The seller, Scottsdale, Ariz.-based Alliance Residential Company, purchased the complex, dubbed Veda, in 2016 for $81 million, per property records. 

To fund the purchase, Abacus secured a $43.4 million acquisition loan from JLL Real Estate Capital, that matures in 2029, per TRD. 

Neither Abacus, Alliance nor JLL immediately responded to requests for comment. 

Veda joins several other multifamily properties that Abacus owns in Southern California, according to its website, including the 412-unit Country Hills in Corona and the 138-unit Atrium at West Covina.

Alliance, for its part, is one of the largest rental residential developers in the country, building or acquiring, it says, more than 115,000 units, totalling more than $23 billion, since its founding in 2000. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.

Named after the flexible-looking art installation found floating above the restaurant in the building’s open-air atrium, Elastika debuts this weekend with modern American food curated by Executive Chef Joe Anthony, who was previously culinary director of the two-Michelin-starred restaurant Gabriel Kreuther in New York City. 

“We’ve transformed the first floor of The Moore into the lobby of the Miami Design District — an inviting destination where people can gather, dine and enjoy the landmark building and Zaha Hadid’s iconic sculpture,” WoodHouse founder and CEO Brady Wood said in a statement. 

It’s unclear how much space Elastika has at The Moore, as is the total cost of the building’s renovations. A spokesperson for Woodhouse did not immediately respond to a request for further comment. 

There’s something in the air attracting high-end restaurants to Miami these days. The Hwood Group is in the early stages of acquiring a 7,500-square-foot space in Miami Beach to open a nearly 360-seat Nice Guy restaurant, while restaurateur Myles Chefetz recently closed his popular Prime Fish restaurant, also in Miami Beach, to make way for Mediterranean-style joint Motek. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.

Median asking rents for one-bedroom apartments were down in April in all seven Florida cities tracked by listings site Zumper, compared to last year. Nationally, rents remained relatively flat, with one-bedroom rents declining by 0.6 percent since last April to $1,486, according to Zumper. 

In South Florida, one-bedroom apartment rents fell 3.5 percent in Miami, coming in at an average of $2,740 per month; and dropped 4.1 percent in Fort Lauderdale to an even $2,000. On the Gulf Coast, Tampa and St. Petersburg saw 1.2 and 3.1 percent declines, respectively, year-over-year. 

Tallahassee posted a double-digit decline, with rents falling close to 11 percent since April of last year, and 2 percent since March. Orlando and Jacksonville saw declines within 3 to 5 percent. 

Of course, these declines follow years of rapid rent growth in all these markets, and Miami remains the fifth most expensive rental market in the country. Outside of South Florida, however, even the elevated asking rents remain below the national median.

A similar story played out in North Carolina, where monthly apartment rents fell in all six cities tracked by Zumper. In fact, the only city in the country with rents dropping faster than Tallahassee was Winston-Salem, where rents fell by 12.6 percent, followed closely by a 10.6 percent decrease in Raleigh.

On the other end of the spectrum, rents in New York City, Boston and Chicago were up, the former by close to 20 percent. And it wasn’t only the big cities: The sharpest growth in the country was in Syracuse, N.Y., with a 27 percent increase, and Columbus, Ohio, with 22 percent.

Washington, D.C., was the outlier when it came to the much-maligned major U.S. cities. One-bedroom rents fell 1.7 percent, though, in nearby Arlington, Va., rents were up a relatively modest 3.1 percent year-over-year. 

Notably, most of the Florida cities mentioned saw rent increase from the previous month despite the annual declines, but that can largely be explained seasonally, as spring is generally considered leasing season. 

Chava Gourarie can be reached at cgourarie@commercialobserver.com.

The 14,200-square-foot properties at 686 and 692 North Robertson Boulevard were on the market for about four months. Schukraft, a longtime patron of The Abbey, will keep the restaurant and nightclub open. 

Schukraft also acquired Cooley’s business, but the price of that trade has not been disclosed.

Matthew Luchs and Brandon Michaels at Marcus & Millichap (MMI) handled the transactions.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com. 

Longtime partners Ornstein and Powers departed Transwestern in 2021 to set up their own shop, and the duo have carved out a niche arranging deals for nonprofits in New York City. Open Impact recently brokered deals for a charter school in Queens, the nonprofit food pantry West Side Campaign Against Hunger and a Latter-day Saints congregation that rented space from another church on the Upper West Side.

