The Big Picture
Capital is visibly returning to real estate deals, with several sizable financings and conversion projects advancing even as markets were closed on Sunday. As of Friday, February 27, mortgage rates were around 5.99 percent and the 10-year Treasury had hit a 2026 low, but new geopolitical risk tied to conflict with Iran could shake that backdrop.
This matters because debt costs and investor appetite determine how fast conversions, mixed-use builds and last-mile logistics projects get done. If you're an investor, you should note that lenders and developers are moving ahead on large, transformational projects across major U.S. markets.
Market Highlights
Quick facts and price-action context heading into the long weekend.
- Mortgage rates, as reported, finished last week at 5.99 percent, with the 10-year Treasury near a 2026 low as of Friday, February 27; geopolitical tensions with Iran add uncertainty to rate direction.
- RXR and One Investment Management closed more financing for the 61 Broadway office-to-residential conversion, a project valued at north of $500 million to create 796 units, with construction starting later this month.
- Bridge Industrial secured a $56.7 million construction loan to convert offices in Doral, Florida into warehouses, signaling continued appetite for industrial conversions near logistics hubs.
- Mark IV Capital got an $86 million construction loan for Phase I of The District in Round Rock, Texas, a 316-unit mixed-use project adjacent to Dell’s campus slated to deliver early 2028.
- Leasing momentum in Manhattan: Primary Ventures and Sigma Computing each signed for 26,252 square feet at 386 Park Avenue South, part of more than 65,600 square feet in new deals at the building.
- Betches Media signed a 23,038-square-foot lease at 360 Park Avenue South, taking the entire sixth floor in a Midtown South building.
Key Developments
Office-to-Residential Conversions Gather Steam
RXR’s 61 Broadway deal, now financed for the $500 million plus conversion into 796 residential units, is a marquee example of capital redeploying from underused office assets into multifamily. Construction starts later this month and first units are expected in the first half of 2028, which gives you a clear timeline for delivery and leasing velocity.
Bridge Industrial’s $56.7 million loan to convert former offices in Doral into warehouses shows conversions are not limited to housing. Industrial demand near airports and logistics corridors is keeping lenders willing to finance creative repurposing.
Construction Lending and Mixed-Use Development
Mark IV Capital’s $86 million construction loan for Phase I of The District in Round Rock, Texas was arranged by George Smith Partners with financing from BDT & MSD Partners and an Apollo affiliate. This project includes 316 apartments and a 40,750-square-foot food and beverage plaza, demonstrating lenders’ comfort with suburban mixed-use assets near major corporate campuses.
You should note that institutional capital is focused on markets with structural demand from employers and limited new supply, which tends to support rent growth over time.
Leasing, Sales and Local Transactions
Manhattan leasing remains active, with two tenants each taking 26,252 square feet at 386 Park Avenue South and a media tenant signing a 23,038-square-foot long-term lease at 360 Park Avenue South. Those deals point to selective office demand, especially in renovated, well-located properties.
On the hospitality front, the Franciscan Inn & Suites in Santa Barbara changed hands for $22.5 million. That trade shows boutique assets can still trade at modest premiums to recent purchase prices when local fundamentals hold up.
What to Watch
You'll want to track a few key items this week as markets reopen on Monday, March 2. First, monitor any geopolitical developments related to Iran, because escalation could push Treasury yields lower as investors seek safe havens or could push yields higher if risk premia drive inflation worries. Which way will it go, safe-haven flows or higher inflation expectations?
Second, keep an eye on economic prints that influence the Fed path and mortgage rates, since those will affect refinancing economics and project financing costs. Third, watch delivery timetables for major conversions like 61 Broadway and construction milestones for The District, because leasing performance at stabilization will determine returns.
Regulatory and legal items also matter. The Supreme Court tariffs ruling remains a variable for commercial owners that imported materials, and state-level bills such as New Jersey’s proposed reverse mortgage counseling rules could alter senior housing finance behavior.
Bottom Line
- Capital is active: several large construction and conversion loans closed, signaling lender confidence in certain segments of real estate.
- Conversions are a theme, both to residential and industrial, offering routes to reposition underutilized office stock.
- Keep a defensive eye on rates and geopolitics, because mortgage costs can change the economics of deals fast.
- Leasing activity in prime, renovated office buildings shows selective demand that could support values in well-located assets.
- If you own or follow specific projects, track delivery dates and leasing velocity, because those will drive near-term returns.
FAQ Section
Q: Will rising geopolitical risk push mortgage rates up or down? A: It depends, but initially safe-haven flows can push Treasury yields lower and mortgage rates down, while persistent inflation fears could push rates up.
Q: Are office-to-residential conversions a good investment for retail investors? A: Conversions can offer strong upside in markets with housing shortages, but they carry development, zoning and timeline risks, so you should evaluate projects case by case.
Q: What signs should you watch in leasing to assess recovery? A: Look at signed rents, tenant quality, lease term lengths and concessions, because improved metrics in these areas usually point to more durable demand.