May 2026

North America

·Manhattan office bifurcation deepens as trophy rents top $320/sq ft and Penn District absorbs a quarter of relocations. Manhattan's office recovery is consolidating around a narrow set of trophy assets and modernised submarkets, with two recent leases pushing top-tier rents beyond $320 per square foot and a Cushman & Wakefield study confirming the Penn District as the city's dominant relocation destination. An unidentified international family office has signed a 10-year lease averaging $327.50/sq ft for 5,063 sq ft on the 50th floor of Soloviev Group's 9 W. 57th St., described as a citywide record, narrowly ahead of a 7,204 sq ft, five-year deal at SL Green's One Vanderbilt to Nvidia-backed AI infrastructure firm Nscale at a $320 starting rent. The pricing reflects acute trophy scarcity rather than broad market strength, with Manhattan's trophy vacancy at 6.3% in Q1 against an overall office vacancy of 13.3% per CoStar, while Q1 leasing of 12.4m sq ft per Savills was the strongest quarter since Q4 2019. The Penn Station submarket has captured almost a quarter of all Manhattan relocations from 2023-2025, drawing more than 3.5m sq ft, 83.2% of it from neighbouring Midtown submarkets, split across financial services (24%), professional services (23.7%), technology (18.8%) and media (10.7%). Vornado Realty Trust's Penn 2 anchors the trade, with 2025 leasing of 908,000 sq ft at $109/sq ft starting rents on 17-year average terms taking the building to 80% occupancy and submarket asking rents now sit 37.8% above the Midtown average. (Source: Commercial Observer, CoStar, Savills, Cushman & Wakefield, JLL, CBRE, 2026)

·Maefield's 20 Times Square back in special servicing as CMBS loan hits maturity wall. Maefield Development is once again in distress at 20 Times Square after the CMBS loan backing the property's 99-year ground lease was transferred to special servicing, with the borrower missing this month's maturity date according to Morningstar Credit. The trouble is a familiar one for Maefield, which together with Fortress Investment Group took full control of the development in 2018 by buying out Witkoff, Winthrop and other partners in a deal that valued the project at $1.6 billion. That recapitalisation was financed by France's Natixis, which kept $650m of debt on its balance sheet against the leasehold and securitised the remainder across one single-borrower CMBS and four conduit deals. The ownership structure created an awkward conflict, with Maefield and Fortress holding both the leasehold and the fee, effectively paying rent to themselves. The project, anchored by an Edition Hotel and high-profile Times Square retail and signage, has struggled to generate cash flow commensurate with its capital stack since opening. With the loan now in workout, the path forward likely involves either a maturity extension, a discounted payoff, or a handover of the asset to lenders, none of which bode well for the original 2018 valuation marks. (Source: Commercial Observer, Morningstar Credit, The Real Deal, 2026)

20 Times Square

·Brokerage giants post record Q1 as commercial real estate dealmaking roars back to pre-pandemic levels. JLL and Newmark joined CBRE in reporting record first-quarter results, signalling that 2026 is shaping up to be the strongest year for commercial real estate dealmaking since before the pandemic. JLL posted $6.4bn in Q1 revenue (up 11%) with profit nearly tripling to $159m, while Newmark generated $846.5m in revenue (up 27%) and a $14.4m profit (up 60%), marking its seventh consecutive quarter of double-digit top-line growth. Capital markets drove the surge, Newmark's investment sales and financing revenue jumped 46% year-over-year, JLL's capital markets revenue rose 21%, and Morgan Stanley's Ronald Kamdem projects global sales transaction volume will hit roughly $600bn this year, up 10%. Leasing demand is also outperforming, with JLL's CFO Kelly Howe noting that the AI boom has actually fuelled leasing activity from AI startups and financial services firms, particularly on the coasts. Data centres provided "meaningful contribution" to JLL's 16% leasing revenue growth, and Newmark's expansion into data centres and international markets is paying off. Newmark raised its full-year revenue guidance to $3.78-3.88bn (15-18% growth), while JLL held its EPS target at $21.80-23.50, implying ~20% earnings growth. Executives flagged the Iran conflict and Strait of Hormuz oil-tanker bottleneck as the key risk, with JLL's Christian Ulbrich warning that a prolonged conflict will weigh on the global economy in the back half of the year, though Newmark says deals aren't falling out of the pipeline. (Source: Jll, Newmark, CBRE, CoStar, 2026)

