December 2023 » Market Analysis » NY New Developments

December 2023 New York New Developments

Major Developments:

The U.S. Immigration Fund of a 22-acre megaproject that was supposed to deliver more than 3,000 units of housing in Brooklyn is at risk of losing control of several still-unbuilt development sites. to foreclose on six sites owned by Greenland USA.

Steve Cohen details his Queens casino plan dba Metropolitan Park would be an 8 billion project near Citi Field and spread over 50 acres of parking lots surrounding Citi Field, home to the Mets. Hard Rock International is partnering with Cohen on the project. Cohen’s plan includes a hotel, music venue, food hall and 20 acres of public park, including a connection between Flushing Meadows Corona Park and the Flushing Bay waterfront. Cohen’s casino has to resolve the parking lots which is technically parkland, state legislature approval is needed. The local state senator, who by custom must approve parkland alienation, has been reluctant to do that.

Weill Cornell Medicine is leasing 200,000 square feet in Sotheby's headquarters at 1334 York Avenue. The five floors will include a split between dry lab space for computational research and a wet lab space for drug, chemical and biological research. There will also be conference rooms and workspaces.

United American approved by the Landmarks Commission to add 100 new apartments, 10 stories and 100 apartments to the three-story Oltarsh Building at 277 Canal Street. The project is the first affordable housing development to result from Bill de Blasio’s rezoning of the downtown neighborhood in 2021. A quarter of the building’s residential units will be income-restricted. The ground floor will remain retail.

HAP Investments filed a bankruptcy petition to protect a Washington Heights project. It’s not clear why the mixed-use development at 4452 Broadway needs protection, but evidence shows it fell years behind schedule. The petition lists assets and liabilities between $10 million and $50 million.

Valley Bank can foreclose on a $120 million loan for Fortis Property Group’s Seaport Residences, a luxury condo tower that has sat unfinished and exposed to the elements for three years. A Judge granted the bank’s motion for summary judgment at 161 Maiden Lane, allowing the bank to move forward with its foreclosure on the loan, of which $90 million has been funded. Whether the tower can be salvaged is not certain, an engineer estimated that it would cost $106 million to complete it.

The New York City real estate landscape is murky at best. Valuations are in flux and uncertainty reigns. Deals are down. As a result, buyers and sellers have fewer comparable sales to look at when gauging value. There are other metrics for appraisers, lenders and investors: occupancy, rent growth and cash flow but those statistics don’t take the future into account.

Signature’s rent-stabilized loans draw anemic interest. FDIC rule disqualifies prospective bidders; others fear “toxic waste.” Bidding on the $33 billion of Signature Bank’s commercial real estate loans has ended and winners may be chosen soon.

$15 billion in loans on New York’s deteriorating rent-stabilized housing might not sell this round. The FDIC broke the failed bank’s debt into 14 pools. Investors could bid on a minority stake in the debt, but the FDIC would maintain majority ownership.

Three of the pools held Signature’s commercial real estate debt: office and retail properties, hotels and market-rate apartment buildings. Two pools were open to bank bidders only, and nine contained the rent-stabilized loan book.

The South Bronx Overall Economic Development Corp., has renewed its 138K SF lease with the City of New York for an industrial storage property in the Bronx, 131 Walnut Ave., SoBro has rented the city-owned property since 1982 and is on the hook to pay $1.25M in back rent when it signs the new lease, covering the building’s real estate taxes and additional rent, in addition to a base annual rent of $714K that will increase by 3.5% every two years.

There were more than 16,000 residential completions in the first half of the year based on foundation permits. The city is on track to start construction on fewer than 10,000 housing units this year. That is the highest first-half number since at least 2010. If completions continue at that pace, the year’s number of finished units would be the most since 1965.

Vanbarton to convert 100,000 sf at 980 Sixth Avenue and will convert about 90,000 square feet of office space at its 980 Sixth Avenue mixed-use tower into rentals. The space will soon be turned into about 100 apartments.

Madison Realty Capital and Cottonwood Group have lent $180 million to Boris Kuzinez’s Five Points Development. The 56-story tower at 262 Fifth Avenue applied to create 18 more parking spots than the five allowed by zoning.

The lawsuit Durst filed against the MTA was settled. The suit claimed the MTA kept flip-flopping on its needs regarding the trio of parcels, which Durst acquired for $126 million as East Harlem was being rezoned. The MTA ultimately seized the sites at 1801 and 1815 Park Avenue from Durst using eminent domain, paying the developer $40.7 million. Durst claimed in the lawsuit that the deal was “coerced.”

Distressed opportunities are increasing in New York City’s commercial market, but investors lacking the cash to jump take advantage, may be sidelined by high interest rates and a liquidity crunch.

The 2nd District Judicial Court appointed the receiver to protect the collateral backing the debt.

The three-story, 129,000-square-foot mixed-use building is one of the largest such properties in Brooklyn, south of Prospect Park. The building includes 82,000 square feet of office space and 47,000 square feet of retail space.

P.S. 64 605 East Ninth Street. There were no bids outside of a $55 million credit bid from its lender 605 East 9th Community Holdings. Madison initiated a foreclosure in 2018, alleging Singer failed to make mortgage payments. To stave off foreclosure, Singer put the five-story, 152,000-square-foot property into bankruptcy.

Signature Bank loans could sell 40% below face value. Bids due on $33 billion commercial loan.

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