More than just PopUp Bagels, it was a good week for food — and maybe retail in general.

On the wider retail front, part of New York’s state budget that was laid out last week included $40 million to help combat organized retail theft, which has reached epidemic proportions. Plus, the legislation will raise assaulting retailers from a misdemeanor to a felony.

“This is not one person running and grabbing a candy bar. We know that these are transnational criminal organizations that are using the Internet [as a] marketplace,” said Gov. Kathy Hochul announcing the push. “We’re also making it illegal to foster the sale of stolen goods. … We’re going to make sure that prosecutors can charge third-party sellers who are profiting off the misery of our stores.”

Oh, and on Friday we learned that the Atlanta-based retailer Floor & Decor is taking 129,000 square feet at 850 Third Avenue in Sunset Park, Brooklyn, space vacated by Bed Bath & Beyond. (Yes, you read correctly: 129,000 square feet!) If that isn’t a good retail deal, we give up!

But there were other sweet deals that were announced last week that we had longed for in the days of matzo and charoset.

I’m Donut?, the famed Japanese doughnut purveyor, announced its first overseas lease at Bow Tie Properties’ 154 West 45th Street in Times Square.

Van Leeuwen, the ice cream maven, scooped up its second lease in Greenpoint, Brooklyn.

City Winery took an additional 14,600 square feet at Pier 57 to apparently open three new dining options.

And JKS Restaurants — Jyotin, Karam and Sunaina Sethi’s British-based restaurant group behind names like Gymkhana and Kitchen Table — is opening a 7,900-square-foot eatery at 1245 Broadway. (Their first in New York. No word yet on the details of the restaurant.)

The retail deals were not only in New York either: Clay Conley, Sam Slattery and Oliver Quinn’s James Beard-nominated restaurant Buccan is opening a new 10,000- square-foot outpost in Palm Beach.

Of course, this is not to say that everything’s perfect with retail.

There’s a struggle over the future of the Houston-based shopping mall company Whitestone REIT. Bruce Schanzer of Erez Asset Management is currently making a push to get on the board and steer the REIT (whose stock is virtually unchanged from what it was back in 2010) in a different direction.

And, after an extremely decent 2023, there was some grim reporting on Los Angeles-based Macerich, which netted $127 million in losses last quarter and defaulted on a $300 million loan tied to its outdoor shopping center Santa Monica Place.

Back to New York

Now that the dust has settled a bit on New York’s $237 billion budget deal, it’s beginning to look like … a pretty good deal for developers!

New York City was pushing for zoning changes to make office-to-residential conversion easier, a denser allowance for units on residential lots, and incentives to restart stalled projects — which the city seemed to have received.

“It’s definitely worth celebrating, but now it’s really time to roll up our sleeves and create a modern zoning envelope that will allow for the creation of more housing in the city,” said Adolfo Carrion Jr., commissioner of the city Department of Housing Preservation and  Development. “We’re happy with what we came home with, knowing that permits for construction were way down and the housing vacancy rate is the lowest it’s been since we started tracking in the 1960s.”

Moreover, we were buoyed to learn that Miki Naftali has already thrown down with five 22-story residential towers he’s planning along the Williamsburg waterfront.

Yes, yes … he was certainly planning this well before the state budget deal. Still, good news is good news. It’s almost enough to make us forget about the fact that the Fed signaled that it wasn’t going to be pushed into lowering interest rates anytime soon.

‘I shot J.R.!’

In the middle of last month, Commercial Observer dropped by Santander Tower in the Lone Star State to host our first investment forum in Dallas.

A terrific collection of panelists and attendees included Sondra Wenger of CBRE, Tony Fineman of Acore, Jay Porterfield of PGIM Real Estate and many others who discussed the state of the market — and Dallas specifically.

“Occupancy rates remain 1 percent below the long-term average,” said Mark Roberts of Crow Holdings Capital. “That’s a big deal. … Dallas, I think it will continue to be a magnet for investor capital.”

Indeed, it is a ripe time to take a good, long look at Texas given that some 200 companies have relocated there in the last decade, and this got us looking at the Dallas office market, which is a lot healthier than other major metropolitan areas.

