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April 2012

April 2012 » Market Analysis » NY New Developments

April 2012 New York New Developments

New Developments

A joint venture partnership including New York Ace Hotel owner and GFI Capital Resources Group Gross’ GB Lodging is set to puchase the Temple Court building, a nine-story city landmark at 5 Beekman Street formerly owned by the Chetrit Group and Bonjour Capital.

Mayor Michael Bloomberg signed a bill to declare a formal state of emergency in New York City with regard to housing, allowing him to extend rent regulations for another three year even thought there is a Supreme Court challenge The mayor cited a citywide residential vacancy rate of 3.5 percent. Legally, rent regulations must be terminated if a citywide vacancy rate higher than 5 percent exists.

City officials revealed a plan for a new entrance to Coney Island Beach during a Brooklyn Community Board 13 economic development committee meeting.

Actovia, launched last September, provides in-depth mortgage information and reverse look-up for owners by landlord name and address.

Ruby Foo’s is fighting to renew its lease at 1626 Broadway after the 36-story office tower was acquired last May by a U.S. division of the Kuwaiti Investment Authority. In New York Supreme Court an affiliate sought a ruling that would prevent the new landlord, Fosterlane Management, from allegedly trying to find a new tenant to replace it in the space.

The 282-room hotel rising at 136 West 42nd Street will be branded a Hilton Garden Inn. Construction has begun, which is being developed next door to FelCor’s Knickerbocker Hotel by a joint venture of Highgate Holdings, Crown Acquisitions and Ashkenazy Acquisitions. Once construction is complete in 2014 Highgate will sell the hotel portion to Diamond Rock Hospitality for $445,000 per room.

An office building at 1170 Broadway, at 28th Street, will re-open next week as the NoMad Hotel, a 168-room lodge developed by Sydell Group, Ron Burkle and Square Mile Capital. The $100 million conversion includes a restaurant by Daniel Humm and Will Guidara.

City Planning Commissioner Amanda Burden today announced the start of a public review today for revisions to the citywide Waterfront Revitalization Program to further the goals of Vision 2020

Far Rockaway, Queens hospital, the Peninsula Hospital Center, will close. The state’s Department of Health shut down the hospital’s laboratory last month, and after a month of not being able to admit patients. A bankruptcy court judge ordered the hospital closed.

Kate’s Paperie the stationery store chain, which recently made a return to Soho, opening a pop-up shop in 2,300 square feet at 435 Broome Street, is struggling to fight a lawsuit from the Feil Organization for allegedly skipping out on a 15-year lease agreement at Feil’s building at 140 West 57th Street.

A recent sample of 50 office buildings in Midtown shows that over half have grown “significantly” over the past 20 years, while just one of them was actually physically expanded, 34 percent of the buildings expanded by 5 percent or more over the past 10 years. By expansion, the study means new building measurements issued by landlords, such as including hallway and lobby space in rentable square footage.

Studio space for film and television productions is scarce as a increasing number of productions head to New York City. NYC is happy to accommodate the film industry, as they estimate local productions support around 4,000 businesses. To that end 45,000 additional square feet of soundstage space are opening in Brooklyn.

Community Preservation Corporation, developer of the massive apartment complex planned at the former Domino Sugar refinery on the Williamsburg waterfront, has an urgent need for a development partner and injection of $50 million in capital. The CPC began exploring a sale of its Domino Sugar Factor project last month, as it is struggling financially because it got swept up in speculative lending for large-scale condominium projects during the boom.The Katan Group, CPC’s partner in the project, filed suit against CPC alleging breach of fiduciary duty and negligent performance, among other charges.

Andres Perez, a board member of Bronx-based Picture the Homeless, held a course to teach homeless people to take control of vacant apartments. The meeting was held outside a largely vacant East New York housing complex called Arlington Village. This Bronx non-profit that has received city funding is offering homeless New Yorkers lessons on how to squat in city-owned buildings.

Melvyn Kaufman, a longtime executive of the William Kaufman Organization who built six Midtown skyscrapers and several more in the Financial District has died on March 18.

