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April 2013

April 2013 » Market Analysis » NY New Developments

April 2013: Manhattan New Developments

Manhattan New Developments

The Hudson Yards area is shaping up to be something of an office-{dynamic_word2} battleground, with the Moinian Group, Extell Development, the Related Companies and Brookfield Office Properties hunting for office tenants. Moinian's proposed 1.8 milllion-square-foot 3 Hudson Boulevard. Related's under-construction, 1.7 million-square-foot Coach building at 10th Avenue and 30th Street; and Brookfield's planned Manhattan West, which could bring 5.4 million square feet of office and residential space to Ninth Avenue. Extell has also proposed a 1.7 million-square-foot tower in the area dubbed 1 Hudson Yards.

Peebles Corporation will pay $160 million for 346 Broadway, a 13-story building. Peebles will develop a mixed-use commercial, residential and hotel property, and a 16,000 square feet of the property will be converted into a digital arts and media space for public use. "

The city also announced that the Chetrit Group will pay $89 million for 49-51 Chambers Street. Chetrit is expected to convert the property into a mixed-use residential and retail development.

Real estate investors are complaining that distressed opportunities in Manhattan have become much harder to find in recent months. Of the $29.9 billion in distressed assets identified in Manhattan after the financial crisis, 74 percent have been worked out. Just $3.3 billion in Manhattan assets went into distress in 2012, while $6.1 billion in distressed assets was worked out

Meadow Partners {dynamic_word3} an interest in a ground lease controlling a 25-story office tower at 211 East 43rd Street for $61 million. The company plans to own and manage the 177,000-square-foot tower that is currently about 90 percent leased to approximately 125 individual firms.

The Gap has become the latest retailer to file suit against Howard Hughes Corp., which is rebuilding Pier 17 at the South Street Seaport. The Dallas-based developer is facing two other suits from companies that want to continue operating their businesses at the pier, which was damaged during Hurricane Sandy.

New York-Presbyterian Hospital is planning more than $1 billion in new projects--including a huge ambulatory care center--and the takeover of New York Downtown Hospital. The hospital received preliminary approval for its expansion plans from state health regulators.
The hospital plans to build an ambulatory care center at 1283 York Ave., across the street from New York-Presbyterian-New York Weill Cornell Center Campus at 525 E. 68th St. The new building will house surgery, primary care and infusion therapy services, radiology, MRI, PET scanner and linear accelerator services. The price tag: $895.5 million.

The City Council voted to approve the rezoning of Hudson Square in Lower Manhattan. The rezoning will allow developers -- including the area's dominant player Trinity Real Estate -- to move forward with several large-scale hotel and residential projects. As part of the approval process, Speaker Christine Quinn secured a commitment for a vote on landmark status for the adjacent South Village Historic District. The zoning and land use committees signed off a plan that would let developers build 2,000 to 3,000 new apartments -- many of them affordable -- into the neighborhood. The full council is expected to OK the plan. if the plan gets the nod, the rezoning will take effect immediately

The City Planning Commission greenlighted plans to develop the Cornell NYC Tech campus, setting the stage for City Council to vote on the Roosevelt Island megaproject. Manhattan Community Board 8 approved the plan for the 12-acre campus in late December. The City Council vote is the last step in the seven-month public review process. Groundbreaking is planned for early 2014, with the campus opening scheduled for 2017 and the full build-out 20 years after that. The first phase of development encompasses 790,000 square feet, including the campus' first academic building. When completed, the 2.1 million square feet of facilities will house nearly 2,000 full-time graduate students.

The former Verizon building at 375 Pearl Street in Lower Manhattan is now the country's largest high-rise data center. Sabey Corp. bought the property out of foreclosure, spending $120 million in 2011 for a controlling interest in the 1.2 million-square-foot tower.

Harry Macklowe is building Manhattan's tallest residential tower at 432 Park, the building's 126 units will have a total asking price of $2.7 billion, the highest amount ever sought by a New York condominium.

Extell Development is closer to erecting an 88-story tower at 225 West 57th Street after the Landmarks Preservation Commission approved partial demolition of the BF Goodrich building (1780 Broadway).
The panel's decision allows Extell to perform excavation and foundation work for the development. The building will have 220 apartments, a hotel and a Nordstrom department store at ground level.

A New York State Supreme Court judge has dismissed one of several lawsuits aiming to block New York University from its 1.9 million-square-foot Downtown expansion. The suit was filed by a group of tenants at Washington Square Village, a residential building which borders the site of new NYU towers, claiming that the development would adversely alter the area. NYU's expansion plan received approval from the City Council this summer with a 44-to-1 vote.

