Cushman & Wakefield picked up both honors at the Real Estate Board of New York’s 19th annual Retail Deal of the Year awards tonight in Midtown—with Joanne Podell winning “Most Ingenious Deal of the Year” for her role in bringing Nike to 650 Fifth Avenue in Midtown, and Kenji Ota taking the “Most Significant Deal of the Year” prize for the National Football League and Cirque du Soleil’s deal at 701 Seventh Avenue in Times Square.

Podell, an executive vice chairman at C&W, and Ota, an executive director at the brokerage, were among the 14 nominated transactions vying for REBNY’s top retail honors, including deals helmed by the likes of CBRE, Colliers International, Lee & Associates NYC, RKF, SCG Retail, Ripco Real Estate, Lansco Corporation and Newmark Knight Frank.

It is the third REBNY award for Podell, who won for displaying “exceptional broker acumen” in negotiating one of the largest and most lucrative retail deals of 2016: Nike’s massive 70,000-square-foot flagship store at the SL Green Realty– and Jeff Sutton-owned high-end storefront between West 51st and West 52nd Streets. Podell represented Nike in the transaction.

After receiving her award at the REBNY soiree, held at Club 101 at 101 Park Avenue, Podell told Commercial Observer it was “the most exciting deal I ever worked on.”

Ota, who joined C&W after departing NKF in 2014, won the first REBNY award of his career for his work in arranging the NFL and Cirque du Soleil’s unique 40,000-square-foot retail and entertainment concept at the Steven Witkoff-owned 701 Seventh Avenue, also known as 20 Times Square.

“There were so many great deals this year; all 14 entries were really good,” Ota told CO, expressing both surprise and delight at being awarded the “Most Significant Deal” honor. He noted that work on many of the transactions up for the REBNY awards “started before last year, [during] the peak of the market,” making the selection of nominees particularly competitive.

Podell and Ota’s deals were inked in 2016, in what was an altogether miserable, downcast year for the retail business, both in New York and nationally.

Other brokers on hand for the event this evening were CBRE’s Lon Rubackin, who was nominated alongside colleague Gary Trock for their role in bringing a National Geographic-branded exhibition space to 226 West 44th Street. The deal was not straightforward by any means, Rubackin told CO, given that Kushner Companies went into contract on the retail condominium at the  former New York Times Building during negotiations. In the end, Rubackin and Trock were “able to get it over the line,” he said.

NKF’s Jeffrey Roseman was also in attendance, having been nominated with colleague Marc Frankel for arranging Cinemex’s lease for a new movie theater at Edison Properties’ 400 East 62nd Street. Roseman said he was proud that the Upper East Side location, which for years had held a Clearview Cinemas, remained in use as a movie theater rather than another use that “wouldn’t have had the same impact on the neighborhood.”

Robert K. Futterman was in a jovial mood, and for good reason. The RKF founder, chair and chief executive officer himself was nominated on three of the 14 entries up for the REBNY awards: Under Armour’s deal at the GM Building at 767 Fifth Avenue; Target’s lease at 500 East 14th Street; and Whole Foods’ transaction at One Wall Street.

When prompted for his take on the current state of the retail business, Futterman had wise words to offer: Any company today that is slow to embrace technology “as a part of their business is not going to succeed,” he said. “And retail is no different.”

The panel of judges who voted on the awards included CO’s Lauren Elkies Schram, Christopher Conlon of Acadia Realty Trust, Fred Posniak of Empire State Realty Trust and Jessica Lappin of the Downtown Alliance.

Republican candidate for mayor, Paul Massey, kicked off Commercial Observer’s annual Power Gala event Wednesday at the Park Hyatt, celebrating the publication’s annual Power 100 and Power 50 lists, sniping at one of the honorees who wasn’t in attendance: Mayor Bill de Blasio (who ranked number 35 on the Power 100).

“You may have heard, I’m looking at a very interesting piece of real estate. It’s a big yellow mansion at [East] 88th and the East River,” Massey, the event’s keynote speaker, told the assembled crowd of some of the top real estate executives in the country (never mind the city). “The current tenant doesn’t want to leave. I plan of booting him out in November.”

But the discussion of politics at the gala was generally light. Throughout Massey’s speech and the honorees’ remarks, there was gentle but audible chatter from the crowd. The interest wasn’t fixed on the dais; after all, how often are this many bold-faced names (at least as far as the real estate industry is concerned) in the same place at the same time? Networking needed to be done.

Related Companies’ Stephen Ross and Bruce Beal, SL Green Realty Corp.’s Andrew Mathias and Marc Holliday, Blackstone Group’s Jonathan Gray, Cushman & Wakefield’s Bruce Mosler and John Santora, RXR Realty’s Scott Rechler, Avison Young’s Arthur Mirante and Mitti Liebersohn, Ackman-Ziff’s Simon Ziff, Starwood Property Trust’s Jeff DiModica, J.P. Morgan Chase’s Chad Tredway, Bank of China’s Raymond Qiao were just a few of the bigwigs found hobnobbing at the party, and drinking from the martini bar, which had been provided by Himmel + Meringoff. Naturally, company founders and Power 100 award recipients Leslie Himmel and Stephen Meringoff were there.