“Dallas is a headquarters town, maybe more so than even a place like Austin,” according to the University of Texas at Austin’s Steven Pedigo. “Its core business functions kind of depend on corporate real estate. These large brands, Fortune 500 companies, have a corporate identity. And with that comes the need for a lot of space.”

That has meant big offices for the likes of Frito-Lay, PepsiCo, Pizza Hut, Bank of America, Goldman Sachs and many, many others.

Dallas is even going after what had traditionally been Austin’s territory in the state: proptech.

In the last four years, some 17 proptech companies have put down stakes in Dallas. “Since then, $2.3 billion has been invested in equity rounds in proptech companies, with $450 million invested in Dallas-Fort Worth-based proptech companies, and $860 million invested in Austin-based proptech companies,” according to Ashkán Zandieh of the Center for Real Estate Technology and Innovation.

And, while there have been some oversupply issues in Dallas’ multifamily market, it is actually poised for a turnaround.

“We saw a surge in demand coming out of 2021, and a dramatic pullback in 2022,” said Bill Kitchens of CoStar (CSGP). “In the time since, we’ve been looking for demand to come back in a meaningful way. In the first quarter, we’re beginning to see the first signs of that demand coming back into Dallas-Fort Worth.”

Some 4,700 renters signed leases in Dallas in the first quarter of 2024 (according to CoStar) and while occupancy ticked up, this is largely because a massive amount of new supply came onto the market.

“Four million people came to Texas in the last 10 years, 3 million came to Florida and a million came to Georgia,” said Trammell Crow’s Adam Saphier, who just took over its Texas office on May 1 and spoke to CO for our Sit-Down. “Said another way, 22 percent of the nation’s population growth was in Texas.

“That momentum appears to be growing, which leads us to be very bullish that there will be continued job and population growth in all of Dallas, Houston and Austin going forward.”

Definitely something to chew on during this day of rest.

See you next week!

The largest sale recorded during the first quarter was Lonza Group’s $1.2 billion acquisition of a biotechnology manufacturing facility in California’s Bay Area.

Although biotech and biomanufacturing are expected to continue to draw demand to the region, the deal closed for an astounding $2,810 per square foot, and CommercialEdge said it significantly skewed the first-quarter results. The Bay Area was the only market that saw more than $1 billion in assets trade hands, the one trade accounted for 12 percent of all national volume in the first quarter, and it alone bumped up the national average price by $17 per square foot.

The Bay Area recorded more than $1.68 billion in industrial sales in the first quarter at $777 per square foot. 

Other notable market investment sales: 

Los Angeles County: $545 million at $325 per square foot 
New Jersey: $510 million in sales at $306 per square foot
Inland Empire: $382 million at $212 per square foot
Baltimore: $71 million at $122 per square foot
Orange County: $57 million at $326 per square foot

Average U.S. warehouse rents continued trending upward, with in-place rents averaging $7.85 per square foot in March, which is 7.3 percent higher than one year prior. Miami posted the highest rent growth in the country, up 11.9 percent in the 12-month period, slightly but notably outpacing Southern California markets. Miami also logged the fourth-highest in-place rents in the U.S. at $11.28 per square foot per month.

The Inland Empire saw 11.8 percent rent growth in the same period, Los Angeles saw 11.2 percent growth, and Orange County saw 10.8 percent. The Western U.S. markets also remained the priciest in the country for industrial tenants.

After more than 1 billion square feet was added to the market between 2022 and 2023 alone, the historic levels of new supply continued to push the U.S. vacancy rate up to 5.2 percent at the end of March, up another 20 basis points from February, according to CommericalEdge. In the past year, industrial vacancy rates in the Inland Empire surged from 1.7 percent to 6 percent, following a period of rapid expansion, with over 90 million square feet of new space added since 2020.

“The e-commerce boom that fueled so much of the demand for space has cooled of late,” the report read. “Tenants have been much more hesitant to sign leases in the face of economic uncertainties driven by high inflation and interest rate increases. Occupiers are more focused on controlling costs now than they were in previous years, which has slowed the leasing velocity that pushed vacancies to record lows coming out of the pandemic.”

