Tuesday, August 11, 2026

On Tap Today

  • Family affair: The family in charge of retail REIT Simon Property Group is fighting a legal battle over a separate real estate portfolio.

  • Falling prices: Sales crash while rents soar at Manhattan's most troubled supertall tower.

  • Conversion by the bay: New San Francisco office-to-housing conversion projects suggest a narrow path forward for adaptive reuse in the city.

Essential Metrics

Daily Market Snapshot
S&P 500 7,753.11 −4.53 (−0.06%)
FTSE Nareit All Equity REITs 850.80 −11.91 (−1.38%)
10-Year Treasury 4.70% +5 bp
SOFR 3.62% −3 bp
Data as of market close August 10, 2026. SOFR reflects the August 7 trade date.
The S&P 500 eased 0.06 percent to 7,753.11 as oil surged past $80 per barrel on stalled Strait of Hormuz negotiations, reviving inflation concerns ahead of Wednesday's consumer price report. The FTSE Nareit All Equity REITs index dropped 1.38 percent to 850.80, giving back Friday's gains as rate-sensitive property shares absorbed renewed pressure on yields. The 10-year Treasury yield climbed five basis points to 4.70 percent, an unwelcome move for fixed-rate take-outs and refinancings underwritten off the benchmark just as inflation data looms. SOFR slipped three basis points to 3.62 percent, offering a modest reprieve on floating-rate carry for bridge and construction paper even as longer rates pushed higher.

Editor’s Pick

The Lawsuit Splitting Simon Property Group’s Founding Family

A family dispute at the top of Simon Property Group is spilling into court, but the fight is not directly over the publicly traded REIT. Herbert Simon, co-founder of America’s largest shopping center owner, is suing members of his family over control of SFG Company LLC, a private entity that holds separate family real estate assets.

The lawsuit centers on a restructuring completed by Herbert’s nephew, David Simon, less than two weeks before his death in March. Herbert alleges David transferred SFG’s assets into a newly created entity without obtaining required consent from family members whose preferential distribution rights were affected. The complaint argues the move accomplished a restructuring David had previously been unable to negotiate with Herbert.

David’s son, Eli Simon, who succeeded him as CEO of Simon Property Group and now manages SFG, has called the lawsuit meritless. The case could determine whether the family’s longstanding equity protections survive the restructuring, while offering a rare look at how much control over significant real estate assets remains concentrated within the Simon family.

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Fast Take

Distressed Sales and Record Rents Collide at Troubled Supertall

A half-floor condominium on the 94th floor of 432 Park Avenue sold for $22 million, down from a $33 million asking price two years ago and $3.75 million below its contract price earlier this month. A trust linked to the late Roy T. Eddleman, founder of Spectrum Labs, sold the unit at a $9.5 million loss from its 2019 purchase price of $31.5 million. No half-floor units in the building had traded since 2024. Listing broker Marc Riedel of Serhant called the price "the new market reality."
While sales prices fall, rents at the 1,396-foot tower are climbing to record levels. The same 94th floor unit had a signed lease at $85,000 per month before the buyer emerged. That rental price sparked competing deals: unit 66A rented for over $90,000 monthly, and unit 72A for $85,000. Two of the three units sold this year went to buyers who already owned elsewhere in the building. Some renters are drawn by the building's private restaurant run by Michelin-starred chef Shaun Hergatt and the social pull of neighbors already in residence.
The building filed a work permit application with the city's Department of Buildings on August 4 as repair work begins. A 2024 engineering report warned that concrete cracks could send debris falling and potentially render the structure uninhabitable without a $160 million renovation. The condo board sued CIM Group, Macklowe Properties, and the sponsor entity in 2021 over more than 1,500 alleged construction and design defects. A second suit filed in 2025 alleges the developers knew about facade cracking during construction and concealed it from buyers and city inspectors; CIM has denied the allegations and is seeking dismissal.
Built in 2015 and designed by the late architect Rafael Viñoly, the supertall has faced complaints about swaying, groaning, leaks, power outages, and elevator problems since it opened. Viñoly acknowledged the building "has a couple of screw-ups," including oversized window frames and bathrooms positioned for prime views instead of living areas. Residents have reported elevators getting stuck during high winds and flooding from facade damage. Drones are now surveying the tower ahead of the planned $160 million repair effort, which owners hope courts will force the developer to fund.
 