Gov. Cuomo and legislative leaders finalized a deal to fund the final three years of the MTA’s five-year capital program. The $13.1 billion agreement means projects like the Second Ave. subway, an East Side access line for the Long Island Rail Road, extension of the No. 7 line and completion of the Fulton St. transit center can proceed. This will also allow the MTA to go ahead with the purchase of subway and rail cars, a green bus program, station and communication improvement, and new elevators and escalators.

The median home price in Central Harlem rose 18 percent between 2010 and 2011, while the median price in East Harlem rose nearly 5 percent, compared to an island-wide increase of just 1 percent.

Morris Moinian paid $39 million for the Pan American Magazine Building on Sixth Avenue. Moinin will demolish the eight-story structure, at 1150 Sixth Avenue between 44th and 45th streets, and has approval to replace it with a $140 million tower with 35 to 40 stories and 140,000 square feet.

A new City Planning proposal would reduce the number of parking spaces required in residential developments in Downtown Brooklyn and completely eliminate the mandate from below-market-rate buildings. The proposal will be presented within a few months.

Extell Development is facing foreclosure at the site of a longstanding flea market known as the Antiques Garage in Chelsea, which it purchased for $42.7 million in 2006 and for which it filed hotel plans a few years ago. A Department of Buildings filing shows Extell filed plans for a 233,544-square-foot, 29-story hotel at the site, at 112 West 25th Street, in 2009.

Northwood Hospitality is set to begin a $100 million renovation of the 900-room New York Palace hotel which it acquired last year for $400 million. The hotel will remain open during the renovation as the construction will work its way from the 176 priciest rooms on upper floors, known as the Towers rooms and suites, down.

The property, a former Howard Johnson between Seventh and Eighth avenues, was released back to the ownership group of Bobby Cayre, Alex Adjmi, Michael Cayre and Jack Dushey after begin “tied up” by the Metropolitan Transportation Authority. The ownership group is moving forward with plans for a 39-story, 330-room hotel on West 35th Street.

The Times Square Theater is getting a $60 million makeover and a new tenant to bring performance back to the 1920s-vintage venue that’s sat empty for more than 20 years. Broadway 4D Theatres signed a lease with landlord New 42nd Street to bring a show that incorporates three-dimensional film and in-theater affects into musical performances to 217 West 42nd Street.

The city has issued a request for proposals to design, construct, install and operate solar and wind power facilities at Fresh Kills on Staten Island. Approximately 75 acres of land are available to be developed into large-scale renewable energy facilities. When completed, the project could more than double the city’s current renewable energy capacity.

Morgan Stanley has advanced “beyond the term-sheet stage” in negotiations to convert its 800,000 square feet at One New York Plaza, which it currently subleases from Wells Fargo, to a direct lease. Morgan Stanley wants to add another 300,000 square feet to its footprint.

Chadbourne & Parke has stopped negotiating for office space at 1 World Trade Center. This came as a surprise because Chadbourne must relocate from its 300,000 feet at 30 Rockefeller Plaza by 2014

A joint venture partnership including New York Ace Hotel owner and GFI Capital Resources Group President Allen Gross’ GB Lodging has purchased 5 Beekman Street and will become a hotel under the Thompson Hotels brand, operated by Commune Hotels & Resorts.

LCOR has secured a $50 million construction loan from German bank Helaba to develop a 234-unit rental building in Williamsburg. LCOR purchased the vacant site, located at 250 North 10th Street between Roebling and Union avenues in Williamsburg, last year. Construction is to begin immediately, with leases anticipated to begin in the fall of 2013.

In a down office leasing market, landlords are not only offering more in the way of tenant incentives — such as paying for a tenant’s build out. For instance, at 229 West 43rd Street, landlord Blackstone Group is willing to create outdoor terraces and private entrances and is even considering letting workers bring their dogs to work.

Asian-based investment bank Nomura will shed office space at Worldwide Plaza on 50th Street and Eighth Avenue by not occupying a 160,000-square-foot portion of the 900,000 square feet it leases. Nomura could give back 200,000 to 250,000 square feet. Nomura already has between 500,000 and 600,000 square feet of office space downtown in the World Financial Center .