After the first quarter, the amount of construction underway fell roughly 33 percent compared to a year ago, which CommercialEdge described as a response to normalized demand and the high cost of capital.

“There absolutely has been a rebalancing in our industrial deliveries forecast to account for the slowdown in starts we had in 2023 and into 2024,” Peter Kolaczynski, director at CommercialEdge, said in a statement. “However, we anticipate a rebound in deliveries in the back third of the decade.”

The Inland Empire has seen the construction slowdown the most, as its pipeline plummeted by about 66 percent in 12 months, going from 27.2 million square feet underway last year to 9.2 million square feet this year.

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

Mother Wolf made a fast name for itself on the West Coast since opening in 2022, becoming a favorite of Justin Bierber, Kim Kardashian and Mark Wahlberg. The concept, the brainchild of James Beard-nominated chef Evan Funke and Ten Five Hospitality, serves up classic Roman pasta dishes such as cacio e pepe and rigatoni all’amatriciana, as well as fried squash blossoms and artichokes. 

Representatives for Miami Design District and Ten Five Hospitality did not immediately respond to a request for comment.

The Miami restaurant will mark Mother Wolf’s third location. Earlier this year, an outpost opened at Jeff Soffer’s The Fontainebleau casino in Las Vegas. 

Funke isn’t the only L.A. restaurateur looking to expand in Miami. The H.wood Group recently filed plans to open The Nice Guy eatery on Lincoln Road in Miami Beach. It would be the group’s second Miami location since opening the Delilah lounge in Brickell last year. 

Julia Echikson can be reached at jechikson@commercialobserver.com. 

Located on the cross streets of University Boulevard and Veirs Mill Road, the project dubbed Wheaton Gateway would feature 800 to 900 units, 30 percent of which would be earmarked as affordable housing, though the ultimate unit counts could change as plans are finalized, per the Business Journals, citing PS Ventures founder Shane Pollin. Plans for the project also call for up to 65,000 square feet for commercial use. 

It’s unclear when the JV acquired the site, which is currently home to a car dealership, a repair shop, and a pair of vacant lots. 

If approved, the project would move forward in two phases. The first would include the construction of the first two six- and 11-story buildings, due to begin by 2026, while the second phase would see the construction of the third 13-story building “when the market demands it,” Pollen told the Business Journals. 

The JV is also partnering with the Housing Opportunities Commission (HOC), Montgomery County’s affordable housing division — and it isn’t their first time teaming up. 

PS Ventures, Duffie and the HOC are also in the midst of developing the Hillandale Gateway, a separate mixed-use apartment complex in nearby Silver Spring, Md. That project will feature 463 units split between two buildings, 155 of which are to be set aside for people 62 and older.

Representatives for the joint venture did not immediately respond to a request for comment. 

Maryland is an expensive state to live in, particularly around the D.C. area. The cost of housing in Maryland is 45 percent higher than the national average, while cost of living in general is 16 percent higher, according to data from RentCafe. Housing in Bethesda, Md., not far from Wheaton and Silver Spring, is 14 percent higher than the state average. 

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

The volume of CMBS office loans either in special servicing or at risk of default has jumped from $26.6 billion in March 2023 to $52.2 billion in March 2024, according to KBRA. Out of a $168.4 billion national office CMBS securitization market, approximately 31 percent of all non-defeased CMBS loans that still have office as collateral are now distressed. 

“I think it’s a pretty tangible concern,” said Mike Brotschol, managing director at KCP and co-author of the report. “It’s probably the property type we’re thinking is most at risk and is positioned for outsized losses relative to other property types and asset classes.” 

Brotschol noted that dozens of headwinds are impacting the office sector following the shift in usage and rise of hybrid work since the COVID-19 pandemic struck four years ago. Cash-flow concerns stemming from record vacancies are making it harder to grow revenue, while higher concessions to attract tenants are impacting net operating income just as operating expenses are rising during a time of high inflation. 

To make matters worse for office CMBS, almost all of those loans are nonrecourse, meaning the lender can only take back the property, and not pursue other borrower assets. 