The brokerage initially maintained ties with Transwestern, but that will end now that it has switched its allegiance to JLL, according to spokespeople for JLL and Transwestern. 

“Earlier this year, Transwestern made the decision to end its affiliation agreement with Open Impact Real Estate and we wish their team well,” Transwestern’s east region head, Bruce Ford, said in a statement. 

Open Impact has already rebranded its website to announce its “national affiliation” with JLL.

Now, the relationship between the woman-owned start-up and a much bigger fish could be quite symbiotic since Open Impact’s WBE status opens the door for JLL to bid on contracts with city agencies, hospital groups, higher education and other clients looking to do business with companies owned by women and minorities to meet legal or voluntary benchmarks.

“This should be a beneficial arrangement for everybody,” Ornstein said. “It gives both of our firms the opportunity to partner on large corporate transactions where being intentional about hiring choices matters and the diverse partners they bring in is a priority.” 

Open Impact will team with JLL’s nonprofit practice, headed by David Carlos, to source deals, and the partnership will be a “true differentiator” for JLL, Peter Riguardi, JLL’s New York chair, said in a statement.

“We not only enhance our service offerings but also reaffirm our commitment to nurturing inclusive growth and empowering women in leadership positions within the commercial real estate industry,” Riguardi said in the statement.

Ornstein brings a bit of marketing prowess to Open Impact thanks to her early career experience in the marketing division of real estate advisory firm The Staubach Company. But she decided to pivot to real estate two decades ago, and hasn’t looked back, she said.

“I had the realization that if I can do marketing with something else that I really love and am passionate about, that would be the right path for me,” Ornstein said. “And that thing I loved was real estate. I’ve always been interested in architecture and design, creating community and having an impact on our city.” 

Powers, for his part, is one of New York’s foremost experts on nonprofit commercial real estate deals, having devoted 20 years to nonprofit clients looking to grow in the five boroughs. Often, that means helping them take advantage of tax breaks the state makes available to nonprofit firms.

Open Impact says it has completed more than 20 million square feet of deals focusing on nonprofits and other mission-driven clients since it was founded.

Abigail Nehring can be reached at anehring@commercialobserver.com.

Kobalt originally signed on to move its headquarters to 23,000 square feet on the entire sixth floor of the William Kaufman Organization’s 2 Gansevoort in 2017, but decided to give it all up and subleased it to music streaming service SoundCloud last year, as CO previously reported.

However, Kobalt — which has offices in London and Los Angeles — wanted to retain some presence in the building, so signed a fresh deal for the smaller digs, the source said.

The tech-based music publisher Kobalt founded in 2000 and works with artists including Phoebe Bridgers, The Lumineers, Paul McCartney and Stevie Nicks. It recently got some additional financing to up its funding power to an off-the-charts $1 billion, according to a press release from the company.

Savills’ Scott Bogetti and Kirill Azovtsev brokered the pitch-perfect deal for Kobalt while Micheal Lenchner of William Kaufman’s leasing and management division Sage Realty remixed it in-house for the landlord. 

Lenchner did not immediately respond to a request for comment while the Savills brokers declined to comment.

Other tenants in the 210,000-square-foot building include fashion house Theory Holdings, life sciences company Fortress Biotech and health care firm Rightway.

Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.

“Trophy buildings such as 1812 North Moore offering top-tier amenities and unbeatable access within the region remain at a premium given the limited supply in our market,” Tim Helmig, managing partner at Monday Properties, said in a statement. “As a result, we are seeing extraordinary leasing momentum and continuing to attract top-tier tenants.” 

Graham Holdings was represented by Scott Panzer, Jay Farmer and Steve Burman of JLL (JLL) in the lease negotiations. Monday Properties was represented by John Wharton of Monday Properties and Yorke Allen, Robert Veshancey, Herb Mansinne and Lee Brinkman of JLL. Asking rent in the deal was unclear.

The company joins a number of other tenants at the tower, which is the largest in Rosslyn, such as Nestle USA, Oracle, Evolent Health, Rockefeller Capital Management and Rocade Capital. 

Formerly known as The Washington Post Company from its formation in 1947 until the company’s sale of the paper to Jeff Bezos in 2013, Graham Holdings owns companies such as local TV stations, Clyde’s Restaurant Group, education brand Kaplan, and framing company Framebridge. It also hasn’t completely gotten out of the news game and still owns City Cast, Foreign Policy and Slate.

