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Good morning. One bank may be about to underwrite the priciest risk in real estate at record scale. A $3.8 billion loan for a single condo tower says plenty about conviction at the top of the market.
🎙️ This Week on No Cap: DWS's Todd Henderson on why real estate is becoming the AI immunity trade. (Thanks to our sponsor, Warespace)
The ice cream shop that makes money when it's cold
28 Wishes sells ice cream in Los Angeles. Below 70°F, sales fall about 20%. The weather is out of their hands. Rent isn't.
So the owners started putting about $20 a day into Kalshi weather markets, taking the cold side. The days that keep customers away now pay something back.
This is hedging. Big companies have done it for decades, buying protection against bad weather, fuel spikes and rising rates. It used to take a broker, a trading desk, and an order size no corner shop could meet.
Kalshi opens it up. Contracts on weather, fuel prices, inflation, tariffs and regulation, starting at a few dollars. Take a position on the outcome that would hurt you. If it hits, the payout softens it. If it doesn't, the contract expires and the good month was the point.
Market Snapshot
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Record ticket
The former HQ of the ABC television network on West 66th Street Source: Google Maps
JPMorgan is in talks to lead a roughly $3.8 billion loan to build Extell Development's planned Upper West Side condo tower, a financing that would rank among the largest construction loans ever made in the US.
The ask: Gary Barnett's Extell is seeking about $3.8 billion to fund a 1,200-foot supertall on West 66th Street, the parcel that once held the ABC television headquarters.
The parcel: Extell paid $930 million for the ABC site in 2022 and filed plans for a tower designed by Robert A.M. Stern Architects, extending Barnett's long bet on the very top of the market.
Company it keeps: The same track record runs through One57 and Central Park Tower, and a JPMorgan commitment would put the bank behind ultra-luxury condo risk at a scale few lenders will touch.
Supply backdrop: Manhattan's condo pipeline is thin, with just 2,800 new-development units on the market at the end of August, the lowest total in 12 years.
Policy wildcard: Mamdani has floated a tax on out-of-town condo owners, and the community board is pressing Extell to add affordable housing before the plan advances.
➥ THE TAKEAWAY
A tone-setter: Deals this size are rare, and they set how banks read the high end of the market. If the loan closes near $3.8 billion, Extell will have lined up roughly $5 billion in construction capital across two Manhattan projects in weeks.
Around New York
➥ The Bronx led New York at 5.9% annual rent growth, and the metro's 4.3% pace outran the 2.7% national rate as renters chase cheaper boroughs.
➥ Long Island office vacancy fell to 11.8% in Q2, the first reading below 12% since 2020, as 359,529 SF of positive absorption outpaced new supply.
➥ A 90,000-SF Hamptons Target opens Oct. 11 with a gray, red-free exterior on the last stand-alone Kmart site, a national tenant backfilling a legacy box.
➥ Swiss brand On signed an 85,000-SF, 15-year headquarters lease at Vornado's Penn 1 at $120 per foot, extending Steve Roth's Penn District leasing streak.
➥ Astoria developers filed plans for a 20-story, 402-unit tower at 31-29 Vernon Boulevard, with about 100 affordable apartments, replacing three industrial buildings near Socrates Sculpture Park.
➥ Manhattan's condo pipeline hit 2,800 new units in August, a 12-year low, though 1,000-plus units arrive this fall even as new-development contracts fell 26 percent year over year.
Follow the Money
| OFFICEMIDTOWN Cerity Partners expanded to about 68,300 SF at Global Holdings' 99 Park Avenue, adding 19,600 SF on a 15-year deal asking $90 per foot. |
| OFFICEMIDTOWN EAST A George Comfort-led JV landed a $386M New York Life loan to refinance 200 Madison Avenue, the 750,000-SF tower near Grand Central. |
| HOUSINGSTATEN ISLAND Speaker Julie Menin is courting developers for a North Shore rezoning, backed by $38M in fiscal 2027 funds, but only one nonprofit has signed on. |
| RESIDENTIALMANHATTAN With 30-year rates above 7%, luxury demand keeps pulling away: August contracts over $5M rose 13 percent while the rest of the market fell 7%. |
| OFFICESOHO Hudson Bay Capital lent $85M to refinance 300 Lafayette Street, the Microsoft-anchored building where the tenant fills the entire 63,000-SF office component. |
| MULTIFAMILYROOSEVELT ISLAND Related and Hudson Companies signed a $260M loan for a 242-unit residential building with retail. |
📈 CHART OF THE WEEK
The top 10 multifamily permitting metros accounted for 150,614 permitted units through August 2026, up 25% year over year, with New York, Los Angeles, Dallas and Houston leading national development activity.
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