“Office as a property can be pretty capital intensive,” said Brotschol. “These are nonrecourse loans, so if borrowers no longer see upside, they won’t continue to commit capital when properties are operating in the red. And there’s capital hurdles to improve and maintain the quality of the assets.”  

Moreover, not all cities are created equal when it comes to CMBS distress. 

Of cities carrying more than $5 billion of outstanding CMBS office debt, Chicago took the cake with a distress rate of 75 percent — meaning 75 percent of the city’s CMBS balance collateralized by office debt is distressed. 

“It’s a really high number. It’s eye-popping for sure,” said Patrick Czupryna, managing director at KCP and co-author of the report. 

KCP’s next most distressed cities for office CMBS were Denver (65 percent), Houston (57 percent), Philadelphia (52 percent) and Atlanta (49 percent). New York and Los Angeles’ office CMBS distress rates were 25 percent and 30 percent, respectively. 

Both Brotschol and Czupryna emphasized that for many of these cities, particularly Chicago, the ratio of distressed CMBS office debt is augmented by the size of loans on specific office properties, notably large SASB loans. For instance, Willis Tower in Chicago carries a $1.3 billion SASB securitization originated in 2018; today the building’s cash flow reached $111 million compared to cash flows underwritten at $135 million annually.  

But some buildings are truly troubled. 333 South Wabash in Chicago carries a $240 million pari-passu loan across multiple CMBS conduits, but has been beset by declining cash flow and rising expenses recently, according to KBRA. The building’s real estate taxes jumped from $7 million to $11 million last year, and its largest tenant, Northern Trust, lessor of 45 percent of the property, plans to lay off 900 workers. To make matters worse, the building had a pricey $167.5 million renovation in 2019. 

“You have a problem on the absorption, revenue side plus rising operating costs are really putting a squeeze on cash flow,” said Czupryna. “When you have your basis increase, that really puts stress on debt service and debt service coverage … so we’re seeing that happen with a lot of floating-rate deals given the rise of rates.”

Brian Pascus can be reached at bpascus@commercialobserver.com 

Spokespeople for Lester Bleckner & Shaw and I’m Donut? declined to provide terms of the deal, but average asking retail rents in Times Square were $1,073 per square foot in the first quarter of 2024, according to a CBRE report.

I’m Donut? plans to open the outpost later this year in 2,390 square feet on the ground floor of 154 West 54th and 3,335 square feet in the basement. The deal was first reported by Eater New York.

“New York is a city where people from all over the world come together. It is also a gourmet city with a discerning palate,” Ryouta Hirako, founder of I’m Donut?, said in a statement. “I thought the best way to get people from all over the world to taste my doughnuts would be to open a store here.”

Hirako started the doughnut business in 2022 out of a shop in Tokyo and has quickly grown it since. It has five locations in Japan and is known for its variety of flavors — with some outposts offering more than 80 doughnuts to sample — and long lines.

While the Times Square outpost doesn’t have a menu yet, with I’m Donut? saying it will decide flavors based on “provenance and availability,” other locations boast honey and orange doughnuts, a French cruller, red bean cream and “I’m burger?,” a burger sandwiched inside a doughnut.

It’s unclear who brokered the deal, but Colliers (CIGI)’ David Green has been previously listed as Bow Tie’s broker for the building. Green and representatives for Colliers and Bow Tie did not immediately respond to requests for comment.

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

The length of the lease was 15 years and the average asking rent for retail in Brooklyn was $554 per square foot in the first quarter of 2024, according to the Business Journal and a PropertyShark report.

Floor & Decor leased the space as Bed Bath & Beyond was closing, so there was no asking rent, Madison Capital said.

In the past 12 months, Floor & Decor has gone from 200 national locations to 228, according to the company. The Brooklyn store is scheduled to open May 6.

“Bringing our full-sized warehouse store to New York City’s most populous borough is incredibly exciting given the limited opportunities in Brooklyn to accommodate a home improvement store of our immense magnitude,” Bryan Dodge, chief business development officer at Floor & Decor, said in a statement. “Brooklyn also illustrates our unique ability to adapt our store model to meet our customers in their neighborhoods.”