A spokesperson for Graham Holdings declined to comment.

Monday Properties has been busy with 1812 North Moore in recent days. Last week, the firm announced that it had secured $173 million to refinance the tower, along with $32 million to refinance Shirlington Gateway, a 206,000-square-foot medical office building it owns in Alexandria, Va. Citi Real Estate Funding provided both the loans. 

Average office asking rents in Northern Virginia dropped slightly in the first quarter of this year to $35.32, bucking a trend of continual growth quarter-over-quarter since 2016, according to an office market report from Newmark. Yet rents are still 0.6 percent higher than they were in the first quarter of 2023, per the report. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.

Neither Brookfield nor Consus immediately returned requests for comment or information.

The sale price was about half the remaining outstanding debt that’s tied to the 52-story tower at 777 South Figueroa Street, which is the seventh-tallest building in L.A.

777 Tower was once part of an expansive Downtown L.A. office portfolio — which included the Gas Company Tower and EY Plaza — that has experienced a stark fall from grace since the pandemic and the rise in work from home trends. The building was also one of Brookfield’s buildings that went into default in early 2023.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.

Some of those programs include increased funding for more New York Police Department classes this year — with 2,400 new officers expected by the end of 2024 — and wiping out billions of dollars in medical debt for qualifying low-income New Yorkers. Meanwhile, conservative fiscal management of city programs and better-than-expected revenues were also touted by Adams as stabilizing the city’s budget in the wake of the COVID-19 pandemic. He also says they allow the city to avoid tax increases, layoffs or major service cuts previously proposed.

“The fiscal year 2025 budget reflects this can-do spirit, reflects our core values and what we can accomplish with strong fiscal management and committed leadership,” Adams said. 

The budget also increases city spending from the $109.4 billion one Adams initially proposed in January.

Yet, New York’s ongoing migrant crisis is still top of mind, with the city caring for nearly 200,000 asylum seekers since spring 2022, and still caring for more than 65,000 at the moment. 

Adams said that the cost of asylum seekers to the city will rise to almost $10 billion over fiscal years 2023 to 2025. While he acknowledged the $3.1 billion in direct commitments from New York State’s recently passed budget to assist with the crisis, Adams called on the federal government to contribute far more than the roughly $200 million it has allocated so far. In the meantime, Adams has opted to cut asylum seeker spending by 30 percent, or nearly $600 million, over fiscal years 2024 and 2025. That’s in addition to the $1.7 billion in migrant funding previously cut in the preliminary FY 2025 budget. 

In terms of housing, Adams announced $615 million in funding toward combating family homelessness as well as eviction prevention programs over the next fiscal year to help keep low income residents housed. Adams also touted the financing of nearly 28,000 new affordable units over the calendar year, the most in the city’s history, as well as proposed state funding  toward the goal of building 500,000 affordable homes by 2033. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.

We assumed malls would have the longest specially serviced tenure and also have the most value deterioration, but this was only partially true. While malls had larger valuation declines from issuance than other retail properties, the more recent appraisal trends were slightly more positive for malls. Also, distressed malls were, on average, not specially serviced longer than other retail types (although this may be due to the many COVID-related modifications and extensions).

Sarah Helwig. Photo: Matt Kosterman

We found the largest retail loan in our data set, White Marsh Mall northeast of Baltimore, to embody some of the retail appraisal trends. The regional mall loan is older, securitized in 2013, before the height of the “retail apocalypse.” The property was originally valued at $300 million in 2013, but was revalued at just $124 million in June 2021, after its transfer to special servicing at the height of the pandemic. The property’s cash flow has continued to trend downward as have the subsequent appraisal valuations. The property was appraised at $113 million in March 2022, $100 million in January 2023, and most recently at $95 million in August 2023.

Not all retail property valuations continue to trend downward, however. Another regional mall, Westfield Countryside in Clearwater, Fla., has reported increased valuations since its initial transfer in June 2020. Most recently, the mall was valued at $116 million in October 2023, up 7 percent from the previous appraisal (however, still 57 percent below the issuance appraisal).

Hotel: Hotels are notable in how many have lingered in special servicing since the start of the pandemic, with the majority transferring in 2020. This is especially surprising given the positive performance of many hotels, with 2022 and 2023 cash flows sometimes doubling issuance expectations as conferences and large events resume and work-from-home policies increase hotel nights booked. Still, most specially serviced hotels have received improved appraisal valuations, and only a handful have transferred since 2022.

