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December 2013

December 2013 » Market Analysis » NY New Developments

December 2013: New York City New Developments

New York City New Developments

The state Public Authorities Control Board gave unanimous approval to the Empire State Development Corporation's $225 million National Urban League complex in Harlem. The project will include a civil rights museum, affordable housing and commercial space. Construction at 125th Street site will begin after the expiration of tenants' leases in 2015. The businesses currently occupying the site can apply for a low-interest loan for relocation services. However, lawsuits may still delay the complex.

The Metropolitan Transportation Authority is looking to increase revenue by increasing the number of retail stores at subway stations and converting small spaces space into pop-up stores. L'Oreal, for example, opened a 7-by-14 foot kiosk at the Bryant Park subway station, where commuters can buy cosmetics from vending machines. Retailer Uniqlo just recently launched a 174-square-foot pop-up store in the Union Square station.

In the final month of the Bloomberg years, developers with projects in the planning stages are pulling out all the stops to tick off as many steps in the approval process. This is often easier said than done, especially as the current administration races to complete its own development agenda. Accelerating the quest for approvals provides a badly needed sense of security for developers.

A Singaporean wealth fund is contributing $400 million to the Related Companies-led $1.3 billion purchase of Time Warner's headquarters in the Time Warner Center.

Macy's is rumored to be going uptown to a 400,000-square-foot complex on 125th Street being built by the Empire State Development Corp. The retail mega giant, though, has not announced plans for a store in Harlem and others contend the location has been tapped as the headquarters of the Urban League.

Hedge fund Moore Capital Management is close to signing for 80,000 square feet at 11 Times Square, includeing the penthouse office on the 40th floor and a private squash court. Rents at 1251 Sixth Avenue in Times Square, are $90 per square foot and up.

A Spanish-language media giant has expanded its presence at the 605 Third Avenue office tower to just under 195,000 square feet.

Grace's Marketplace is moving to 215 East 68th Street, a 608-unit rental building owned by Rudin Management. For 30 years they had been located at 1237 Third Avenue. The 15-year lease is for a total of 13,125 square feet on the ground floor and lower level, nearly twice the size of the old 7,000-square-foot space. The ground floor is 7,742 square feet, and the lower level is 5,383.

The Friedman Group and Landis Group's planned pod hotel at 400 West 42nd Street will rise 25 stories. The project will total 170,122 square feet. Retail will occupy the first and second stories, with a residential sky lobby with outdoor space and 527 pod-style hotel rooms above.

Boutique hotel brand King & Grove has just acquired the remaining 50 percent stake in an Astor Place hotel project from former the Chetrit Group in a deal that values the property at almost $96.6 million.

Friedland Properties is planning to build a 20-story mixed-use building at 2234 Broadway and replace a two-story commercial property. Friedland has requested a demolition permit for 2228-2236 Broadway. The tower planned for the site will include commercial space and luxury apartments. The retail portion will cover two floors above ground and two floors below. The residential units will be either rentals or condominiums and most will have balconies.

Macy's flagship store on 34th Street will get a $400 million makeover. The four-year renovation project will be completed in 2015 and will add 100,000 square feet of retail space to the store, bringing the total retail space in the store to 1.2 million square feet.

Boston Properties is in talks to lease nearly 275,000 square feet of its new office tower on Eighth Avenue to Al Jazeera, and Soros Fund Management, the investment firm of billionaire George Soros. Al Jazeera wants up to 200,000 square feet at 250 West 55th Street; Soros is looking for 75,000 square feet at the top of the 38-story building.

DelShah Capital has increased its efforts to gain control of the Flatiron Hotel. The firm, which owns the debt on the property, is seeking a court order forcing the owners and property manager to pay it rent directly, as well as hand over a bevy of documents necessary to operate the property. An affiliate of DelShah, led by CEO Michael Shah, originally sued the owners of the hotel at 1141 Broadway in New York State Supreme Court.

Vornado Realty Trust is moving ahead with plans to reposition and renovate its Hotel Pennsylvania in Midtown, and intends to spend up to $300 million on the project.

Architect Ariel Aufgang is designing another project in the Hudson Yards area with a 187-unit building at 411 West 35th Street. The 12-story, 178,405-square-foot property will have 908 square feet of community facility space, 14,586 square feet of commercial and 162,911 square feet of residential space, as well as underground parking, bike storage and a recreation room.

A trio of developers rehabilitating the Empire Stores, the Civil War-era warehouse building in Dumbo, are asking $90 per square foot for roof-top office space, a record for the borough.

Silverstein Properties and Loeb Partners Realty affiliates secured $85 million in financing for their office tower at 529 Fifth Avenue.

Beacon Capital Partners and Paramount Group are close to a 20-year renewal for a law firm at Paramount Plaza. The law firm has 225,000-square-foot space at 1633 Broadway, between West 50th and West 51st streets. The law firm plans to reduce its space by 25,000 square feet among the 20th through 24th floors. Asking rents at the space start in the $70s per square foot.

Three New York City real estate players are in talks with U.K.-based InterContinental Hotels Group to develop a 25-story, 250-room hotel in Midtown West as a Crowne Plaza on a 8,145-square-foot lot at 320 West 36th Street that currently holds a two-story parking garage.

The luxury retailer Hermes just signed a 10-year extension on its 30,000-square-foot lease at 691 Madison Avenue at a cost of more than $1,700 per square foot, making its rent the highest on the street.
Seven of the 25 largest business improvement districts in the city will see a windfall in next year's budget, with a 21 percent year-over-year median gain in budgets across all BIDs. The annual assessment for the Alliance for Downtown New York, for example, grew 21 percent to $15.8 million this year, due to an influx of local businesses. About 400 new stores are slated for the neighborhood by 2016, many of them at Brookfield Place and Pier 17.
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