• Almost 50 years ago, a young Donald Trump had a career breakthrough redeveloping a NYC hotel.
• Now, developers want to replace the property with the country's most expensive tower.
• The project's builders need almost $5 billion of federal loans to do it.

Donald Trump was a young developer eager to make a name for himself in the Manhattan real estate industry when he struck a career-making deal to redevelop the Commodore Hotel next to Grand Central Terminal into a 1,300-room Grand Hyatt clad in dark glass.

Nearly half a century later, Trump may again have an opportunity to play a role in the site's destiny when he returns to the White House.

New York developers RXR and TF Cornerstone have proposed leveling the property and raising a 1,575-foot-tall office and hotel tower in its place that would cost as much as $6.5 billion to construct. It would be both the tallest skyscraper by roof height ever built in America as well as the most expensive.

Renderings of the mega-tower show how it will dwarf surrounding structures, including the neighboring landmark Chrysler Building and even a new headquarters tower being built nearby for JPMorgan Chase.

As part of the work, the pair have imagined making improvements to portions of the historic neighboring train terminal and the subway station below the site.

To help pay for the immense project — called 175 Park Avenue — the developers are taking an unusual approach at a moment when lenders have remained wary to finance such large-scale office development.

The property was recently included on a list of mostly transportation related projects that are seeking access to federal money earmarked for transit infrastructure development and upgrades.

RXR and TF Cornerstone are planning to apply for as much as $4.84 billion of federal loans to help pay for the tower, according to the document. The developers expect to spend as much as $6.5 billion on the project, a sum that includes about $550 million of accompanying transit improvements they will make as part of the project. The team is listed as having submitted a draft letter of interest in the federal money, a preliminary and non-binding step in applying for the funding.

The federal money is discretionary and administered by the US Department of Transportation, meaning that the incoming Trump administration — and possibly even the president himself — will have decision-making authority over which projects are ultimately awarded.

"I would expect he'd be supportive and excited about it, and obviously at the appropriate time we're going to be reaching out," Scott Rechler, the CEO and chairman of RXR, said, noting that he hadn't yet attempted to discuss the tower project with the president-elect or anyone in his circle. "He understands office buildings better than any president before."

A shortage of capital for office development

Rechler said the project team behind 175 Park Avenue is exploring the federal loans because of lingering dislocations in the lending market that have made it difficult to source financing from private sector lenders.

Banks, life insurance companies, debt funds, and other sources of mortgage debt have pulled away from office financing as a result of concerns about the stresses of higher interest rates on property values and vacancies created by the enduring popularity of hybrid and remote work.

Trey Morsbach, an executive managing director at JLL who co-leads the firm's real estate debt advisory practice, said that multi-billion-dollar office projects are tricky to finance even during favorable leasing and lending conditions, requiring collections of lenders to divide the loan and spread their risk.

One Vanderbilt, a roughly 1,400-foot-tall tower that opened in 2020 on the other side of Grand Central Terminal from 175 Park Avenue, for instance, received a $1.5 billion construction loan from a group of six banks in 2016 in order to proceed.

Morsbach said that lenders were still funding office construction today, in large part because there is a growing belief that newly built, high-end spaces will outperform the broader market. The pool of active financing groups has shrunk, however, challenging deals like 175 Park Avenue that rely on lending consortiums and benefit from market depth.

Lenders "are interested, but just aren't willing to commit the same scale," Morsbach said.

An unused pot of tens of billions of federal dollars

RXR and TF Cornerstone are aiming to tap lending programs called the Transportation Infrastructure Finance and Innovation Act and Railroad Rehabilitation and Improvement Financing. The programs, known by their acronyms Tifia and Rrif, respectively, offer projects access to low-cost financing and long payback periods stretching 35 years or more.

The cost benefits of sourcing a loan at the scale necessary to fund the construction of 175 Park Avenue from the federal government versus the private market would be "absolutely astronomical" for the developers, according to Stijn Van Nieuwerburgh, the Earle W. Kazis and Benjamin Schore Professor of Real Estate at Columbia Business School.