Reflective of the valuation improvements we’re seeing is the Palmer House Hilton, which transferred to special servicing in April 2020. The first post-transfer appraisal valued the Chicago hotel at just $305.5 million, a 45 percent drop from the initial appraisal two years prior. But each subsequent appraisal has valued the hotel above the last, with the last valuation at $357.1 million in September 2023, above the securitized debt balance.

Office: Office transfers to special servicing have mostly been a post-pandemic occurrence, and, more than any other property type, valuations continue to decline at a steep rate. Many of the offices we’re seeing transfer are older, Class B and C assets that aren’t well positioned to adjust to changing tenant needs.

The Civic Opera Building in the Chicago Loop provides a good example of what is playing out in downtown office space. The loan transferred to special servicing in June 2020 and has steadily lost tenants over the last few years. Originally appraised at $220 million in 2015, the property was reappraised at $165 million in February 2021 and $159.4 million in September 2022.

Echoing a worsening market sentiment, the most recent appraisal in December 2023 came back at just $119.8 million, a 25 percent haircut from the prior year’s valuation and 46 percent below issuance.

The leveling-off of retail (especially regional mall) and hotel valuations is reflective of the glut of loans in these sectors that have been in special servicing since the pandemic and have achieved some level of stability (albeit at levels well below underwritten levels). Distressed office, with very few loans being resolved, has not yet found a floor. This, combined with what we assume will be a steady flow of office loans to special servicing, leads us to believe there is still room for further value deterioration in the sector.

Sarah Helwig is a vice president at Morningstar Credit Analytics.

The leaders of the state senate and assembly were by her side this time, and Mayor Eric Adams was there too, beaming at Hochul as no mayor has beamed at a New York governor in recent memory.

The deal contains a lot of carrots and almost none of the sticks Hochul had on her housing agenda 18 months ago. 

It will incentivize mixed-income housing construction and office-to-residential conversions through new tax abatements for developers, and it also rolls back a component of the state’s landmark 2019 tenant protection act that rent-stabilized landlords say has become a thorn in their side while also adding new rules to tamp down the city’s sky-high rents in unregulated buildings. 

Even with the jubilant feeling of Hochul’s Tuesday victory lap, both sides of the real estate coin weren’t exactly popping champagne over the housing plan. Advocates think that the provision to help save tenants from eviction notices was a “sham” while developers feel her long-awaited replacement for the 421a tax abatement doesn’t make deals pencil out to spur more affordable housing.

“It’s hard with the labor numbers where they are,” Scott Rechler, CEO of developer RXR, said about the newly created 485x tax break. “And in some of our projects that are in the areas where 60 percent [area median income] is the affordability you need to meet, that may make it too difficult to make the numbers work.”

The Real Estate Board of New York estimates the wage provisions baked into 485x will increase construction labor costs by about 20 percent on average, though the effects will vary by building size and location, among other factors. Plus, income-restricted units will need to meet a deeper level of affordability to qualify, and that means less revenue over the long term.

“It’s sort of death by 1,000 cuts,” a spokesperson for REBNY, who did not want to be named, said. “Not any one single piece is going to be the reason why a developer decides to build or not. It’s everything all together.”

Still, developers did have some things to celebrate in the housing plan.

The quickest effects will be felt by developers whose projects have stalled since the state’s 421a tax abatement expired in 2022, according to Daniel Bernstein, a real estate lawyer with Rosenberg & Estis. Many will take a shot at reviving those plans thanks to the seven-year extension of a modified version of the old 421a state lawmakers added into the plan.

The extension could revive up to 72 projects in New York City, comprising 33,000 housing units, that fell into jeopardy after the tax abatement expired, according to a survey by REBNY in December 2022.

Bernstein estimated the figure is likely even higher since some of his clients had large developments underway when 421a expired, though they never reported their intention to apply for it before. 

“That’ll take a little time to ramp up, but in the last 24 hours I’ve already had many conversations with people who could use the extension to easily produce thousands of units if they can get financing and resume construction,” Bernstein said.

Aside from the 421a extension, Rechler said he was excited for RXR to take advantage of the state’s new office-to-residential tax abatement. It will quicken the pace of these projects, he said, and has him reevaluating the number of apartments RXR is considering for a planned conversion of a Manhattan office building.