Taryn Brandes of SCG Retail received the Rising Star honor. Design of the Year went to Diller Scofidio + Renfro and the Rockwell Group for its movable building The Shed at Hudson Yards.

And the trio of C&W’s Joanne Podell, Wharton Properties’ Jeff Sutton and Mathias of SL Green earned CO’s Deal of the Year award for the $700 million, nearly 70,000-square-foot lease Nike signed at 650 Fifth Avenue. The transaction, which also pulled in the Real Estate Board of New York’s “Most Ingenious Deal of the Year” award, involved office and retail tenant buyouts and negotiations with the governments of Iran the United States, Podell said.

The U.S. and Iran owns the building at 650 Fifth Avenue, and Sutton and SL Green have a leasehold on the retail portion of the tower, as CO previously reported.

Podell described how Sutton invited her to Shelter Island and on the back of the napkin from a chocolate sundae they hashed out the terms of the deal, which “never changed.”

“[Jeff] said you have to eat this chocolate sundae. I didn’t want to eat a chocolate sundae. But everyone else was,” Podell said. “Dealing with the government of Iran and the U.S. government? Not exactly on my resume, but thank goodness for these two guys.”

Billionaire real estate investor Jeff Sutton, the founder of Wharton Properties, is known for bringing upscale European retailers to high profile Manhattan store-fronts.

But this week, the real estate investor is going to Italy, where he’s using quite a bit of lucre to throw his daughter Renee an estimated $15 million wedding on a private beach, as was first reported by the Italian press.

The real estate investor has taken over Monopoli, Italy’s Lido Santo Stefano beach resort in the Puglia region for the ceremony on Aug. 31, where his daughter will be wed to Eliot Cohen, Italian magazine Panorama reported.

Panorama (and many other Italian publications) previously said the wedding would cost an insane $25 million, but a source told CO the correct number is 35 to 40 percent lower for the nuptials; there will be more than 400 guests, according to the magazine, and eight tons of flowers for the occasion. The couple is staying at the ultra exclusive Borgo Egnazia hotel, a five-star destination. Three planes are bringing guests from Newark Liberty International Airport to Puglia for the event, which lasts a few days. The flights were catered by kosher airline caterer Borenstein Caterers. And a 20-page kosher menu is being prepared for the wedding. Ivanka Trump, daughter of President Donald Trump, is rumored to be attending, according to The Guardian.  

Sutton is worth $3.6 billion and ranked as the 522nd richest person in the world, according to Forbes and was number 10 on this Commercial Observer’s Power 100 this year. Sutton is known in real estate circles for his retail properties in high-profile shopping corridors in Manhattan such as Fifth Avenue, Times Square, Madison Avenue and Soho and 125th Street.

Last November, he completed a deal with Nike and partner SL Green Realty Corp. for a nearly 70,000-square-foot lease at 650 Fifth Avenue worth $700 million over 15 years. The deal picked up “Most Ingenious Deal of the Year” honors from the Real Estate Board of New York as well as the “Deal of the Year” award from CO.

In 2015, Sutton and General Growth Properties closed on a $1.78 billion deal for the Crown Building at 730 Fifth Avenue from Spitzer Enterprises and Winter Properties, as CO reported at the time. The partnership then sold the office section of the tower to Capital Group and SHVO for $500 million. And Sutton later re-signed Italian jewelry and accessories designer Bulgari to a new 15-year, 3,675-square-foot deal in the building.

Update: This article was updated to include the accurate total cost of the wedding.

German lender Aareal Bank provided SL Green Realty Corp. and partner Jeff Sutton’s Wharton Properties with a $225 million package to refinance the firm’s retail space at 650 Fifth Avenue, on which the partners hold a long-term leasehold.

The loan replaces a previous $97 million Aareal mortgage from 2014, and provides an additional $128 million in bridge financing, according to property records.

In 2013, SL Green and Sutton acquired a 49-year leasehold for the existing 30,000-square-foot retail portion of the 36-story, mixed-use office tower, The Wall Street Journal reported at the time, and moved to clear additional square footage.

Nearly a year ago, CO first reported that the joint venture completed a deal with Nike to give the sports apparel brand nearly 70,000 square-feet at the location on a lease worth $700 million over 15 years.

A source with knowledge of the Nike lease deal told CO at the time that Sutton and SL Green “added floors to the retail box to make it over 60,000 square feet.” Together, with the additional retail floors, the partners bought out the leases of Godiva and Devon & Blakely, located in the building’s lower level, which gave Nike 100 feet of frontage on Fifth Avenue. The deal nabbed “Most Ingenious Deal of the Year” honors from the Real Estate Board of New York as well as the “Deal of the Year” award from CO.