Although the programs are aimed at transit upgrades, they were updated as part of the Infrastructure Investment and Jobs Act in 2021 to allow funding for private development located "within a half mile walking distance of transit — commuter and intercity passenger rail stations," according to a DOT spokeswoman.

Few builders, however, have tapped the money, even though the Rrif program holds about $30 billion of unused funds, in part, because of the tedious qualification process.

To receive the financing, the 175 Park Avenue project must receive an investment grade credit rating from a major ratings agency and pass through a federal environmental review.

"It's extremely cumbersome to access that money," Van Nieuwerburgh said.

There has been optimism in the commercial real estate industry that the Trump administration will be more accommodative of business, including by stripping back regulation.

"Donald Trump comes in, his team cuts through the red tape, navigates through and unleashes a $6 billion project that's going to improve transit, create the biggest building in the Western hemisphere," Rechler said of 175 Park Avenue's potential appeal to the president-elect. "It speaks to a lot of his policies and the administration's approach to wanting to get things done."

Unflattering politics

Rechler, however, was for years closely aligned politically with former New York Governor Andrew Cuomo — a Democrat and nemesis of Trump's during his first term in the White House.

Rechler, who noted he is a registered independent, is hoping that economic development will prevail over politics.

But a person who is in line to become a Trump administration official said that Rechler's past associations may not be lost on the new administration.

"I'm not speaking for Trump, but I would be in utter shock if the transportation department, which must oversee the railroads, if they signed off on that deal," the person said.

• Commercial real estate sales star says data from his 40-year career is key to unlocking the power of AI.
• Bob Knakal has sold $22 billion of property, making him one of America's most successful brokers.
• He says he was fired by property giant JLL in February 2024. Now, he plans a career revival.

Bob Knakal climbed to the top of the commercial real estate sales business by focusing not on billion-dollar Manhattan skyscrapers, but on the tens of thousands of ordinary apartment buildings and land sites across New York City.

Now, the 62-year-old sales executive is adding a new approach by using artificial intelligence.

He says his new sales firm, BKREA, will harness property data and market observations that he has meticulously collected since the mid-1980s and couple it with the blooming powers of AI.

Using the much-heralded technology, Knakal believes he can compete with far larger real estate services companies with only a handful of employees. BKREA presently employs 15 workers and Knakal doesn't imagine getting much larger.

"The extent to which the world is going to change over the next five years is going to blow away what's happened over the last 40," Knakal said. "Realizing that, the first thing I did when I started the new firm – my first hire was an AI guy."

Many commercial real estate firms and professionals have begun to use AI – or have plans to — in order to gather market insights and sort through mountains of data, produce promotional and marketing materials, and help organize and manage client relationships and outreach.

Knakal says he believes his firm can harness the technology more effectively in its niche because the quality and consistency of his data is better than those of rivals.

Although New York City's property records are available to all online, Knakal has gathered reams of proprietary observations over the years, including nuanced information that is often not public. A rental apartment building slated for demolition and redevelopment, for instance, may have had holdout tenants that compromised its value. A vacant land site, meanwhile, may have an access agreement with its neighbor that would allow construction work to proceed more smoothly, enhancing its price tag.

If "you're putting bad data in, you're getting bad data out," Knakal said, adding that he spent three years during the pandemic "personally verifying 2,417 development site sales in the city" to further glean such insights.

"So how do I compete with the big firms?" Knakal asked. "Show me even one of them that's had the same head of research for 10 years."

Tenure at JLL

If Knakal, whose outward demeanor comes across as perpetually sunny, seems slightly irked by some of the big corporate real estate firms that dominate the nation's commercial property sales and services businesses, that's because he is.

Knakal built his career largely outside of that world, founding the small brokerage company Massey Knakal in 1988 with business partner Paul Massey. In subsequent decades, the pair grew the company into one of New York City's largest and most prolific property sales firms. In late 2014, the two men sold the 250-person business to the global commercial real estate company Cushman & Wakefield for $100 million.

