🎰 Rithm Capital’s $1.6B bet on office recovery
🏢 The improbable revival of 666 (Now 660) Fifth Avenue
📈 What the Fed’s rate cut means for your money 
📚 Workshops & courses: AI, Selling into RE Owners & last call for Capital Raising

Data Viz of the Week: The Cap Rate Gap

Research firm JBREC asked investors: "at what cap rate would you aggressively deploy capital?" 

The results? 75-150bps spread above current cap rates across sectors, making it hard for traditional sponsors to get anything done and driving interest in niche sectors. 

Notably, multifamily and office (!) have the narrowest gaps while industrial and retail are still far off the mark.

Upcoming Thesis Driven Courses & Classes

• 📣 LAST CALL September 22: Fundamentals of Capital Raising (💻 Online): a 5-week online bootcamp in NYC on playbooks for raising capital from HNWIs, family offices and institutional investors - Sign up

• September 29: Fundamentals of Commercial Real Estate (💻 Online): a 5-week online bootcamp in NYC on playbooks for raising capital from HNWIs, family offices and institutional investors - Sign up

• October 6: Selling into Real Estate Owners (💻 Online): A bootcamp for people selling technology and products into the real estate industry - Sign up

• October 7-8: Workshop: AI in Real Estate (💻 Online): A two-day interactive workshop for real estate owners, operators, and developers exploring how to use AI in the sector - Sign up 

Three Articles We Loved from Last Week

It’s not easy keeping up with everything. Here are three articles we loved from the past week that you may have missed:

1. (Reuters) Rithm Capital bets on office space recovery with $1.6 billion Paramount Group deal 

   Rithm Capital is buying office REIT Paramount Group for $1.6B in cash, acquiring a portfolio of 17 office properties (13 owned + 4 managed) in NYC & San Francisco, totaling ~13.1 million sq ft with ~85% occupancy. They’re banking on improving rent rolls & demand despite broader concerns about office values, remote work, and interest rates.

2. (WSJ) The Improbable Revival of Manhattan’s 666 Fifth Avenue Office Tower 

   Brookfield Asset Management has fully leased out its renovated 1.25 million sq ft tower, formerly known as 666 Fifth Avenue (now 660 Fifth Avenue). After an extensive overhaul including new infrastructure, windows, terraces, and brand refresh, the building now commands one of the nation’s highest office rents (~$135/sq ft), signaling that prime office is bouncing back strong in select submarkets.

3. (Reuters) What the Fed’s rate cut means for your money 

   The Fed trimmed rates by 25bps recently, signaling a more borrower-friendly environment ahead. While this doesn’t immediately fix high borrowing costs for CRE, it does relieve pressure somewhat. Mortgage and CRE borrowers may benefit, but full effects likely lag.

Developer of the Week: Slate Property Group

NYC's Slate is going long on MOBs.

Slate Property Group and Evenhar Development are building a 13-story medical office building (MOB) at 1578 Lexington Avenue in East Harlem for Mount Sinai Health System. 

The 150,000 sq ft building will include outpatient clinical space, a daycare for Mount Sinai staff, a community center operated by Children’s Aid, and a facility for Life Changers Church. J.P. Morgan is providing a $119 million construction loan; GoldenTree Asset Management is contributing $40 million in preferred equity.

You can read more about Lionstone on the Thesis Driven GP database here.

Know about a developer doing something cool? Reach out to [email protected] with the tip!

Investor of the Week: Madison International

Madison International Realty is a New York–based real estate private equity firm founded in 2002 by Ronald Dickerman. The firm specializes in providing liquidity solutions to owners of Class A properties through equity monetizations, recapitalizations, and partner replacements, and has raised over $8B in commitments from more than 175 institutional investors worldwide.

Recent activity includes acquiring an 18.7% stake in Heitman’s European Residential Investment Partners fund, a 24.5% stake in UK-based Puma Property Finance (alongside a cornerstone commitment to its debut credit fund), and securing a €61M refinancing of a Warsaw office asset with partner Cavatina Holding.

With a global footprint spanning the U.S., U.K., and Western Europe, Madison is increasingly active in platform investments and credit, positioning itself as a go-to partner for institutional owners seeking flexible liquidity and growth capital.

Get more details on Madison International, including access to executive contacts, on the CapitalStack database here.

—Brad and Paul