Jeff Sutton did not immediately return a request for comment. A spokeswoman for SL Green did not immediately return a request for comment, and officials at Aareal Bank could not immediately be reached.

When Brookfield Property Partners lodged a $14.8 billion takeover bid for GGP last month, it raised the possibility of one of the biggest real estate mergers and acquisitions seen in recent years—one that would create a massive company with nearly $100 billion in assets globally and annual net operating income of roughly $5 billion, Brookfield said in announcing the bid.

It also marked the latest chapter in the tumultuous history of the Chicago-based real estate investment trust formerly known as General Growth Properties. The past decade, in particular, saw GGP emerge from the wreckage of one of the biggest real estate bankruptcies in history in 2009—when it was unable to refinance more than $27 billion of debt in the wake of the financial crisis—to re-establish itself as one of the nation’s major players in the Class A mall space, with assets ranging from prestigious shopping centers in Honolulu and Southern California to high-street storefronts on Fifth Avenue.

GGP’s renaissance has come under the guidance of Sandeep Mathrani, who left his role as head of Vornado Realty Trust’s retail division to become the REIT’s chief executive officer in 2010, when the company was just getting back on its feet after the bankruptcy. With the help of investment from the likes of Brookfield and hedge fund investor Bill Ackman’s Pershing Square Capital Management, GGP shed dozens of properties, rid itself of burdensome holdings by spinning off Rouse Properties and the Howard Hughes Corporation into standalone companies and exiled to the past the legacy of the Bucksbaum family—which founded General Growth Properties in the 1950s but also oversaw its descent into financial ruin. Today, GGP has regained its status as one of the largest publicly traded owners and operators of retail properties in the U.S., with a portfolio of more than 120 properties spanning roughly 123 million square feet.

Yet, the Brookfield takeover proposal comes at a significant juncture for both the company and the market in which it specializes. The challenges facing the brick-and-mortar retail sector today have been well documented, with the Amazon-fueled rise of e-commerce having contributed to store closures at a rate unseen since the Great Recession.

Though GGP’s profile as an owner of high-quality, Class A malls has insulated it somewhat from headwinds that have most heavily impacted Class B and Class C malls and shopping centers throughout the country, the company has not been altogether immune from the great retail apocalypse of 2017. The struggles of department stores like Sears, Macy’s and J.C. Penney, which historically were counted on as mall anchor tenants capable of driving customer traffic, have prompted GGP to spend more than $2 billion to redevelop roughly 9 million square feet of space across its portfolio—mostly “anchor boxes” formerly occupied by such department stores that it has sought to reposition into restaurants, cinemas and other uses more relevant to the current retail market climate.

Like fellow Class A mall REITs Simon Property Group, Macerich and Taubman Centers, GGP has seen its stock price undertake a slow and steady slide over the last 12 months as investors have increasingly subscribed to the doom-and-gloom narrative surrounding the retail sector. Market conditions have meant that GGP (also like its peers) has found itself consistently trading at a discount to its actual net asset value (NAV); by Nov. 6, the day before news broke of the Brookfield takeover talks, GGP’s share price had fallen to $19.01, down from its 52-week high of $26.63 and well below the company’s consensus NAV of more than $28 per share (analysts who spoke to Commercial Observer for this story pegged GGP’s NAV at anywhere from $26 per share to $35 per share).

Brookfield’s initial bid for GGP, meanwhile, came in at $23 per share, or $14.8 billion in total, and took the form of a 50-50 cash-equity offer comprising $7.4 billion in cash and another $7.4 billion in Brookfield Property Partners (BPY) stock. BPY, a subsidiary of Toronto-based investment giant Brookfield Asset Management, has held a sizable stake in GGP since helping bring the company out of bankruptcy in 2010, and the deal would see it acquire the 66 percent of GGP that it does not already own. (In the third quarter of this year, Brookfield exercised stock warrants to increase its ownership interest in the REIT from 29 percent to 34 percent by purchasing 68 million GGP shares for $462 million.)

“Brookfield’s access to large-scale capital and deep operating expertise across multiple sectors, combined with GGP’s high-quality retail asset base, will allow us to maximize the value of these irreplaceable assets,” Brookfield Property Partners CEO Brian Kingston said in a statement announcing the bid.

Brookfield noted that its takeover offer constituted a 21 percent premium on GGP’s “unaffected closing share price” of $19.01 on Nov. 6, as news of the proposal immediately pushed GGP stock to north of $22 per share the next day and above $24 per share on Nov. 13, when Brookfield officially announced its offer. In the wake of the bid, GGP said it had formed a “special committee” of independent directors—excluding Mathrani and directors affiliated with Brookfield, such as Kingston, BPY Chairman Ric Clark and Brookfield Asset Management CEO Bruce Flatt—to review and consider Brookfield’s proposal and “pursue the course of action that it believes is in the best interests of the company.”