Knakal joined Cushman as part of the sale, but left in 2018 for the rival corporate real estate services giant JLL.

Knakal's tenure at JLL came to an end in February 2024 when he was abruptly fired.

Recounting his exit, he said that he had been a guest on CNBC early that month to discuss the property market with the news anchor Brian Sullivan. He was subsequently warned by a person from JLL's marketing department that such media appearances first required company approval. Knakal said he explained to the person that his employment contract offered him "unfettered access to the press."

Shortly after, Knakal was the subject of a weekend profile in The New York Times. On Monday, he said he received a call from a JLL executive requesting an urgent meeting. Knakal sat down with the executive in a conference room in JLL's Manhattan office.

"As soon as I walked into the room, the head of HR walked in," Knakal said. "I knew I was being fired."

Knakal said his dismissal capped off what had been "the dark ages of my career."

"I don't think they appreciated what I brought to the table," he said.

A JLL spokesperson said: "We thank Bob for his contributions to the firm and wish him all the best in his future endeavors."

Massey, who also departed Cushman in 2018 and remains close with Knakal, said that while Knakal was one of the "most upbeat people" he knows, he had become "honest about how he was feeling: he wasn't having as much fun" in the commercial real estate business.

A desire to adapt and compete

BKREA mixes in analogue elements as well. In his new office on West 36th Street is an enormous printed map of Manhattan below 110th Street on the west side and 96th Street on the east to the island's southern tip. Propped across 8 tables, the 24-foot-long, 8-foot-wide printout details 27,649 commercial buildings and development sites in a way that both conveys the immensity of the market but is also more comprehensible to the senses.

Seth Samowitz, a 30-year old data expert who Knakal hired earlier this year to spearhead BKREA's AI efforts, said that he first thought having the giant map in an overwhelmingly digital world was "crazy." He has since come around.

"Honestly, it's the best marketing tool in the entire world," Samowitz said.

Knakal said he has used the map as a key prop in pitching his services to 26 clients so far. "I've gotten 26 exclusives."

Currently, he has been hired to sell about $2 billion of property assets, his largest pipeline in years. Knakal said he has sold 2,342 properties totaling about $22 billion over his career, more than almost any other broker in the country, he believes.

James Nelson, 49, now head of tri-state investment sales at Avison Young, began his career at Massey Knakal in the 1990s. He considers Knakal a mentor, saying that he admires Knakal's hunger to continue to adapt, innovate, and compete.

"Bob talks about what he's going to be doing in 10, 20, 30 years and it's being a broker," Nelson said. "He enjoys the process and the thrill of the hunt."

• Each year, Business Insider highlights Wall Street's rising stars.
• These are up-and-comers in investment banking, trading, and investing.
• All are 35 or younger. Check out our lists over the years.

For the past eight years, Business Insider's finance reporters have tapped their contacts to put together a list of who to watch on Wall Street.

We've received recommendations from bosses, colleagues, recruiters, and financial industry experts to create our annual feature. To be eligible, nominees must be based in the US, 35 or younger, and stand out among their peers. The editors make the final decisions.

Business Insider asked these rising stars from leading firms like Goldman, Blackstone, and Citadel to reflect on their successes, challenges, and best career advice.

2024

Meet our 2024 class

Our most recent set of young professionals reflect the future of finance. A number of them are shaping the trajectory of clean energy and artificial intelligence by financing the infrastructure that will underpin it. Some have seen their focus go from niche to hot asset. Others are influencing how Wall Street interacts with Main Street, using their skills and savvy to create new products and services for ordinary investors or giving employees at portfolio companies ownership stakes.

The rising stars also shared how they unwind and stay grounded in order to stay mentally sharp.

2023

Meet the 2023 class

2023's cohort included traders setting new playbooks for deals and trades and an investor building out burgeoning private markets businesses within the world's largest bank. These influencers also financed some of the biggest deals of the past few years and provided an edge to top investors with complex and innovative products.