Fast Take

Adaptive Reuse Developers Find Narrow Path Forward in San Francisco

Marc Babsin of Emerald Fund and Jack Sylvan of SDG filed plans to convert 150 Hayes Street, a vacant six-story office building in San Francisco's Civic Center, into 104 apartments. The developers will add a seventh floor and replace the 1968 building's facade with glass and bronze. Washington Capital Management is backing the project, which will acquire the property from the Academy of Art later this year. The conversion will gut the interior and replace mechanical systems, reducing overall floor area from roughly 138,460 square feet to 132,961 square feet while adding height from 74 feet to 100 feet.
Babsin and Sylvan spent years lobbying for policies that would make office-to-housing conversions financially viable, including transfer tax cuts, commercial rezoning, and eliminated fees and affordable housing requirements. With those policies in place, the developers scouted more than two dozen office buildings across the city but found that Class A towers remained too expensive or still had tenants. The Academy of Art has been shedding downtown real estate amid declining enrollment and rising remote learning, making 150 Hayes available at a price low enough for the conversion to pencil. San Francisco's office stock is eight times smaller than New York's and sits in a seismic zone, which adds construction costs and narrows the pool of viable candidates.
Only one other San Francisco office conversion was announced in the past six years: the Humboldt Building on Market Street, which was abandoned in 2023 after the developer failed to secure financing. Hudson Pacific Properties submitted plans last month to convert 901 Market into 136 units, and Ocean Avenue Real Estate Fund is proposing 70 units at 2300 Stockton Street. Each project required a specific set of conditions: a building past its useful life, an owner willing to pivot, and a developer willing to bet on the conversion. Emerald Fund previously converted 100 Van Ness into 418 apartments a decade ago.

Popular Articles

From Lease Abstraction to Lease Action

As commercial real estate organizations move from AI experimentation to production deployment, they are discovering benefits that go well beyond efficiency, including a clearer picture of how their own organizations actually function.

https://propmodo.com/from-lease-abstraction-to-lease-action/

After the LA Fires, a New Research Initiative Is Trying to Create a Playbook for Soil Safety

The Palisades and Eaton fires destroyed more than 16,000 structures and left property owners navigating soil contamination without a consistent playbook. A LightBox-funded Purdue University initiative is working to change that before the next disaster strikes.

https://propmodo.com/after-the-la-fires-a-new-research-initiative-is-trying-to-create-a-playbook-for-soil-safety/

The Office Market Is Finally Posting Numbers That Look Like 2019

U.S. office leasing has surpassed pre-pandemic norms, driven by AI demand, premium buildings, tighter supply, and a sharp San Francisco rebound.

https://propmodo.com/the-office-market-is-finally-posting-numbers-that-look-like-2019/

Commercial Real Estate’s Tax Problem Is Finally Getting Smarter

Centralized data, automated monitoring, and managed payment platforms are helping commercial real estate owners reduce property tax risk across large and complex portfolios.

https://propmodo.com/commercial-real-estates-tax-problem-is-finally-getting-smarter/

Government Property Tax Technology Keeps Failing. The Private Sector Is Building Around It.

Government property tax systems keep failing to deliver, and the Cook County debacle is the clearest proof yet that the real estate industry cannot afford to wait for them to improve.

https://propmodo.com/government-property-tax-technology-keeps-failing-the-private-sector-is-building-around-it/

Flexibility Has Become the Most Important Feature an Office Building Can Offer

Smart buildings give organizations the flexibility to adapt spaces, technology, and workplace policies as hybrid work and workforce needs continue to evolve.

https://propmodo.com/flexibility-has-become-the-most-important-feature-an-office-building-can-offer/

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