Representatives for both GGP and Brookfield declined to comment for this story.

With the offer coming in well below most analysts’ valuation of GGP, many are split on whether the deal provides good value for GGP shareholders at a challenging time for the retail sector at large, or if it undervalues one of the top publicly traded commercial landlords in the country and could prove a mere starting point in negotiations between the two sides.

“I’m sure everyone would like to get a deal done; the question is, What is the price Brookfield is willing to pay?” said Alexander Goldfarb, a managing director and senior REIT analyst at Sandler O’Neill + Partners, who noted that the initial Brookfield bid “undervalues” GGP below Brookfield’s own internal net asset valuation of the company of around $30 per share.

Goldfarb and other analysts also called into question whether GGP investors would be willing to accept BPY stock as part of any deal. In a note released last month, BTIG equity research analysts James Sullivan and Ami Probandt described BPY’s stock, which has been trading between $21 to $24 per share for most of this year, as “relatively illiquid with very low average trading volume.”

“Our assumption is they’ll have to improve their offer; no one ever throws in their best offer first,” Goldfarb said. “I think Brookfield sees the real story, which is the company being undervalued by the Street.”

Anita Ogbara, a director and credit analyst at Standard & Poor’s, described the Brookfield bid as “opportunistic” at a time when there is “a lot of pressure on valuations” in the mall REIT sector. “We don’t know what the ultimate outcome is going to be, but there’s a clear sign that [Brookfield is] trying to take advantage of the discount versus the true value of [GGP’s] assets.”

While Brookfield’s first crack at a GGP takeover may have been “an underwhelming offer” for many stakeholders, Haendel St. Juste, a managing director and senior equity research analyst at Mizuho Securities USA, said that challenging conditions in the retail space could end up having outsized sway over whether a deal gets done or not. He noted that, speaking to participants at the National Association of Real Estate Investment Trusts’ annual REITworld convention last month, there is a sense that an offer of around $25 per share “would maybe carry the day.”

“People are disappointed [in the $23-per-share offer], but then again I think there’s been a resignation among folks—that maybe it’s not great on its face, but given the current dynamic, maybe it’s as good as you could hope for or expect,” St. Juste said.

Should a deal go through and Brookfield acquire GGP, it is unclear what will become of the company’s leadership and whether the likes of Mathrani will remain in some position or capacity. What appears more certain, according to analysts as well as sources with knowledge of Brookfield’s operations, is that the combined company would look to leverage Brookfield’s exposure in nonretail sectors, such as office and residential, to potentially reposition underperforming properties in the GGP portfolio.

“We are excited about the opportunity to leverage our expertise to grow, transform or reposition GGP’s shopping centers, creating long-term value in a way that would not otherwise be possible,” Kingston said in his statement announcing the bid.

While GGP has already made steps toward pursuing such repositionings—having recently announced a partnership with residential REIT AvalonBay Communities to build apartments at one of GGP’s malls in Seattle—Brookfield would likely seek to further that approach, as it did with select Rouse Properties assets in New Jersey and Vermont in the wake of its $2.8 billion acquisition of the mall landlord last year.

Mizuho’s St. Juste said the integration of a more diverse array of uses at malls and shopping centers is warranted in an environment where “there’s too much retail in the United States” and landlords are seeking new ways to drive traffic.

Sources also said that while Brookfield would almost certainly look to hold long-term onto GGP’s premier retail assets—such as the Ala Moana Center in Honolulu, Glendale Galleria in Glendale, Calif., and Tysons Galleria in Washington, D.C., suburbs—it would probably seek to offload other lower-quality properties either through outright sales or joint-venture partnerships.

It would also remain to be seen what happens to GGP’s high-street retail portfolio, a market in which former Vornado executive Mathrani upped the REIT’s exposure via the acquisition of pricey storefronts along luxury retail strips like Manhattan’s upper Fifth Avenue corridor.

Sandler O’Neill’s Goldfarb noted that GGP’s foray into the luxury street retail space was one of the few areas where Mathrani “got pushback” from investors and observers, given that the REIT entered that market “right at the peak” of New York City property values—via deals like its nearly $1.8 billion acquisition of the Crown Building at 730 Fifth Avenue, which GGP acquired alongside retail magnate Jeff Sutton of Wharton Properties.

“[Mathrani] had done [street retail] at Vornado and he saw an opportunity at GGP,” Goldfarb said. “It was just that the prices he was paying were top of the market.” While GGP has found success with its street retail assets—most notably signing luxury fashion brand Bulgari to a pricey lease to maintain its presence at the Crown Building—depressed Manhattan street retail rents could contribute to a change in approach.