They shared the lessons learned from their biggest career mistakes and how their Wall Street wardrobe had evolved from their COVID work-from-home days.

2022

Meet the class of 2022

As Wall Street navigated volatile markets, fewer deals, and plummeting company valuations, we found the players rising up despite the challenges.

One invested in space ventures, and another executed multibillion-dollar trades. Some up-and-comers pushed their teams to the top of industry rankings.

From books on the science of sleep to fantasy football strategy podcasts, here's what these bright leaders were reading and listening to. And here are some of their lessons and advice.

Here are the previous editions of our Wall Street rising stars list:

• 2021
• 2020
• 2019
• 2018
• 2017

• Hurt by higher interest rates, commercial real estate should see a modest rebound in 2025.
• Lingering inflation, however, could complicate the recovery by pushing up long-term interest rates.
• Industrial warehouses, a star of the sector, is poised to stand out in 2025.

The commercial property sector has had a bruising few years as rising interest rates pushed down values, complicated refinancing deals for hundreds of billions of dollars of expiring mortgages, and stymied investment.

In the office market, the situation was even more severe as hundreds of millions of square feet of space across the nation face accelerated obsolescence. Employees have embraced hybrid and remote work as a permanent offshoot of the pandemic, sapping demand for lesser quality space.

In recent months, however, the industry has felt relief from three successive rate cuts by the Federal Reserve that have shaved a percentage point off the fed funds rate — a benchmark for short-term lending rates. More cuts are expected in 2025. Resilient economic growth, meanwhile, has propelled demand for commercial space, including apartments, warehouses, retail stores, and hotel rooms. Some developers have even grown bullish on top-tier office projects as tenants flock to high end space.

In 2025, commercial real estate experts have signaled cautious optimism that the sector's rebound will continue, while also highlighting the challenges that could stymie growth.

Here are three trends for the industry to watch in 2025:

While the Fed has cut rates, relief hasn't arrived for the majority of loans

Of the roughly $4.7 trillion of total outstanding commercial real estate debt, about two-thirds is tied to long-term interest rates benchmarked against the 10-year Treasury yield, according to an estimate by the Mortgage Bankers Association. After dipping in the third quarter, long-term interest rates have jumped back up to the mid-4% range, close to where rates were before the Fed began cutting and far higher than where the 10-year was in recent years. The 10-year Treasury rate dipped below half a percentage point in 2020, its lowest level ever.

In 2025, observers expect long-term rates to hold steady, even if the Fed continues to trim short-term rates.

"The 10-year Treasury yield, that's really driven less now by anticipation of what the Fed might do and more by long-term expectations about economic growth and inflation and federal budget deficits," Jamie Woodwell, the MBA's head of commercial real estate research, said.

That could continue to complicate commercial real estate sales and refinancing deals.

The MBA projects that $570 billion of commercial real estate loans will mature in 2025, with banks holding about 38% of the overall inventory of outstanding debt in the sector.

Tomasz Piskorski a professor of real estate at Columbia Business School, said that 14% of commercial loans overall are tied to distressed assets that are now worth less than their debt and that 43% of commercial real estate loans "may face significant cash flow and refinancing issues." He has warned there could be tens of billions of dollars of potential losses for the banking sector and other lenders.

The real estate services giant CBRE, meanwhile, has forecast a modest 7.5% increase in investment sales activity, predicting about $410 billion of transactions in 2025. More sales would help buyers and sellers discover asset pricing and is considered a positive sign for a market recovery.

Richard Barkham, CBRE's chief economic economist, warned of lingering higher long-term interest rates that could dampen the rebound.

"Over the next four or five years we're likely to get upside shocks in inflation," Barkham said. "That points to an era of interest rates higher for longer."

Incoming Trump administration has generated optimism

Some of President-elect Donald Trump's campaign promises to enact tariffs on foreign goods, pressure the Fed for lower short term interest rates, and deport undocumented immigrants from the labor supply could spur inflation, reigniting problems in the commercial real estate financing market.

Nonetheless, the industry has been largely positive on the incoming administration.

