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Manhattan, NY, office leasing up 83% YOY in May; NYC revamp targets startups

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Manhattan, NY, office leasing up 83% YOY in May; NYC revamp targets startups

Commercial real estate

* New office leases and renewals in Manhattan, N.Y., totaled 4.17 million square feet in May, a roughly 83% jump from 2.28 million square feet in May 2017, The Real Deal reported, citing Colliers International. The report noted that after a slow start, 2018 is shaping up to set a new leasing record. Leasing activity in 2017 set the second-highest record in over a decade, according to the report.

Year-to-date, the borough's leasing activity in May totaled 15.27 million square feet, reflecting a 4.4% increase from 14.62 million square feet in the year-ago period. The report noted that Colliers' figures do not include Deutsche Bank AG's planned 1.1 million-square-foot lease to move its New York headquarters to Time Warner Center from Wall Street.

* Company, a partnership between Milstein Properties LLC and technology startup incubator Grand Central Tech, is planning to renovate the old Biltmore Hotel at 335 Madison Ave. into a tech incubator location, with Milstein investing over $100 million, Bloomberg News reported. Matt Harrigan, co-founder and CEO of Company, said the location, across from Manhattan's Grand Central Terminal, will be like Silicon Valley in the center of New York, according to the report.

Milstein previously transformed the 1.1 million-square-foot hotel building into an office asset in the 1980s, renaming it Bank of America Plaza. The latest transformation at the 1913-built building is expected to provide 700,000 square feet of space for corporate tenants, 250,000 square feet for startups, and 150,000 square feet for retail and amenities.

* Reuters featured a report on the rise of property-focused start-ups, known as "proptech" firms, that are growing and attracting investments. The firms are undertaking a number of data-driven projects in commercial real estate to boost productivity, lower energy consumption and provide data for leasing purposes. The report noted that Jones Lang LaSalle Inc. unit LaSalle Investment Management has tracked roughly 190 proptech companies launched over the last three to four years.

* New York City has released a new proposal to encourage increased residential development in Brooklyn, N.Y.'s Gowanus neighborhood with hopes that the measure leads to a rezoning of the area, The Real Deal reported, citing Politico.

* Tavistock Development Co. is seeking approval from the Fort Lauderdale City Commission to connect two of its waterfront properties in Fort Lauderdale, Fla., with a public promenade, The Real Deal reported, citing a factsheet. The developer acquired the 22-acre Pier Sixty-Six Hotel & Marina for $163 million in 2016 and paid $24 million for the Sails Hotel Marina & Shops in 2017.

The proposed conceptual plan between Tavistock and the city includes up to 750 residential units, 384 hotel rooms, 150,000 square feet of commercial space and 4,000 square feet of marina space and boat slips.

* Exxon Mobil Corp. affiliate XTO Energy Inc. placed another Fort Worth, Texas, office building on the market, the Dallas Business Journal reported. The 24-story 714 Main building in the city's downtown is being marketed by JLL. The 185,757-square-foot property was built in 1921 and renovated in 2010.

XTO is winding up its Fort Worth operations and moving its corporate operations to Houston. JLL has completed negotiations for the sales of four of seven XTO properties in Fort Worth, the report added.

* Duke Realty Corp.'s Dallas office has pre-let more than 70% of a planned 635,000-square-foot bulk distribution facility in Flower Mound, Texas, to PPG, the Dallas Business Journal reported. The new facility at 1001 Lakeside Parkway in Duke Realty's Lakeside Ranch development is expected to complete in May 2019.

* LaSalle Investment Management Inc. acquired the 222,000-square-foot class A mixed-use T3 office project in Minneapolis on behalf of LaSalle Property Fund, a U.S. core open-ended real estate fund. The building, located in the city's North Loop submarket, was completed in 2016, according to a release. It is anchored by Amazon.com Inc., which occupies roughly 50% of the property.

The acquisition price was not disclosed.

* The Orange County Employees Retirement System has placed its $177.7 million ASB Allegiance Real Estate Fund on a watch list for underperformance and also plans to rebalance its $1.1 billion core open-ended fund portfolio in upcoming months, IPE Real Assets reported.

Housing

* PulteGroup Inc. acquired 30 acres in the Jacksonville, Fla., metro region to build 85 homes, and 62 acres in St. Augustine, Fla., for 101 homesites, the Jacksonville Business Journal reported. The 30-acre project is called Cascade Point, and the St. Augustine project is called Villages of Valencia.

* Lennar Corp. plans to build 42 homes in a new development called Legacy Village Townhomes in Waconia, Minn., the Minneapolis / St. Paul Business Journal reported, citing city documents.

Other real estate news

* Simon Property Group Inc. is forming a joint venture with Thai developer Siam Piwat Group, its first partnership in Thailand and fourth in Asia. The partnership initially plans to develop three projects under the Premium Outlets brand in Thailand.

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, the Hang Seng was up 0.53% to 31,259.10, while the Nikkei 225 rose 0.38% to 22,625.73.

In Europe, around midday, the FTSE 100 rose 0.37% to 7,716.06, and the Euronext 100 shed 0.14% to 1,061.64.

On the macro front

The bank reserve settlement report, the MBA mortgage applications report, the international trade report, the productivity and costs report, the EIA petroleum status report and Treasury STRIPS are due out today.

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