·       Meta slashes 20% of Seattle workforce as AI capex squeezes office footprint. Meta is cutting nearly 1,400 jobs across its Seattle-area workforce, about 20% of the regional headcount, in a move that puts roughly 850,800 sq ft of office space across Seattle, Bellevue and Redmond under fresh scrutiny. The layoffs hit teams at five locations housing Facebook, Instagram, WhatsApp, Oculus, advertising and infrastructure staff, plus around 230 remote employees based in Washington. Meta declined to specify which offices will be affected but acknowledged it has been "shedding office space since returning to the office post-pandemic," with further cuts likely. The driver is capex reallocation: Meta now expects to spend up to $145bn on capital expenditures this year, up from a prior $115bn estimate and roughly double 2025's $72bn, to fund AI data centre capacity. CEO Mark Zuckerberg framed the workforce cuts as part of an efficiency push to support those investments, with the company having already eliminated roughly 8,000 positions in its most recent round. Several Seattle-area leases offer convenient exit ramps, including a nearly 308,700 sq ft lease at 1101 Dexter Ave. N that expires next year. Counterintuitively, Meta recently renewed about 146,000 sq ft across two Redmond buildings, a small vote of confidence in the region despite the broader retrenchment. (Source: CoStar, Meta, 2026)

Dexter Ave. N office in Seattle currently occupied by Meta

·US hotels post seven straight weeks of RevPAR growth as pricing power offsets soft demand. US hotel performance remains steady amid global uncertainty, with RevPAR up 4.6% in the week of May 17-23, the seventh consecutive week of growth, driven by a 3.8% ADR increase that has outpaced room demand for four straight weeks. The class-level picture is increasingly K-shaped: luxury hotels led with 8.3% RevPAR growth on a 6.9% ADR lift, while midscale and economy properties continued to see softer demand, widening the performance gap across chain scales. Upscale and upper-midscale hotels delivered more balanced growth and accounted for 83% of total US demand gains over the past four weeks, anchoring overall volumes. San Francisco and Las Vegas led major markets with 28% RevPAR growth each, with SF showing steady recovery (14.2% demand increase) and Vegas riding event-driven demand including the first of four BTS shows at Allegiant Stadium (95.9% Saturday occupancy). Event-driven outperformance also lifted Tampa (+41.9% RevPAR on the SOF conference) and Philadelphia (+16.8% on the ISPOR conference), while Boston and St. Louis lagged with double-digit luxury declines. (Source: STR, CoStar, 2026)

ADR continues to drive weekly RevPAR growth.

Europe

·Total Energies seeks buyer for iconic La Défense tower at 90% discount. French oil and gas giant Total Energies has received bids of around €50 million for its 48-story Paris La Défense headquarters, Tour Total, which it will vacate at year-end when it relocates to The Link building in the same district. The 103,000 sq m tower, completed in 1985 and also known as Tour Coupole, is being marketed by JLL and has attracted interest from French and international investors, including US asset manager Nuveen, which owns the adjacent Tour Areva. The potential sale price represents a dramatic 90% discount from the €500 million the company sought when it last marketed the asset in 2020. Buyers are considering mixed-use redevelopment combining student accommodation, offices, retail and restaurants, though such projects typically take 5-10 years from acquisition to completion due to construction delays and permitting. Maintaining the empty 48-story building costs an estimated €12 million annually, not including permit expenses, while full demolition and rebuild would delay returns for several years. The listing reflects broader distress in La Défense, where Tour Europe is under contract for €80-90 million (down from €280 million in 2022), Tour Emblem is marketed at €100 million below its outstanding debt, and Unibail's Lightwell carries a €300 million price tag. The steep discounts underscore the challenges facing Paris office landlords amid vacancy pressures and repositioning costs in the capital's premier business district. (Source: Green Street, 2026)

Tour Total will be vacant by the end of the year

·Starwood halts redemptions for $23bn real estate fund as rate pressures mount. Starwood Capital Group has suspended redemptions for its Starwood Real Estate Income Trust (SREIT), citing a sudden surge in withdrawal requests driven by persistently high interest rates. In a letter to shareholders, chairman and CEO Barry Sternlicht attributed the move to "pressure created by high volume of redemption requests, which rose quite suddenly when interest rates spiked and have remained high," stressing the issue is not the underlying real estate but investor liquidity preferences. Redemption pressure has driven a roughly 6% decline in SREIT's net asset value per share over the past 12 months, prompting the temporary suspension to "better support share price stability and performance." Sternlicht expects rates to fall once geopolitical tensions subside, oil prices stabilise, and new Federal Reserve chair Kevin Warsh adopts a more dovish policy stance. The group plans to restore liquidity through capital raises, new investments in alternative real estate sectors, and strategic asset sales, with Sternlicht pledging to "reintroduce liquidity when it can be done in a consistent and sustainable way." Starwood had previously imposed redemption caps in mid-2024 before raising them in mid-2025, only to suspend withdrawals entirely now. The move mirrors UBS Real Estate's recent suspension of redemptions for its €400 million Euroinvest Immobilien fund for up to 36 months, underscoring broader liquidity stress across open-ended real estate vehicles. (Source: Starwood, Green Street, UBS, 2026)