Jonathan Ratner, managing director of Madison Capital, represented the landlord in-house while Katz & Associates’ Brian Katz handled negotiations for Floor & Decor. Katz did not immediately respond to a request for comment.

“Floor & Decor’s business fits perfectly with the Class A commercial space offerings and robust infrastructure at this historic property, and we look forward to their success at the building and in Sunset Park,” Ratner said in a statement.

Mark Hallum can be reached at mhallum@commercialobserver.com.

Bryan Ley of JLL Capital Markets represented DRA. 

The 170,490-square-foot shopping complex at 42452 Bob Hope Drive comprises 10 buildings built in the early 1980s that underwent renovations in 2016 and 2022, according to AlbaneseCormier. Tenants at the property include Hobby Lobby with 48,175 square feet, Amazon Fresh with 30,126 square feet, CVS Pharmacy with just over 14,000 square feet and Wells Fargo with 8,640 square feet. 

“This acquisition provides an attractive mix of investment-grade credit and necessity-based tenancy in an established, high-growth market.” AlbaneseCormier Chief Investment Officer Clinton Mitchell said in a statement. 

A representative for DRA Advisors did not immediately respond to a request for comment. 

Grocery-anchored retail properties are all the rage in Southern California. The sale of Rancho Las Palmas comes less than a month after DRA sold the 357,000-square-foot Esplanade Shopping Center in Oxnard, Calif., on the other side of Los Angeles. Buyer Primestor Development bought that property for $90 million, or a slight discount from the $95 million DRA paid for it in 2018. 

Meanwhile, real estate investment trust Site Centers Corporation sold a 208,572-square-foot, fully-leased shopping center in Orange County, Calif. late last year for $53 million. The name of the private buyer was not disclosed. 

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

G4 Capital Partners financed the project, providing Schwartz with $117 million broken up into three notes: a $61.2 million piece, a $42 million piece, and a $13.7 million piece. Jason Behfarin, G4 Capital Partners managing partner and co-founder, is listed as the mortgagee on property records. 

Schwartz will pay the site’s previous owner, Isaac Hager and Daryl Hagler, $64 million to purchase the site and then develop a residential project across three lots, according to PincusCo. Hager and Hagler bought the site for $42.4 million in November 2022 after the previous owner’s plan for a high-rise condominium was scuttled by community leaders during its pre-development phase. 

960 Franklin Avenue is the former site of the Spice Factory. Developer Ian Bruce Eichner’s Continuum Company bought the site from Spice Factor owner, Zev Golombeck, in 2017 and planned to build two 39-story residential towers totaling 1.4 million square feet, of which 50 percent of units would be affordable. Two plans submitted to the community proposed development that would’ve yielded 1,578 units and 1,170 units, respectively. 

But Brooklyn community leaders and former New York City Mayor Bill de Blasio killed the plan in September 2021 before it could be approved, criticizing the project for the shadows its towers would create on the neighboring Brooklyn Botanical Garden. Ownership of 960 Franklin Avenue reverted back to Golombeck in 2022, as the 2017 purchase was contingent upon rezoning approval. 

It is unclear the type of residential project new owner Yitzchok Schwartz plans to build on the site. In June 2022, prior to selling, former owner Golombeck filed plans to build a six-story, 293-unit residential building spanning nearly 200,000 square feet on the site. 

The site is zoned for 88,800 square feet of buildable space and an additional 114,717 square feet of air rights for a total buildable area of 203,682 square feet. 

G4 Capital Partners did not respond to requests for comment. 

Brian Pascus can be reached at bpascus@commercialobserver.com 

In the end, the mayor largely got what he wanted. Once the legislative leaders reached an agreement, city officials cheered provisions that would make it easier to transform aging office buildings into housing, allow a denser concentration of apartments on residential lots, and incentivize developers to restart stalled projects throughout the city.

“It’s definitely worth celebrating, but now it’s really time to roll up our sleeves and create a modern zoning envelope that will allow for the creation of more housing in the city,” said Adolfo Carrion Jr., commissioner of the city Department of Housing Preservation and  Development (HPD). “We’re happy with what we came home with, knowing that permits for construction were way down and the housing vacancy rate is the lowest it’s been since we started tracking in the 1960s.”