Investors "expect better tax issues, they expect less regulation, they expect some real estate specific stuff like opportunity zones will get a bit of a boost," said Jim Costello, the co-head of real assets research at the data firm MSCI, referencing the opportunity zone program from President Trump's first term in office. Opportunity zones allowed real estate investors the chance to defer and avoid capital gains taxes if they reinvested investment proceeds in property projects in designated zones around the country.

President Trump has also sought to hire real estate executives in his administration, meaning that top officials could have an familiarity with the real estate business and its priorities. Howard Lutnick, a Wall Street billionaire who is also chairman of the large commercial real estate services firm Newmark Group, for instance, has been picked by Trump to lead the Commerce Department.

After a rocky 2024, industrial is still a darling

Industrial warehouse space boomed during the pandemic as American shoppers migrated online, boosting the need for logistics spaces that served e-commerce and also to onshore storage for a disrupted global supply chain.

A record total of roughly a billion square feet of industrial space was absorbed on balance by occupiers in 2022 and 2023, according to Craig Meyer, president of JLL's industrial leasing group in the Americas. That activity was enough to fill a vast pipeline of new space that was being added to the market. In 2022 and 2023, 1.1 billion square feet of new industrial space was delivered, according to JLL — also a record.

In 2024, however, demand could no longer keep pace with surging supply – stalling rental growth and pushing up vacancy.

About 375 million square feet of new space was added to the industrial market in 2024 – the third highest year on record after 2022 and 2023. But only about 111.3 million square feet of space has been absorbed on net, the lowest year of absorption in more than a decade. Vacancy has jumped to 6.8% from 4.9% a year ago. In the second quarter of 2022, vacancy had fallen as low as 3.3%.

Meyer said that the first half of 2024 was the nadir of the dip and expects a resurgent 2025.

"We had a contentious election coming up," Meyer said. "People were uncertain where interest rates were going."

In 2025, Meyer and other experts, including Barkham, CBRE's economist, see a strengthening industrial market as new supply dwindles and demand picks back up.

"The sectors that are big and improving and likely to lead investor interest are multifamily and industrial," Barkham said.

Some 268.9 million square feet of industrial space is presently under construction, according to JLL, the smallest pipeline since 2019. E-commerce, one of the biggest drivers of warehouse demand, continues to grow. According to CBRE, online sales are expected to absorb 30% of consumer spending by the end of the decade, up from 23% today, adding tailwinds to the segment.

• Howard Lutnick opened his wallet and Rolodex to turn Newmark into a commercial real estate success.
• Lutnick now plans to head to Washington to take a position as President Trump's commerce secretary.
• "I'll miss Howard," Newmark CEO Barry Gosin tells Business Insider. "But the day-to-day business runs."

Howard Lutnick, chosen by President-elect Donald Trump to be commerce secretary, has had a winning streak that extends beyond Wall Street and his investment banking firm, Cantor Fitzgerald.

In 2011, the billionaire arranged for his affiliate financial company, BGC Group, to purchase the New York-based commercial real estate services firm Newmark for an undisclosed sum.

In the ensuing years, BGC pumped in capital to buy up talent and acquire smaller rivals, brought Newmark public in 2017, and played a role in its management, with BGC executives taking posts at the firm and Lutnick chairing its board of directors.

The results have turned heads in the ultra-competitive real estate business.

The company, once focused on New York City's office market, is now mentioned alongside global powerhouse rivals like JLL, Cushman & Wakefield, and CBRE.

"Howard helped Barry transform transform Newmark from a regional player to now a global one," said Alexander Goldfarb, an analyst at Piper Sandler who covers Newmark, referencing Barry Gosin, Newmark's CEO.

"It's one of the best positioned real estate players today," Goldfarb added, noting that he has an "overweight" – or buy – rating on Newmark stock.

Now, Lutnick's move to Washington would leave Newmark – along with Cantor and BGC – without one of the architects of its success.