Societe Generale recently put two floors of office space at 245 Park Avenue on the market — about 72,000 square feet

Dewey & Leboeuf, is facing financial distress. The firm, whose real estate division is headed by Stuart Saft, cut 5 percent of its lawyers and 6 percent of its staff, 19 of its 300 partners have left since January and 12 more are expected to leave.

Los Angeles-based CIM Group closed its majority stake in a high-rise residential tower and retail development site in Midtown. The site, at 303 East 51st Street, will be co-developed by CIM Group and Ziel Feldman’s HFZ Capital and construction will begin later this year.

Forest City Ratner will do “everything [they] can to avoid” the controversial stacked interim parking at the Barclays Center that may be necessary, The company was working hard to avoid parking that uses hydraulic lifts to stack cars, which would be necessary to provide the 1,100 parking spaces New York State has mandated for the Barclays Center, until permanent parking is built.

Upper East Side’s Community Board 8 opposed Memorial Sloan-Kettering Cancer Center’s expansion plans on York Avenue and 61st Street. The opposition stemmed from the impact a boxy, 261-foot-tall building would have on the light and air for residents of the co-op at 440 East 62nd Street.

Betting on the appeal of low-priced Chelsea condos, the Brodsky Organization is taking the unusual step of launching sales in the latest phase of its General Theological Seminary condo conversion with an open house next weekend. The 38-unit condo, at 422 West 20th Street, will have one- to three-bedroom units ranging from $640,000 to $2.1 million.

An audit released today of the New York City Housing Authority’s infrastructure improvement program, called Construction Management/Build, indicates that senior NYCHA officials are not able to respond quickly enough to change orders at construction projects. The report also shows other systemic deficiencies at the city agency, mostly due to the electronic tracking system the city uses.

A deal has been struck between the Department of Sanitation and the site’s developer over bringing an 800,000-square-foot hospital and educational facility to a former East 73rd Street Department of Sanitation incinerator. It will provide the Department of Sanitation with another garage where they can keep trucks, street sweepers and snow plows for use in Gramercy, Murray Hill and the Upper East Side.

A new Lower Manhattan luxury rental building will be completed next month at 254 Front Street, at Dover Street, near the South Street Seaport. It was purchased in 2004 by developer Barry Akrongold and was planned to be condominiums. However, the project’s lender, the Bank of Smithtown, never funded the construction, and Ben Shaoul’s Magnum Real Estate bought the project.

Rudin Management has made a number of concessions in its bid to build luxury apartments on the former St. Vincent’s hospital site, including a reduction of the number of units planned, from 450 to 350. The City Council’s land use committee hashed out the agreement with Rudin today, according to a statement from the City Council.

Real estate developer Madison Equities is facing a lawsuit from boutique advisory firm Hodes Weill & Associates for allegedly defaulting on a $12.1 million loan to refinance the Chelsea Modern condominium.

The lot, at the southwest corner of Wooster and Grand streets, is being prepared at 27 Wooster Street for the forthcoming eight-story condominium. The Stawski Group-developed project calls for an 16-unit residential building designed by Kohn Pederson Fox Associate.

Bruce Ratner, head of Forest City Ratner, developer said that the Atlantic Yards will be completed on time, that pre-fab construction is a great way to make housing construction more affordable and that after 2015, he’d like the Islanders to come to the sports arena.

The Hudson River Park Trust is soliciting proposals for a 200-seat waterside restaurant on Pier 26, the biggest full-service restaurant in the waterfront park that stretches from West 59th Street to Manhattan’s southern tip. The restaurant would also accommodate seat patrons on a rooftop terrace.

JPMorgan Chase has halted its efforts in creating a $750 million real estate fund, named Junius Real Estate Partners, due to a lack of interest in the high-risk and high-return deals it had planned.
Junius will restart fundraising efforts sometime in the future. Junius had recently made its first investment: the Salamander Resort & Spa, located in Middleburg, Va. It’s set to open next year, featuring 168 rooms and suites, plus an equestrian farm.

Planet Hollywood is closing to make room for an Italian restaurant. The current location, at 45th Street and Broadway in the heart of Times Square, is scheduled to close in June for a renovation that will result in a splitting of the three-level space between a smaller Planet Hollywood and the first outpost in the city of the Buca di Beppo chain.