The mayor’s own proposal, the “City of Yes for Housing Opportunity,” wasn’t dependent on the state budget to move forward. But the budget law removed a cap that restricted the size of a residential building to 12 times the lot on which it is built and included new incentives that could entice developers to build more rental properties for tenants earning less than the region’s median income. 

“Everything in City of Yes for Housing Opportunity is within the city’s own power to effectuate, but the state changes will certainly enhance its ability to deliver them,” City Planning Commissioner Dan Garodnick said. “The state tools are really helpful to enable us to get new housing built. The first thing for us to do is to create the new tools, and we’ll have additional public review before we map them.”

It wasn’t a coincidence that the Adams administration launched the public review for the City of Yes a mere two weeks after the budget vote. City planning officials will send a draft of their plan, which includes myriad changes to city zoning rules, to community boards and borough presidents this month with the goal of getting their feedback before they break for the summer. 

Once the community boards make their recommendations, Adams administration officials are aiming to get the proposal on the City Council’s calendar for a vote before the end of this year. Some council members have already pushed back against citywide alterations, arguing that their districts have vastly different needs.

“It won’t pass as is. There will be a lot of changes,” one council member warned.

But Garodnick believes the city’s new plan is well positioned to tackle the housing crisis by encouraging new development everywhere while still respecting neighborhood character. “We deliberately designed this proposal to enable a little more housing in every neighborhood so that we could have a big impact overall without the dramatic changes or impact on local infrastructure that local communities frequently fear,” he said.

Something old, something new

The measure that will have the most immediate effect on the creation of new housing in the city is the extension of the 421a tax incentive that the legislature let expire in June 2022.

Owners who applied to be eligible for the abatement will now have until 2030, instead of 2026, to complete their stalled projects. Real estate leaders estimated that the law’s extension would affect about 80 projects that started construction on their foundations but hadn’t gotten their temporary certificate of occupancy.

“This is a shot in the arm that the real estate industry needed,” said YuhTyng Patka, chair of law firm Adler & Stachenfeld’s real estate tax and incentives practice group. “Having building plans and already being in the ground is a significant jump-start as compared to projects that have yet to be designed and underwritten.”

Developers so thoroughly embraced the 421a tax abatement that they utilized it in seven out of 10 rental buildings built between 2010 and 2020 and rushed to file permit applications for 58,625 new units in the first six months of 2022 as its expiration loomed. Once the incentive no longer applied, owners proposed the construction of only 9,909 new units in the entirety of last year, a Real Estate Board of New York (REBNY) report in December 2023 found. 

Garodnick called the extension “absolutely critical” for the production of future affordable housing projects. “Without it, we likely would have seen extremely depressed housing production and we saw a significant drop off of permitted units in 2023, so this was a really important piece of the puzzle,” he said.

Adams officials and REBNY urged state legislative leaders to resurrect the tax incentive this year. Lawmakers ultimately agreed to extend the 421a deadline and also created a new incentive, 485-x, which requires owners to set aside 20 to 25 percent of their units at below-market rates for households earning no more than 100 percent of the area median income for a three-person household. The program also imposed a minimum-wage requirement of $35 an hour for workers on projects larger than 100 units, which rose even higher for development sites in Manhattan south of 96th Street and parts of Brooklyn and Queens.

But multiple real estate leaders downplayed the new incentive’s potential and argued that its high wage requirements would dissuade developers still having trouble securing financing for new projects. The city’s housing department also needs to finalize rules to implement the new program, which could take several months.

“Owners also need time to digest the new 485-x program, find a site, crunch the numbers, and see if a project makes sense,” Patka said. “I do not expect to see a dramatic uptick in filings due to 485-x in the near future.”

Near and FAR

The two development tax breaks weren’t the only city-friendly incentives that made the final version of the state budget.

