty icon: A year after completion, Logistics Property Co.’s 1.2M SF multistory warehouse on Goose Island remains empty and is now for sale.

• Disclosure mandate: Governor Newsom signed SB 709, requiring self-storage operators to disclose rental terms and promotional pricing, but stopping short of imposing rent caps.

• Mega investment: Amkor is investing $7B in a new Arizona facility to package and test chips for Apple and Nvidia, aiming to boost U.S. chip supply chains by 2028.

• Grocery grab: Publix bought the 207K SF Hammocks Town Center in Kendall for $72M, adding to its $344M South Florida shopping spree.

• Denim doubles: Levi’s is weighing plans to double its 458 U.S. stores after a strong third quarter, as CEO Michelle Gass pushes for sharper retail execution and continued growth.

• Pro power: Lowe’s closed its $8.8B deal for Foundation Building Materials, expanding its pro network with 370 new locations.

• Monster market: Consumers will spend a record $13.1B on Halloween, lifting discount, home, and craft retailers as Party City fades. 

• Trail trouble: REI will close flagship stores in New York, Boston, and Paramus amid falling outdoor gear demand and weaker discretionary spending.

• Silicon sublet: Cloud platform startup Vercel leased 42,000 square feet at 201 Mission St. in San Francisco, helping shrink the city’s sublet space. 

• Sweet lease: Frazer’s 150K SF HQ lease in Sugar Land fueled Houston’s second straight quarter of positive absorption. 

• Office drought: DFW office construction has hit a 13-year low, even as Class A properties drive leasing demand and rising rents amid tenants’ ongoing flight to quality.

• AI anchor: Salesforce will invest $15B in San Francisco to launch an AI hub and boost workforce programs, fueling the city’s tech and office revival.

• Boston backbone: BNY renewed its 205,000-square-foot lease at One Boston Place, signaling continued demand for high-quality downtown office space.

• Tourism dip: Las Vegas hotels and real estate developers are offering discounts and delaying projects as tourism declines, occupancy falls, and economic uncertainty curbs demand. 

• Corporate luxe: Oracle is teaming up with Nobu Hospitality to build a 120-room luxury hotel and restaurant as part of its $1.2B Nashville headquarters campus.

📈 CHART OF THE DAY