·Barings plans strategic European real estate deployment with €2bn war chest. Barings is entering Europe's next real estate cycle with approximately €2 billion of equity capital to deploy across core, core-plus, and value-add mandates, targeting opportunistic deals in a market that has repriced 20-40% but remains clouded by geopolitical uncertainty. The US investment manager will focus heavily on logistics and residential, which accounted for 82% of its 2025 investment volume, with continued appetite for last-mile warehouses, multi-let industrial, build-to-rent, student housing, and selective build-to-sell in markets like Germany, France, and the UK. The firm is making a selective re-entry into offices, targeting income-producing assets in core cities like London, Paris, and Milan that are heavily under-rented and available at distressed prices, while avoiding ground-up development due to tight economics. Barings sees affordable housing as a major growth theme across the UK and Southern Europe, with plans to integrate it more prominently into mandates as rental affordability becomes a structural issue. The firm believes Europe now looks "pretty good compared to the rest of the world," citing stable interest rates, positive debt markets, and significant undersupply across sectors, which is drawing renewed interest from US and Asian investors seeking geographic diversification. (Source: Green Street, Barings, 2026)

Nick Pink, Head of European Real Estate Equity

·iQ Student Accommodation profits fall 4% as occupancy dips and staff costs surge. Blackstone-owned iQ Student Accommodation saw operating profits slip to £225.2 million in the year ending September 2024, down from £233.9 million the previous year, as higher staff costs and a small decline in occupancy weighed on results. Total employee costs jumped £7.9 million to £40.5 million, driven by pay increases and higher headcount, which more than offset savings from lower energy bills. Net assets fell from £2.26 billion to £2.08 billion, reflecting valuation markdowns caused by "a more challenging leasing environment leading to a decline in market rental values." Despite the setback, iQ reported that occupancy for the current academic year is running ahead of the prior year, and the company emphasised that the majority of its portfolio "continued to perform strongly." The operator recently expanded with new properties near the University of Warwick and in Glasgow, both fully let for the current academic year, and cited "highest ever customer advocacy and re-booking rates" as evidence of long-term resilience. The results come amid a broader slowdown in UK student accommodation, with listed rival Unite Group seeing shares drop more than 40% over the past year following profit warnings tied to slower rental growth and reduced occupancy. (Source: iQ Student Accommodation, Green Street, Unite Group, 2026)

Elgin Place, iQ Student Accommodation in Glasgow

·Frankfurt's Opernturm sale collapses for JP Morgan Asset Management consortium, raising concerns for European trophy office market. GIC and HKMA's €850m sale of Frankfurt's landmark Opernturm with HKMA's stake fronted by JP Morgan Asset Management has fallen through after exclusive bidder Erich Schwaiger let his exclusivity agreement lapse, unable to secure financing for the deal. Other bids had come in around €800m, but the owner consortium refused to budge on pricing, having launched the sale at €900m last summer through BNP Paribas Real Estate and Eastdil Secured. Industry insiders called the failure a "death knell" for large-scale office transactions, noting that if Europe's best property can't trade, the outlook for lesser assets is grim, though smaller offices face less of a headwind given Opernturm's sheer scale was a key obstacle. Brokers also questioned whether the 5% gross yield expectation was too aggressive given the building, while core, is not new and will require upgrade capex. The 67,200 sqm tower, home to UBS and soon KPMG, generates €38m in annual income and was acquired by the consortium for €550m in 2010. Schwaiger's failure follows other signs his acquisition spree is stalling, including an unclosed €130m Hirmer department store deal in Munich where he still needs €92m of financing. Berlin Hyp refinanced the asset with a €500m loan at end-2025, and market participants now expect the owners to pursue short-term refinancing rather than lock in long-term debt at unfavourable rates. With senior lenders capping LTVs at 60%, the consortium may need to inject fresh equity or bring in a recapitalisation partner to stabilise the asset. (Source: Green Street, Financial Times, 2026)