Whatever direction is in store for a new Brookfield-helmed GGP, it is almost certain that a successful takeover would shake up the market as far as publicly traded retail landlords are concerned—and very well signal a time of heightened consolidation as the industry takes on virtually unprecedented headwinds.

“It’s created an M&A tailwind and brought some investors back in the space,” St. Juste said, citing how the likes of Simon, Macerich and Taubman have also seen their share prices run up in the wake of the Brookfield bid. “Next year is going to be tough from an operational perspective; without this M&A buzz, the stocks would be down. They’re not trading on fundamentals right now.”

When interviewing Jeff Blau, the CEO of Related Companies, for this year’s Power 100 we asked a question Commercial Observer had never raised in the past:

Who do you think should be No. 1 on our list?

To revamp the old saw that every time a senator looks in the mirror they see a president, we imagine that every time a developer is asked his or her position in the real estate pecking order the only number they recognize is “one.” (Blau—along with Stephen Ross and Bruce Beal—got the nod himself last year.) However, if they took themselves out of the equation, who should be No. 1?

“You should pick Google,” Blau said. “They’re doing more real estate than anybody. You put Google on, everybody will say, ‘Holy shit!’ ”

Google’s $2.4 billion purchase of Chelsea Market in February was the third-largest single-building office transaction ever in New York City history—and the buy also said something even subtler about the future of the city. As Gotham jockeys to be named the new East Coast headquarters of Amazon with 19 other cities, this was a remarkable vote of confidence in this city. It said something about where the newer, techier, younger workforce wants to be.

The other thing the Google real estate purchase proved was that while many real estate players regularly say that real estate is in a holding pattern, or that we’re in “extra-innings” in an interminably long market cycle, there are players who are taking the initiative and not shying away from big things.

And that was one of the most important characteristics of those who rose in our estimation this year—they didn’t shy away from thinking big.

Brookfield Property Partners’ Ric Clark was No. 8 last year, but the company seemed unusually peckish this year; not only was it wading into multifamily with The Eugene at Manhattan West and Greenpoint Landing with the Park Tower Group in Brooklyn; not only was it leasing millions of square feet of space (like, say, EY taking 600,000 square feet at 1 Manhattan West, or Amazon taking 305,000 square feet at 5 Manhattan West); not only was it making big trades (a $2.21 billion sale of 245 Park Avenue to HNA) but after a first rebuffed attempt it managed to acquire GGP, itself one of the country’s heavyweight REITs.

Some of the heavy hitters didn’t have much room to go any higher. RXR Realty was tapped—along with Vantage Airport Group—to lead the multibillion-dollar expansion of the JetBlue terminal at John F. Kennedy Airport. Normally, this is the kind of deal that could send a developer into the top five. Unfortunately, RXR CEO and Chairman Scott Rechler was No. 4 last year, so there wasn’t a lot of room for improvement. (He’s No. 4 again.)

Silverstein Properties has always had a fairly high ranking in Power 100, but with its winning $1 billion-plus bid for the Upper West Side ABC campus it merited a spot in the top 10.

Every year publicists, landlords and brokers call Commercial Observer and ask two things: Where are they on the list? (We keep that strictly under wraps.) And what’s our methodology?

Our methodology is never going to satisfy everybody. (A “popularity contest” is how one publicist dismissed it when I tried to walk him through it.) How does one compare a landlord with a broker? It’s a difficult question. If the broker disappears from the deal, can he be replaced? Sure. But if a landlord has a great piece of real estate and nobody believes in the project or the neighborhood or the transportation, will it go empty? Sure again. Who’s more powerful? The answer is that it depends. CO’s editorial staff spent many hours wading through these questions, assigning spots on the list and trying to provide answers to questions like, “Is Google—a tech company—really a real estate powerhouse?”

Answer: Absolutely.—Max Gross

Was the International Council of Shopping Centers’ Las Vegas RECon a little more low key than the hard-partying conventions of years past? Maybe. But were deals still getting done? Depends who you ask.

Real estate pros who made the trek this year said the poolside cabana parties at the Wynn Las Vegas and the evening shindigs around the Strip weren’t as crazy as they have been over the past couple years. This year the convention fell on Jewish holiday Shavuot, which meant a handful of observant New York City landlords and brokers—like Jeff Sutton of Wharton Properties and part of the brokerage team from Meridian Capital Group—decided not to fly out to Las Vegas.

But many attendees still felt like the environment, both on and off the convention floor, was productive.

“I think the environment is still positive despite the three factors working against this event—the Jewish holiday, the negative press about retail, and the new regulation that prevent title insurance companies from spending money,” said Eastern Consolidated’s Adelaide Polsinelli, referring to the fact that title insurance companies helped pay for many ICSC parties in the past.

And the event is still on track to attract 37,000 brokers, developers, tenants and vendors, which is about the same attendance numbers as last year, according to an ICSC spokeswoman.

