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Vornado opposes 666 5th Ave. redo; NJ dangles $7B incentives for Amazon

Commercial real estate

* Vornado Realty Trust has rejected Kushner Cos.'s plan for an extensive renovation of 666 Fifth Avenue in Manhattan, N.Y., to transform it into a luxury building, with the company telling brokers that the property will remain an office building and go through a "much more mundane renovation," Bloomberg News reported, citing three people familiar with the matter.

The move may pose a challenge to Kushner Cos.'s negotiations with lenders, which could result in the company losing control of the building. Vornado, a 49.5% stakeholder in the building, plans to hold off further investment in the asset unless it is reassured of the property's future.

Plans for the building's future have faced several challenges in 2017.

* The heads of Blackstone Group LP, Citigroup Inc., Morgan Stanley and American Express Co. are among New York City business leaders urging Inc. to choose the city for the company's planned second headquarters, Bloomberg News reported. Nonprofit economic development group Partnership for New York City is sending a letter to Amazon signed by more than 70 business leaders from banking, finance, commercial real estate, retail, media and other industries.

* Meanwhile, New Jersey Gov. Chris Christie seeks to woo the online retail giant's second headquarters to Newark, N.J., by deploying $7 billion in potential tax credits, Bloomberg News reported, citing a statement from the governor's office. Newark is the state's largest city, located 10 miles west of Manhattan, and "has been struggling to stage a broad economic revival since it was devastated by riots in 1967," the news outlet noted.

The New York Times also carried a report on Newark's bid for the Amazon headquarters.

* The Chicago area has officially submitted its bid for the Amazon headquarters, the Chicago Tribune reported, citing Chicago Mayor Rahm Emanuel and Illinois Gov. Bruce Rauner. The announcement from the city and state did not provide specific details of the bid, the report noted.

The deadline for submitting bids is Oct. 19.

* Chula Vista, Calif., a city near San Diego, intends to offer a $400 million incentive and development package to Amazon, with the Chula Vista City Council slated to vote on the incentives Oct. 17, the Phoenix Business Journal reported. The city's bid includes an eight million-square-foot "shovel-ready" development site and a proposal for Amazon to help develop a new university, according to the report.

* Amazon has leased the top six floors of office space at the Macy's building at 300 Pine St. in downtown Seattle, the GeekWire reported, citing confirmation from the company. The more than 475,000 square feet of office space atop the Macy's flagship store is owned by Starwood Capital Group.

Amazon is also slated to occupy the full 722,000-square-foot office space in the 58-story Rainier Square skyscraper in Seattle that is slated for opening in 2020.

* Reuters reported on the upcoming court deadline in the lawsuit filed by Quality Care Properties Inc. against its tenant HCR ManorCare concerning more than $300 million in rent at its 292 skilled nursing and assisted living locations. Quality Care is seeking to replace management with a court-appointed receiver. The landlord extended the deadline to Oct. 18 in late September following the departure of ManorCare's CEO.

The news outlet noted, citing analysts and advisers, that many in the healthcare industry are watching to see how the standoff plays out, as other leveraged senior housing chains are also struggling.

* Asking rents of New Jersey industrial space jumped 11.8% year over year in the third quarter to $7.09 per square foot, The Wall Street Journal reported, citing JLL. Overall vacancy rates in the state fell 0.6 percentage points to 4%. New Jersey had roughly 6.5 million square feet of industrial space under construction in the third quarter, a relatively high amount according to analysts, as land is limited in the state, the report noted.

* JDS Development, New Valley and other partners landed $62.5 million in construction financing for the Monad Terrace condo building in Miami Beach, Fla.'s South Beach neighborhood, The Real Deal reported. A previous lender sued developer Monad Terrace Property Owner LLC for failing to pay a $45.8 million mortgage in principal on the property, and the suit has been dismissed following the new financing, the report noted, citing Michael Stern, who heads JDS.

* Caddell Construction Co. won a $130 million contract to develop a new correctional facility in Escambia County, Fla., the Birmingham Business Journal reported. The three-story, 300,000-square-foot detention facility will span 19 acres next to another jail and is "being designed not to look like a jail but complement neighboring future commercial and retail development," according to the report.

After the bell

* Sienna Senior Living Inc. agreed to acquire a pair of Ontario retirement residences for about C$164 million and launched a roughly C$115 million bought-deal offering to partly fund the deal.

* Year over year, U.S. home sales in September declined 4.2%, while the median sales price rose 2.3% for the month in 54 surveyed metro areas, according to RE/MAX's October national housing report.

The day ahead

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

In Asia, the Hang Seng climbed 0.02% to 28,697.49, while the Nikkei 225 rose 0.38% to 21,336.12.

In Europe, around midday, the FTSE 100 rose 0.18% to 7,540.74 and the Euronext 100 gained 0.06% to 1,050.03.

On the macro front

The import and export prices report, the Redbook, the industrial production report, the housing market index, the Treasury budget and the Treasury International Capital report are due out today.

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