While foreclosure and delinquency rates fell nationwide, local rates have increased, , and the delinquency for the White Plains-New York City-Wayne, NJ region set a new record. In the State of New York, the foreclosure rate was 4.64 percent in December 2011, up from 4 percent during the same month a year prior. Not only does the December figure eclipse the national rate of 3.37 percent, but the 0.64 percentage point increase is a marked difference from the direction the national rate is heading, as it fell 0.19 percent year-over-year

Long Island City-based Brooklyn Grange will expand its Queens rooftop garden operation to the Brooklyn Navy Yard. The farm will occupy a 45,000-square-foot rooftop plot on a building close to Flushing Avenue and Cumberland Street, which will be fully covered in soil to grow fruits and vegetables. A greenhouse will also sit atop the roof space. Below, the farm will host regular farmer’s markets to sell fresh ingredients to local residents and businesses.

Microsoft is one of the few large tenants with a sense of urgency for finding new space. Its lease at 1290 Sixth Avenue expires in 2014 and needs at least 200,000 square feet.

Industry City Associates issued a statement that 40 acres of affordable multi-use industrial space had come online at Industry City at Bush Terminal. Fitch Ratings downgraded a $2.6 billion pool of commercial real estate loans issued by Greenwich Capital Commercial Funding and led by a loan backed by the Bush Terminal waterfront complex. Fitch cited lower occupancies at Brooklyn’s Industry City complex, the Sunset Park creative enclave which comprises 40 acres of Bush Terminal, following a default on $300 million worth of loans in January 2011.

A new group of condominium-turned-rentals are hitting the market in Brooklyn. In this market owners can sell a new rental building in a short amount of time for almost the same price as a normally far more expensive condo.”

“Rents and the economy in general have come roaring back since the depths of the Great Recession,” Jeffrey Levine, chairman of Douglaston Development. Douglaston is building a $300 million, 509-unit rental tower in Williamsburg, at North 4th Street and Kent, near the Edge.

Related Companies has tapped architecture firm Diller Scofidio + Renfro to design the first residential building at Hudson Yards and aims for it to be completed by 2015. The building to rise to 800 feet at the northeast corner of Eleventh Avenue and 30th Street with about 700 units. Related said it hopes to complete the building around the same time the first office structure on the site, which has already sold 600,000 square feet of space to Coach, is finished.

There is a lawsuit between real estate mogul Aby Rosen and long time investor Harry Lis over whether millions of dollars have been properly invested and accounted for throughout the struggling RFR Realty empire. Lis, through his Gan Global Investments fund, alleges in a March 6 lawsuit filed in Manhattan Supreme Court that Rosen and partner Michael Fuchs took at least $2.5 million he invested at their 275 Madison Avenue office tower and re-invested them without his permission.

Howard Hughes Corp brought in Stanley Chera’s Crown Acquisitions to attract new tenants and help manage the mall for its planned renovation of South Street Seaport’s Pier 17. The new glass-shrouded, three-story mall will take the same footprint as the existing structure, and feature a rooftop park, walkways bisecting the mall and 250,000 square feet of selling space.

JDS Development’s conversion of the Verizon building in Chelsea will yield 53 condominium units priced between $3,000 and $10,000 per square foot. The project is a joint venture between JDS Development and Property Markets Group and obtained equity from Barry Sternlicht’s Starwood Capital. It is set to hit the market in this spring.]

The Wilf family’s Skyline Developers secured a $112 million construction loan to begin building an Upper East Side condominium. The Wells Fargo loan will allow it to start construction on a 19-story, 45-unit, Cetra Ruddy-designed condo at 200 East 79th Street, at the southeast corner of Third Avenue.

The Port Authority of New York & New Jersey has reversed course and is now fighting to keep a shipping terminal in Red Hook. Previous Port Authority Executive Director Chris Ward, was ready to move the locus of shipping in the borough to Sunset Park. The agency now wants to keep the shipping terminal open. If the terminal were to lose the inspectors required for international shipping facilities, many jobs could disappear.

Chinese banks have has stepped up to replace the European banks activity in New York City real estate. The Bank of China has quintupled its lending for U.S. properties since 2008 to $2.6 billion. And six of the eight U.S. property loans the bank issued last year were for in New York City. It lent $260 million to 3 Columbus Circle, and $175 million last month to refinance the Mandarin Oriental hotel in Columbus Circle.