“Sunday by the pool it was the busiest I’ve been in years,” said broker Chris DeCrosta of GoodSpace NYC. “Maybe subdued but in terms of quality of the people who were there—RedSky [Capital], VF Corp., Richmont [Holdings], Robin Zendell [& Associates.] There were a lot of people.”

Some people felt like there might be more people hanging out at the parties than the convention itself.

“There are less people at the show,” said broker Robin Abrams of Eastern. “There are people who took a cabana for the day, and it’s more about relationships than half hour meetings. If you were at a cabana party yesterday and you made a connection, that’s maybe more valuable. It’s about how to use your overall time in Las Vegas for nurturing relationships to make deals.”

Jedd Nero of Avison Young felt like attendance was scant on Tuesday during the last full day of the convention, compared to a relatively energetic final day last year. He blamed it on the struggling retail market.

“Today is exceptionally quiet,” he said. “ I don’t know if people came for a day and left, but people are having fewer meetings here. I think it’s indicative of the times for retail.”

Other dealmakers didn’t notice a slowdown at all.

“It doesn’t seem quiet or quieter than last year,” said Cushman & Wakefield’s Steven Soutendijk. “I think a lot of people expected it to be empty here because it’s a challenging retail environment. But we’re still meeting with tenants.”

Wharton Properties’ Jeff Sutton has purchased SL Green Realty Corp.’s 50 percent stake in 724 Fifth Avenue, giving him full control over a building he had co-owned with the major office landlord, SL Green announced in a press release.

Sutton teamed up with SL Green to purchase the office and retail condominium building in 2012 for $223 million, public records show. The trio of companies acquired the building between West 56th and West 57th Streets from David Frankel Realty as part of an eight-building portfolio that traded for $416 million, according to The Real Deal. The 12-story commercial property at 724 Fifth Avenue was constructed in 1923 and designed by Severance & Van Alen Architects.

In January 2017, SL Green and Sutton scored a $235 million loan to refinance the 55,000-square-foot building, which is anchored by a 20,000-square-foot Prada flagship store.

Sutton also co-owns the adjacent office and retail building at 720 Fifth Avenue with SL Green. The pair purchased the 15-story, 132,000-square-foot property on the corner of West 56th Street for $153 million in 2006, according to city records. Sutton will also pay back SL Green’s initial investment in the building and partially repay another loan, according to the release from SL Green. The city’s largest office landlord will net $85.5 million from the two transactions, per the announcement. 

Sutton didn’t immediately respond to a request for comment, and an SL Green spokesman didn’t respond to further inquiries about the transactions.

With additional reporting provided by Liam La Guerre.

Although Midtown was nearly outshone last year by big leases on the Far West Side and Downtown, SL Green Realty Corp.’s Marc Holliday said that the Midtown leasing market is healthy and that concessions are declining.

“This will end up being quite a good year in the leasing market with concessions that have generally leveled off and rents that are firm and rising a touch,” Holliday said during the company’s second-quarter earnings call today. “In the second half of the year hopefully we can start to push those rents.”

During the second quarter of 2018, the city’s largest office landlord inked 58 Manhattan office leases spanning 565,914 square feet. The average lease term was 8.4 years, average tenant concessions were 3.2 months of free rent, and average asking rents hovered around $67 a square foot.

Holliday noted that New York City’s employment numbers were strong in the second quarter, driving a sense of optimism and demand in the office market across Manhattan, particularly in Midtown.

“Midtown is a big part of the leasing story this year,” said Steven Durels, the company’s director of leasing. “It’s all really focused back to Midtown core. Grand Central, Park Avenue and Sixth Avenue have been the dominant beneficiaries. Grand Central has been 52 percent of the leasing activity [in Midtown] year to date. We’ve seen 2 million square feet of positive absorption in Midtown.” He explained that the firm has noticed, “continued strong demand for high-quality product, but it doesn’t feel like that rental rate has been increasing. To the extent that we see rent appreciation, I think it’s more on the lower end of the price point spectrum.”

SL Green’s recent investment sales highlights have included taking ownership of the leasehold interest at 2 Herald Square, selling its stake in 724 Fifth Avenue to its joint venture partner, Jeff Sutton, and selling the leasehold of an office condominium at 1745 Broadway for $633 million.

The landlord is also looking forward to upgrading the retail on the Ninth Avenue side of Worldwide Plaza, which has a main address of 825 Eighth Avenue, where it purchased a 48.7 percent stake with RXR Realty last fall.

Another piece of news that emerged from the call is that SL Green plans to redevelop the 1.1-million-square-foot One Madison Avenue when Credit Suisse vacates its 190,000-square-foot footprint there in 2020.

Office provider Knotel has inked a lease for its largest Soho location to date after agreeing to take 49,000 square feet at 530-536 Broadway.