Lutnick has said he will divest his shares in Newmark and BGC, which is also public, and step from his leadership roles at the companies and also Cantor, which is privately owned.

Newmark executives say the firm has the talent and momentum to continue its path without Lutnick in the boardroom.

"I'll miss Howard," Gosin, who is 74, said. "But the day-to-day business runs."

Nonetheless, Lutnick has played a direct hand in the company's rise, observers said, using his Rolodex in corporate America, for instance, to help its executives open doors and win business.

"A lot of big tenant representation assignments, a lot of capital markets stuff came out of BGC and Howard's relationships," a former New York broker at the company told Business Insider. The person did not want to be identified because their past employment agreement with Newmark prevented them from speaking publicly about the company or its executives.

From $60 million to $3.8 billion

Newmark's performance has added to the lore of Lutnick's 40-year career, during which he built BGC and Cantor, where he is also CEO, into major players in the financial industry.

Before the BGC acquisition, Newmark was owned by a handful of the firm's top producing brokers, CEO Gosin, and the Gurals, a New York real estate family that owns a large portfolio of office properties.

BGC paid a little more than $60 million in cash and stock, according to reports at the time – a fraction of its roughly $3.8 billion market capitalization now.

Lutnick "saw a great opportunity to apply scale and professional management to a business and capitalize on a very fragmented industry," said Mark Weiss, a former Newmark broker who left the company in 2016 to head to rival Cushman & Wakefield. "And he did just that."

Lutnick's involvement bankrolled the business. The famously charming executive could also soften Gosin's bluntness.

Scott Panzer, a prominent commercial real estate leasing broker who left Newmark two years before BGC's acquisition for competitor JLL, bumped into Gosin and Lutnick together at the World Economic Forum in Davos, Switzerland, in around 2012.

"Oh my god you're here?" Panzer remembers Gosin telling him. "I think I'm going to have to rethink my membership to this."

"Howard and I both looked at one another, and we both started laughing," Panzer recalled.

Panzer said he is now cordial with Gosin and that he admires the transformation of Newmark that he and Lutnick were able to accomplish.

Gosin would not comment on the incident.

Not everyone is a fan of Howard Lutnick

Early in his tenure at Newmark, Lutnick drew ire from some dealmakers at the company for rejiggering its employment contracts. The new terms required brokers to accept about 10% of their commissions on deals in Newmark stock that would vest over time.

In 2014, Newmark purchased Grubb & Ellis, a commercial real estate services firm, out of bankruptcy. Some brokers from Grubb chose to leave in the merger. One former Grubb broker said that the employment contract he was offered contained onerous provisions, such as a sweeping non-compete restriction should he eventually leave the new company.

"You wouldn't even be able to drive a taxi cab," he said.

While the changes that Lutnick initiated may have ruffled some brokers, they eventually proved prescient, helping to retain talent and yielding profits for those who remained at the firm as Newmark's stock rose.

"Howard was helpful in setting up the business, in giving me the backbone and the foundational knowledge of how to do it differently — how to innovate, how to create a partnership, how to build a business for the long term," Gosin said.

More recently, Lutnick attracted shareholder outrage when he was awarded an enormous $50 million bonus from Newmark in 2021.

"There are some people who will not invest in Newmark because of that," Piper analyst Goldfarb said.

That anger has faded as Lutnick's vision of an ascendant Newmark has come to fruition.

"We are well in the conversation," Gosin said, referring to Newmark's increasing competitiveness in the top tier of the commercial real estate services and brokerage businesses.

David Falk, the president of Newmark's New York region and a leading leasing broker at the company, agreed. He said that Lutnick and Gosin had effectively built up other service lines at the company in ways that impressed clients and helped Falk – and other brokers at the firm – win assignments. The company's deep bench of talent, he said, is a far cry from the past when Newmark lagged major competitors in ancillary areas such as financing, property management, and investment sales.

"I hated the fact that 15 years ago, I would go to a meeting and I was maybe bringing someone I thought could handle an assignment, but I didn't feel great about it," Falk said. "Now we have stars everywhere."