The budget includes money for a program to encourage homeowners to create what are called accessory dwelling units (ADUs) — converted garages and the like. However, it’s unclear how soon it will benefit New York City. An early $59 million in funding is going to regions around the city such as Long Island, and the City of Yes plan already aims to incentivize ADUs. Still, homeowners in the city could get $175,000 each for ADUs conversions, depending on certain criteria. 

State lawmakers also added an exemption through the budget that would encourage owners to turn underutilized and vacant office properties into mixed-income rental housing. They moved up the date for buildings eligible for conversion, too, from those built before 1961 to those built before 1990, theoretically enabling the transformation of 136 million square feet of residential space and the creation of new homes for as many as 40,000 New Yorkers, city officials say. 

Most of those properties, which would have to go through the city’s extensive land use and review process, are concentrated in Manhattan, where nearly 23 percent of office space remained vacant as of March, according to Cushman & Wakefield data.

Carrion, the HPD commissioner, believes some developers will take advantage of the program, especially those with Class B or C offices in their portfolio.

“It’s hard to guess where office vacancy rates will go,” he said. “I don’t think they’ll get better than where they are, because remote-work patterns have cemented in people’s lives.”

The more significant zoning-related change that state lawmakers passed will give the city more authority in allowing developers to exceed the current floor area ratio (FAR) cap on a case-by-case basis. In other words, developers will be able to build residential projects up to 15 times the size of their lots, up from the current 12, once they go through the city’s extensive zoning review. 

But many real estate leaders were surprised in March when Deputy Mayor for Economic Development Maria Torres-Springer introduced two new residential zoning districts, R11 and R12, that would permit a concentration of units as high as 18 FAR. Those districts have not been mapped out yet, but insiders say they are meant for the city’s already dense central business districts such as Midtown South.

“I think what’s important for the city is to make sure they educate communities as much as possible how this will play out,” one insider said. “It’s not just allowing 18 FAR everywhere. It’s introducing it into the zoning resolution so on a project-by-project basis sites can develop over 12 FAR and make that point to communities that density might not happen in those neighborhoods that don’t have a lot of density now.”

The significance of equality for our clients is only growing as they become more diverse, too. In terms of gender diversity, we are now starting to see a shift from our more traditional clients.  As women advance their careers and increasingly assume leadership roles, they are seeking partners with broad and unique perspectives. This thoughtful approach isn’t because they are women, it’s driven by their desire to build better companies. 

As a result, it is critical to provide more support for women transitioning from mid-level or senior positions to executive leadership roles. A study conducted by CREW Network in 2019 found that while women in CRE hold about 54 percent of mid-level associate and senior positions and 27 percent of SVP, managing director and partner-level roles, they only account for nine percent of C-suite positions. These findings further highlight the crucial need to improve career development opportunities for managerial roles to strengthen the pipeline to the C-suite – and women’s potential to assume those positions. 

Diversity goes beyond gender itself, encompassing racial, ethnic, and cultural diversity. Understanding this notion not only helps create the inclusive workplace that every employee deserves, but it’s also good for business and value-creation. For instance, companies that have more diverse boards of directors perform better on the S&P 500, a dynamic which is enabling organizations across industries to further recognize that diversity is essential. In this vein, diversity is one of the keys to unlocking greater value as it brings different perspectives and ideas to the table, ultimately allowing organizations to tackle challenges with a breadth of solutions. 

Supporting Career Development and Professional Growth

Meeting clients’ needs requires the best talent, resources and technology to ensure the highest quality execution. That level of excellence can only be achieved by continuously aligning your organization with the clients it serves and the communities in which they work. 

An important part of Berkadia’s growth story is our commitment to career development for all professionals, and equally so for women across the organization. Strong support from the C-suite and senior staff down to junior employees is an incredibly important element of someone’s career as they seek to maximize their full potential. Though important for all individuals starting their careers, it is especially important for women to prioritize engagement and networking, as it encourages the development of genuine connections throughout their organization, allows them to take advantage of broader networking opportunities, and create a personal brand – ensuring they are “taking their seat at the table” in fields that have historically been male-dominated. 

At the end of the day, building a company culture where everyone can flourish matters. It starts with the job posting – does our job description encourage all individuals to apply or is there an inherent bias in our process?  In terms of current staff, we keep a keen eye on training and development opportunities in lockstep with employees’ unique personalities and skillsets, which we believe can help a company create more defined growth pathways and career advancement platforms.  