Knotel signed on to take the entire second and third floors and part of the fourth floor at the trio of interconnected 11-story office buildings at the northeast corner of Spring Street, the company confirmed to Commercial Observer.

Asking rent in the deal was $75 per square foot and the office provider’s lease term is for 10 years, according to The Real Deal, which first reported the news of the transaction.

The location at 530-536 Broadway, which spans nearly 195,000 square feet in total, will be Knotel’s seventh in Soho. The company—one of the city’s most prolific consumers of office space since raising $25 million in Series A funding at the start of 2017—also signed deals earlier this year for offices at 40 Wooster Street, 521 Broadway and 584-588 Broadway.

“As one of the most active occupiers in New York City, we are pleased to grow our Soho footprint,” Eugene Lee, Knotel’s global head of real estate and business, said in a statement. Aziz Kabbaj and Robert Chattah of Sitt Ventures represented Knotel in the transaction, while the landlord, a partnership between Jeff Sutton’s Wharton Properties and Joseph Sitt’s Thor Equities, was represented in-house by Thor’s Adam Lavinsky.

Representatives for Thor declined to comment.

In April, Knotel announced that it had sealed a $70 million Series B funding round led by Newmark Knight Frank and the Sapir Organization that valued the company at $500 million.

The office provider has more than 1 million square feet of office space under lease across more than 50 locations in New York, San Francisco, London and Berlin, and recently struck a deal to acquire office space listings website 42Floors, tech news publication TechCrunch reported last week.

Tiffany & Co. has announced that it will completely renovate its Fifth Avenue flagship store starting in spring 2019, and will temporarily expand its retail operation into Nike‘s digs next door.

The 181-year-old jeweler giant owns the 10-story, 124,000-square-foot building at 727 Fifth Avenue at East 57th Street that houses the 45,000-square-foot store (on five floors including the mezzanine) and offices. During the three-year renovation, Tiffany will occupy part of Nike’s 75,000-square-foot space at the adjacent 6 East 57th Street via a sublease, as per a release and a company spokesman.

According to The New York Post, Tiffany signed a sublease with SL Green Realty Corp. and Jeff Sutton, as they took over Nike’s lease at the Trump Organization building as part of a deal to relocate Nike to its newly opened flagship at SL Green and Sutton’s retail space at 650 Fifth Avenue. CBRE‘s Andrew Goldberg and Annette Healey represented Tiffany in the sublease, a CBRE spokeswoman confirmed, and SL Green handled the deal in-house. A CBRE spokeswoman said the brokers couldn’t comment as Goldberg was away, and an SL Green spokesman declined to comment.

Tiffany’s spokesman said the company’s renovation news is being driven by the sublease at Niketown becoming public, and he declined to provide further details.

Tiffany’s flagship location, open since 1940, “accounts for as much as 10 percent of the retailer’s annual sales,” as per Bloomberg,  and the renovation will cost “as much as $250 million,” the publication calculated.

“We are extremely excited about the opportunity to transform our iconic New York flagship store and create a dramatic new experience for customers,” Alessandro Bogliolo, the CEO of Tiffany & Co., said in prepared remarks. “Innovation will remain at the forefront of Tiffany’s plans for 727 Fifth Avenue, and the newly reimagined flagship will serve as the modern crown jewel of our global store network.”

Commercial Observer reported last year that Tiffany, which operates more than 300 Tiffany & Co., retail stores worldwide, was beset by issues from its flagship store’s proximity to Trump Tower, to the company CEO stepping down after less than two years to its lack of appeal to millennials to the uptick in online shopping.

Updated: This story has been edited to include sublease details at 6 East 57th Street.

Cain International has joined a billion-dollar refinancing of Fifth Avenue’s Crown Building with a $284.5 million contribution, documents filed in city property records show.

Shortly after Jeff Sutton‘s Wharton Properties and GGP spent $1.78 billion to buy the retail-and-office tower in 2015, they flipped the building’s upper office floors to developers Michael Shvo and Vladislav Doronin‘s OKO Group. They partnered to buy the non-retail portion of the office building for $500 million, with plans to convert the space into a hotel and residential condominiums.

(Brookfield Property Partners bought GGP last summer, renaming it Brookfield Properties Retail Group. Shvo, for his part, is no longer involved.)

That year, Deutsche Bank funded the deal on the central Midtown tower with a billion-dollar mortgage, which the new financing splits in two. One piece, a $720 million lien on the building’s retail portion, remains on Sutton’s and Brookfield’s books, while another $240 million chunk was picked up in a new financing arrangement between Cain, a London-based lender, and OKO.

Cain is also adding a $44.5 million gap mortgage, which brings the sum of the debt under the new deal to just more than $1 billion.

The Real Deal first reported news of the financing last month.