Negotiations to preserve the Cabrini Center for Nursing and Rehabilitation failed, and the East Village facility will close this summer to make way for a condominium development by Magnum Real Estate

Shaoul acquired the 84,000-square-foot building, at 542 East 5th Street, for $25.5 million and immediately began circulating that the center would close.

Kent Swig is being sued by his former in-laws, and now the developer now faces a lawsuit from real estate investor M. Myers Mermel, which could force Swig out of his office building at 48 Wall Street.
The case is in state Supreme Court, and argues that Swig violated an agreement in the use of his assets late last year to pay off his debts: a $116 million judgment.

Fitch Ratings has downgraded a pool of loans, led in part by a 312-unit portfolio of Manhattan rental apartments owned by the Parkoff Organization. The Parkoff Portfolio represents 10.3 percent of the total loan pool from Morgan Stanley Capital Trust, which trades under the name MSCI 2007 HQ-12.

The Upper West Side’s Community Board 7 voted 37 to 0, with some abstentions, to limit the size of storefronts in the neighborhood. The rezoning will apply to Columbus Avenue between 72nd and 87th streets, and Amsterdam Avenue and Broadway, between 72nd and 110th streets. New retail leases will be limited to 40 feet of frontage and banks will be limited to 25 feet of frontage

Construction on a once-stalled condominium project in Long Island City is back on track and the development is set to launch sales in early April. One Murray Park, at 11-25 45th Avenue, is the first new condominium to launch sales in Long Island City in over a year.

Starwood Capital and Tribeca Associates are beginning construction on the 45-story condo and hotel tower planned for the former site of the Donnell Library in Midtown. Tishman Construction has begun excavation work at 20 West 53rd Street for the 340,000-square-foot building’s foundation.

The East River-facing U.N. building, which has been under renovation since 2009, has received a final cost for the work: $2 billion, which is 4 percent over the project’s initial budget. Changes include asbestos abatement, new shared work stations from private offices and blast-proof windows that cannot be opened due to security measures.

Douglaston Development is facing a $62 million foreclosure suit from CW Capital after allegedly defaulting on loan payments for the Cameo, a luxury rental building at 311 West 50th Street in Manhattan. CW Capital alleges that Douglaston, led by chairman Jeff Levine, failed to make its monthly installments on $47 million in loans starting in August 2011, and has made no payments through last month

Empire State Realty Trust, which controls the Empire State Building, has been sued over its plan to become a real estate investment trust. Investor Leon Meyers filed suit in New York State Supreme Court, accusing the entity, in which he has an equity interest, of breach of fiduciary duty. The suit alleges that Empire State Realty Trust and Malkin Holdings “fail to provide the participants with material information sufficient to allow them to make informed decisions,” about the deal, and that “defendants failed to consider reasonable alternatives to the proposed transaction.” Last month the realty trust announced its plan to raise as much as $1 billion in an initial public offering and become a REIT. Two partnerships, led by Peter Malkin and his son Anthony Malkin, own the 102-story tower in conjunction with the estate of Leona Helmsley

A stalled Brooklyn development site at 683 Fourth Avenue in South Slope is coming back to life two years after a 16-unit condominium project by local developer Isaac Katan stalled due to lack of financing, according to the site’s new owner, Greenwood on Fourth LLC. Greenwood also recently completed a 26-unit rental at 433 Third Avenue in Gowanus, is planning to revive the plans by Katan for the building, between 21st and 22nd streets, but has decided to go rental.

J.D. Carlisle Development, said it acquired a stalled condo-hotel site in the Murray Hill section of Manhattan, and will construct a new rental building on the property in 2013. J.D. Carlisle, acquired the site, at 158 Madison Avenue, from lender North Hill Capital Management, a Manhattan-based lender that took over $34 million in defaulted loans at the property

As Fresh Direct grabs headlines for ditching Long Island City, FedEx Ground has forged plans to build a new $56 million on the grocer’s current block for a new distribution center. FedEx will close its Maspeth distribution facility next year to move into a 140,000-square-foot center on Borden Avenue.
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