Berkadia’s Women-Led Team

Berkadia has made significant strides over the past several years in elevating women across our business. Specifically, the Berkadia Institutional Solutions platform has increased its gender diversity to become an entirely women-led platform. Hilary Provinse, Executive Vice President – Production and Capital Markets, along with Mary Ann King, Co-Head of Institutional Solutions, Dori Nolan, Senior Vice President – Institutional Solutions, and I have stepped up to support the both the investment sales and mortgage banking needs of Berkadia Institutional Solutions, a platform dedicated to serving institutional investors through a robust suite of services and resources. Not only is Berkadia Institutional Solutions led by women, but it is also comprised of some all-female teams – one example being the team I lead based out of Chicago. Under my leadership, Senior Director Emily Stang and Vice President Michelle Chang work to support institutional investors across the Midwest and we’ve found that our clients are extremely receptive to our business strategy. 

Together, these women lead a team of 360 employees and have a combined 125 years of experience in the CRE industry. As a team, they’ve already used their platform to build a supportive environment that promotes growth for Berkadia’s professionals and will continue helping support women in their pursuit of career growth and advancement. 

Looking to the Future

When it comes to growing Berkadia’s workforce, there are two key areas that are instrumental to our success: identifying top talent across all demographics within the CRE industry and attracting underrepresented individuals into the industry at-large through various talent programs that target professionals early in their career. 

Now more than ever, the industry is looking for women to assume more active leadership roles within their companies, teams, or various committees, a trend which should instill greater confidence in women’s ability to step up and seize this opportunity. The presence of women in leadership roles is not only a matter of gender equality but also a strategic imperative for the industry’s continued success and innovation. As we look to the future, it’s clear that women’s leadership will be a driving force in shaping a more vibrant, progressive and prosperous industry for years to come. 

River District 14’s units will range from 575-square-foot studio apartments to 915-square-foot two-bedroom units. A few apartments will be bigger than 1,000 square feet. Prices range from $490,000 to $780,000. 

The project will include two towers at Northwest 14th Street and Northwest 14th Avenue. Amenities will include a gym, coworking space and two indoor pickleball courts.

The units are designed with 9-foot ceilings, and each apartment gets one parking space. The River District 14 units are fully furnished, letting owners immediately begin renting them out.

Miami has seen a surge of short-term rental projects. For instance, North Development is building the 12-story, 172-unit Domus Flats at Brickell Park at 1611 SW Second Avenue. The condo-hotel brand also delivers units that are fully furnished. Once the building is completed in 2025, owners can live in the units or operate the apartments as short-term rentals.

ISG World reports that 8,647 short-term rental units are being developed in Miami, mostly downtown and in the Brickell district.

Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.

The park service signed the assessment on April 29, following a public review process that began in March 2022. The city owns the stadium, but it sits on land the park service administers.

The U.S. House of Representatives passed a bill in February allowing the city to redevelop the site, which could pave the way for a new stadium for the Commanders. The legislation is pending in the U.S. Senate.

The football team has been playing at Commanders Field, formerly FedEx Field, in Landover, Md., since it departed RFK in 2019. Commanders President Josh Harris told the Washington Business Journal recently that while the team was in talks with Maryland on a permanent home, it is open to returning to D.C. Virginia has also expressed interest in hosting the team.

“We’re excited that the process is moving forward and taking us one step closer to the District putting the land at RFK to a higher and better use that benefits our residents and communities,” Deputy Mayor for Planning and Economic Development Nina Albert said Thursday.

Other sports teams that played in RFK Stadium over the years, included the D.C. United soccer team and baseball’s Washington Nationals. The stadium, which opened in 1961, has not been used since the Commanders left and “has fallen into disrepair,” the park service said in the assessment. Events DC, which operates the facility, has removed hazardous materials, stadium seats and other fixtures, according to the park service’s statement.

The agency approved dismantling the stadium in stages rather than imploding it, given the risks of sound, dust and vibration impacts to nearby properties.