“The conversion piece hit right in terms of enabling people to do it and do it quickly,” Rechler said. “It gave an incentive to get it done before 2026, so people are moving at a faster pace right now.”

Rechler wasn’t alone with praise for the abatement, with SL Green Realty CEO Marc Holliday approximating in an earnings call it would enable the conversion of between 25 million to 40 million square feet of office to housing.

Meanwhile, rent-stabilized landlords are rolling up their sleeves to look at the new “Individual Apartment Improvement” caps, which permit bigger rent increases for capital improvements in rent-stabilized buildings than the state’s 2019 tenant protection law allowed.

Rafael Cestero, the CEO of the nonprofit affordable housing lender, Community Preservation Corporation (CPC), became a major stakeholder in the city’s rent-stabilized housing stock through CPC’s acquisition, with Related Fund Management and Neighborhood Restore HDFC, of Signature Bank’s $5.8 billion rent-stabilized loan portfolio last year.

While something is better than nothing, Cestero thought the caps could’ve been more generous.

“The individual apartment improvements cap that was put in the 2019 bill was not enough,” Cestero said. “What rent-stabilized property owners are struggling with is essentially stagnant revenues in the face of ever-rising expenses. This is not going to solve all the problems, but I think it’s progress, and progress is really important.”

That’s good since it’ll be at least five years before any prospective 485x projects get underway, according to REBNY. But that gives New Yorkers a long time to wait for new units, with the lack of affordable housing “a real issue,” said Manny Pastriech, the president of 32BJ. 

A state labor coalition, including 32BJ, fought until the 11th hour to get prevailing wage requirements baked into the state’s new housing tax abatement program, and the temporary breakdown in talks with REBNY helped delay the budget’s passing by three weeks. Pastriech said the union also supported “Good Cause” tenant protections, which would stop the flow of working-class New Yorkers to New Jersey and beyond.

“More and more people can’t afford to live in the city,” Pastreich said. “Our contract covers wages, benefits, working conditions, rights on the job [and] retirement. But the number one issue that’s not covered in the four corners of our contract is housing, no question.”

In the end lawmakers found common ground on a very watered-down version of “Good Cause,” which protects tenants from capricious rent increases and guarantees lease renewals. Except anyone who lives in a newly constructed building or a luxury building or a building with fewer than 10 units or a building owned by “mom and pop” landlords is out of luck — the law doesn’t apply.

For that, lawmakers from Albany are not getting showered in accolades from tenant advocates, who don’t think it goes nearly far enough.

“Governor Hochul did not solve the housing crisis — instead she pushed through a housing deal written by the real estate industry to ensure they keep getting richer off the backs of hardworking tenants,” Housing Justice for All’s Cea Weaver said in a statement last weekend. “Now, millions of renters across the state will struggle to keep a roof over their heads as rents and evictions continue to rise.” 

Cestero, who was also former Mayor Michael Bloomberg’s pick to head the Department of Housing Preservation and Development, has a long view of the path ahead to solve the city and state’s housing crisis. 

He said the fact that there was at least some movement on housing, with Hochul trying to get a replacement for 421a on the book since it lapsed in 2022, was positive. And the fact that not everybody was thrilled showed the deal was a compromise for both sides.

“Our country was built on compromise. We don’t do it a lot these days, but this deal is the ultimate compromise,” Cestero said. “I think there is absolutely no question that this is essential to more housing production in New York, and any debate otherwise is refuted by the fact that nothing has been built in the last couple of years since 421a went away.”

—With additional reporting by Nicholas Rizzi

Abigail Nehring can be reached at anehring@commercialobserver.com.

One property currently includes 10,500 square feet of retail at 700 Santa Monica Boulevard in Santa Monica, and it’s slated for 99 new units. A second property includes 27,000 square feet of retail at 1200 Vine Street in Hollywood, and will be redeveloped into 151 units. The third site is a 30,900-square-foot land parcel at 5240 Lankershim Boulevard in North Hollywood in the San Fernando Valley, which will become 128 apartments.

“The debt solution we structured provides flexibility to support Grubb’s business plan that will bring hundreds of much-needed new apartments to the supply-constrained Los Angeles market,” Bolour CEO Mark Bolour said in a statement.

Grubb Properties says it has approximately $2.5 billion in multifamily, office, retail and life sciences assets under management.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.