Joint Efforts: Dearth Of Equity Investors Pushes NYC CRE's Biggest Players To Team Up
New York City’s top real estate owners are suddenly more willing to slice off a piece of their pie, shedding stakes in marquee assets.
They’re not exiting the market — in fact, it’s the opposite. At a time when traditional equity sources have dwindled and opportunities have become pricier, developers are finding ways to recycle capital without giving up the whole pie.
“We have seen people be more open to different structures and creative ideas when they build conviction around a certain type of investment,” Northmarq Managing Director Chinmay Bhatt said. “We are in this era where every deal is like a puzzle.”
Tumultuous times have driven passive investors to reduce direct exposure, either by moving their capital to the debt side of real estate capital stacks or to funds managed by private equity giants with diversified portfolios. Without interest from limited partners, developers pursuing the recovering market’s new opportunities must unlock equity elsewhere — and fast.
That means partnering with fellow developers, some of whom may have previously been competitors in the market.
As of 2024, general partner-led recapitalizations accounted for an estimated 65% to 75% of all real estate secondaries transactions. Historically, that percentage stood at or below a quarter, according to a report by the Commercial Real Estate Development Association, formerly known as NAIOP.
LPs are instead consolidating their rosters of GPs to those that operate diverse portfolios at scale.
A survey by McKinsey & Co. found that 17% of institutions expect to decrease the number of managers they invest in. Meanwhile, the top 20 managers’ share of trailing five-year, closed-end real estate fundraising increased to roughly 51% in 2025, 5 percentage points higher than in 2016.
SL Green has sold interests in a handful of buildings over the past 12 months, including at 346 Madison Ave., in which Mori Building Co. bought a 49% interest. The Tokyo-based developer also upped its stake in SL Green’s crown jewel, One Vanderbilt, to 16% in October.
New York’s largest office landlord agreed to sell the residential and retail components of 7 Dey St. for $222.6M, while retaining the office portion.
The deals are part of a $2.5B disposition plan. SL Green will use those proceeds to lower its debt by $1.2B and make $1B of new acquisitions.
“We're going to have to close a lot of deals here,” SL Green CEO and Chairman Marc Holliday said during the company’s 2025 investor day. “But there's a lot of demand for New York City assets right now and to be partners with SL Green in some of these great assets.”
The shift comes as the price to build grows from all sides. Conflicts overseas and inflation at home have kept construction and borrowing costs elevated. In New York City, prime land is scarce and projects have become more complicated than ever.
“The result is that every dollar of equity has become much more valuable,” Palladius Capital Management founder and CEO Nitin Chexal said.
Manhattan’s new office developments are largely supertalls, costing billions of dollars to get off the ground, like 343 Madison Ave. BXP told investors it is searching for a financial partner to take a 30% to 50% leveraged interest in the $2B tower. Norges Bank had initially agreed to partner but pulled out of the deal.
A joint venture between Vornado, Rudin and Ken Griffin was created to build a $6B tower at 350 Park Ave. Nearby, at 175 Park Ave., RXR and TF Cornerstone teamed up for a $6.5B office and hotel project.
“We still prefer to own 100% of an asset and only consider partnerships where we are particularly excited about the investment strategically and with the right partner,” TFC principal Jake Elghanayan said in an email.
That includes the firm’s partnership with Dune to pursue conversions outside of its home markets and 175 Park, “which at a total budget over $6 billion, is too large for us to consider as a 100% owned asset,” Elghanayan said.
In addition to its joint venture with TFC, RXR has moved into filling the gap across various balance sheets. Most recently, it infused $185M of equity into a new project by leading Gowanus developers Charney Cos., Tavros Capital and Incoco Capital. The planned tower’s capitalization, including $600M in debt, is $1B.
RXR is also leading a $500M recapitalization of 55 Broad St., an office-to-residential project in partnership with Silverstein Properties and Metro Loft Management, a specialist in adaptive reuse.
“As we've continued to grow and raise more capital, it's been a great way to expand our reach and form relationships with groups that are their perspective experts in whatever geography or sector,” RXR Investment Management Group Executive Vice President Russell Young said. “It's been a really rapidly growing part of the business.”
At the same time, JV agreements have become more sophisticated, giving developers control of what a partnership ultimately looks like, Chexal said. Terms include major decision rights, reporting requirements, approval thresholds, exit provisions, buy-sell mechanisms and the alignment of incentives.
“Twenty years ago, many investors wanted complete control because they viewed control as their primary risk mitigant,” Chexal said. “Today, the largest institutions recognize that the best operators often won't sell control of their highest-quality platforms or assets. If you want access to the best industrial portfolio, the premier multifamily developer or the highest-performing operating company, you often have to accept minority ownership.”