Built in 1921, the Crown Building, between West 56th and West 57th Streets, stares down Trump Tower across Fifth Avenue. Known as the Heckscher Building at the time of its construction, the 26-story landmark was surreptitiously acquired by dictatorial president of the Philippines, Ferdinand Marcos, in 1981. After his regime fell in the mid-1980s, Bernard Spitzer bought the tower for $95 million in 1991, before selling it to Sutton and GGP four years ago.

While the transformation of the building’s upper floors continues to unfold, its retail tenants include some of Fifth Avenue’s most illustrious peddlers, including Prada, Bulgari and Japanese jeweler Mikimoto. Up above, Singaporean resort company Aman will manage the lodging and residential portions, which it says will be ready sometime next year. The hotel will have 83 rooms and suites along with a three-story spa, a jazz bar and two restaurants. Higher yet, 20 apartments will include a five-story penthouse suite.

Representatives from Cain, Deutsche Bank and from each of the ownership partners—contacted individually—did not immediately respond to inquiries.

As Marc Holliday began explaining all SL Green Realty Corp. had done in the last year, he paused.

“I don’t know where to begin.”

SL Green had a banner year. It announced plans for One Madison Avenue, it took over the leasehold for 2 Herald Square,it churned out leases at One Vanderbilt and it even dipped into affordable housing.

It would be criminal if the firm landed anything short of No. 1.

But how would we live with ourselves if we didn’t give Related Companies the No. 1 spot on the year when Hudson Yards had its big debut? The naysayers were drowned out by the crowds who liked the enormous copper beehive (or whatever the kids call it). They love the shopping, the dining—even the Shed, notwithstanding the snide comparisons to airplane hangars.

Related wasn’t our No. 1 choice, either.

Last year, Brookfield Property Partners—which has been gobbling up properties and companies like it has a tapeworm—seized the title as New York City’s biggest commercial landlord. Brookfield will soon beat out Blackstone in assets under management globally, thanks to buying Oaktree Capital Management. We didn’t even mention the millions of square feet it unveiled at Manhattan West. We felt that was worth a lot.

Last year was, in essence, an embarrassment of riches for the real estate industry. These are the top players.—Max Gross

The 2019 Power 100 Issue:

Welcome to the List
The Bezos Factor: Who Fell a Few Rungs Thanks to Amazon
Biggest Jumps
Power Landlords: The Guys Who’ve Got the Biggest Portfolios in New York
Power Designers: The Most Powerful Eyes in the Business

What were the real estate deals that defined the last 10 years?

Despite the fact that the decade began midway through the worst economic shock since the Great Depression, developers and owners were not shy in the 2010s. If anything, they grew gutsier. 

The most expensive residential real estate in the history of the country was unveiled — and it found buyers. (Until it didn’t.) The largest housing complex in the city changed hands, despite having been one of real estate’s great debacles only a decade earlier. (Nobody blinked.) A city-within-a-city broke ground. (They finished phase one this year.) Developers looked at the few remaining empty parcels of the city and drank with abandon their deepest Robert Moses-inspired fantasies. 

It was difficult to settle on which 10 projects best defined the past 10 years; there were contenders that Commercial Observer could easily have listed. Everything from St. John’s Terminal nabbing Google to Brookfield’s Bankside project in the Bronx to the sale of the iconic Chrysler Building begged a mention. It’s almost inconceivable that those deals didn’t make our list — but what can we tell you? It was a very busy decade.

With reporting by Cathy Cunningham.

A French economic development agency for the southern region Occitanie, Sud de France Dèveloppement, will relocate its New York City offices blocks away within Midtown to 250 West 54th Street, Commercial Observer has learned.

Eight years ago, as Superstorm Sandy ravaged the East Coast, those in real estate noted that a crane at one of the most coveted buildings in the city — One57 — was flapping precariously over Billionaires’ Row.

Jeff Sutton’s Wharton Properties wants to turn its two-story retail building at 25 West 34th Street into a 363-room hotel, during a time when the coronavirus pandemic has tanked the hospitality and retail industries, property records show.

Wharton filed a permit on April 29 to build a 26-story, 176,375-square-foot hotel at 25 West 34th between Fifth Avenue and Avenue of the Americas, PincusCo Media first reported. The spot will also have retail on the ground floor and amenity space on the roof, according to the permits.

April is, for Commercial Observer staffers, the cruelest month, breeding lists, lists and more lists.

The month normally kicks off with our rating and ranking of the 50 most powerful people in finance, and ends with our list of the 100 most important people in commercial real estate overall — and this means hundreds of calls and emails, and cranky bankers and developers cursing us out for lowering them in our rankings.

Lloyd Goldman’s BLDG Management picked up a Bath Beach, Brooklyn, retail building for $17.25 million, brokers on the deal announced.

BLDG bought the 7,806-square-foot retail property at 2076-2084 86th Street from Jeff Sutton’s Wharton Properties, Crain’s New York Business first reported.