Councilman Daniel Garodnick wants to see more housing in the Midtown East, to offset all the business development, and is asking the city to study his idea. Garodnick, who has the power to hold up the rezoning, sent a letter Wednesday to Deputy Mayor Robert Steel yesterday laying out his position and calling on the city to consider changes to the proposal during the public review process. The changes include easing restrictions on landmark buildings that want to sell air rights, requiring an additional permit for hotel construction and ensuring funding is provided for infrastructure upgrades before development takes place.

Right now, Bloomberg wants about a dozen large buildings to be built around Grand Central, increasing building size by as much as 60 percent in some instances. Those developers of bigger buildings would be required to fund infrastructure improvements, which over the next 20 years could add up to $750 million.

St. Patrick's Cathedral, St. Bartholomew's and Central Synagogue between them have just over 2 million square feet of unused development "air rights," which could be worth anywhere from $400 million to $1.1 billion If the city's Midtown East rezoning proposal are approved

Hudson Companies is tapping HOK Architects to design the new $225 million Urban League Empowerment Center in Harlem. Governor Andrew Cuomo and Mayor Michael Bloomberg unveiled plans to transform the current 42,000-square-foot property into a 400,000-square-foot complex.

The center, located on 125th Street between Adam Clayton Powell Jr. Boulevard and Lenox Avenue, will serve as the 75,000-square-foot national headquarters for the National Urban League, a civil rights group. It will also feature a civil rights museum, as well as 114 units of affordable housing, retail space, a 225-car parking garage and a 45,000- to 50,000-square-foot conference center. The project is scheduled to break ground in 2015.

A partnership between David Werner and Deutsche Asset & Wealth Management's real estate investment business has bought the leased fee interest in the Milford Hotel in Times Square for about $325 million. The sellers, Rockpoint Group and hotel operator Highgate, bought the entire property in 2010 for about $200 million. They are planning on selling the remaining two pieces of the property -- a retail condominium and the 1,300-room hotel separately.

The federal government will cover the full cost of four rebuilding projects along the New York City and Long Island coast that were damaged by Hurricane Sandy.

Dumbo could soon see a massive new retail center along Jay Street, after last month's $25 million {dynamic_word4} of a block-wide warehouse to Silverstone Property Group. The nearly football field-sized building, located between Water and Plymouth streets in Dumbo's historic district, is perfect for a major commercial development.

The Brooklyn Navy Yard's biggest building, a 16-story former ammunition depot with two-foot-thick walls, will undergo an $80 million transformation to house a high-tech company. Building 77, essentially abandoned, has a 1 million-square-foot interior; nearly a quarter of the space, 240,000 square feet, will be occupied by Shiel Medical Laboratory.

A partnership headed by SL Green Realty claims it is in danger of being evicted from its ground lease at a distressed Times Square retail property at 1604 Broadway if it does not work out a deal with its lender. Farmore Realty. The owner of the land beneath the building, initiated a summary nonpayment and eviction proceeding against the partnership in civil court in December 2012. The action came after SL Green missed a series of lease payments on the land lease, following a December decision from their lender to cease payment of protective advances to fund the ground rent and protect the collateral.

Vornado said it was abandoning its longtime plan to replace the Hotel Pennsylvania in Manhattan with an office tower. The company, has finalized its plan to invest in an upgrade of the downtrodden hotel across from Madison Square Garden. The move is likely to involve bringing in a new operator and partner.

The City of New York is prepping for a 27-inch water level rise by 2050. As a result, buildings will need to plan for entrances to commercial buildings that sit at least that high.

Herald Center, between Manhattan Mall and Macy's in Herald Square, is about to get a $50 million face lift. Owner JEMB Realty plans to replace the building's black-tinted windows with transparent ones and put LED lighting panels on the top floors. The development company bought the structure out of bankruptcy in the late 1980s.

As non-profit organizations continue to struggle, many are liquidating real estate assets. The latest is 210 West 77th Street, which the Jewish Board of Family and Children's Services is offering. The building, between Broadway and Amsterdam Avenue, is currently a parking garage, but could accommodate a building 185 feet tall, and up to 100,000 square feet. The site could fetch as much as $45 million.

Some $19 billion worth of CMBS were issued in the first two months of 2013, roughly four times the volume that was issued in the first quarter of 2012, in an encouraging sign for a market that saw record delinquency rates in 2012. The CMBS market is a key driver of sales, especially in New York, where we have these larger trophy-assets.

Real estate investor Urban Century Group has {dynamic_word3} the ground lease at a Murray Hill mixed-use building for $12.5 million from alleged slumlord Bahram Hakakian, city records filed today show.

The deal for 22 East 36th Street, a 10-story, 60,300-square-foot building located just off Madison Avenue, closed on March 14. The property has 51,300 square feet of residential space and 9,000 square feet of office space.
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