New DevelopmentsThree years after the Related Cos. began developing its 26-acre Hudson Yards project, the company is now trying to find a tenant willing to commit to occupying at least 600,000 square feet of office space. To land its key tenant, Related is offering either to construct a building and sell it to that company or to provide a big break on the rent. The 12 million-square-foot space, bordered by the High Line and the Hudson River, will run from 10th to 12th avenues and from West 30th to 33rd streets. The $15 billion project is expected to take as long as 15 years to complete, and will include three office buildings, nine residential towers with a total of 5,000 apartments, a mall, a school, a cultural center and 12 acres of open space.
Panasonic's North America unit is looking to move from New Jersey to Downtown Brooklyn despite the promise of over $100 million in tax credits if the company were to stay within the state. Among the locations on its lookout are MetroTech Center and Atlantic Yards. Panasonic, whose U.S. operations are currently headquartered in Secaucus, was approved for up to $102.4 million in tax breaks by the New Jersey Economic Development Authority if it relocates to Newark instead of New York City.
The state's education commissioner rejected a poorly-performing East Village charter school's appeal to stay open after the city's Department of Education announced that it would not renew its charter for next year. The Ross Global Academy, which was founded by Courtney Sale Ross, widow of the former Time Warner chairman Steven Ross, has been up for closure five times before. Nonetheless, the academy had claimed that the city's decision to shutter it was linked to favoritism towards Girls Prep, a charter school that was slated to take over its space, at 420 East 12th Street, on the corner of Avenue A.
Star Financial, the battered, Manhattan-based commercial property lender that's been attempting to stave off a bankruptcy filing in recent years, may actually succeed. The company has already managed to unload several assets at decent prices and as a result, has slashed its debt level by $3.7 billion over the past 12 months. IStar, whose shares have bounced back from below $1 last February to $8.20, still has to refinance $2.2 billion in debt that's due in June, however that will be no small feat.
Clothier Michael Kors has signed a 10-year lease for a 4,500-square-foot storefront at Rockefeller Center. The location, at 610 Fifth Avenue on the corner of 49th Street, once housed a Kenneth Cole location and includes 3,000 square feet of underground storage and office space. Although it was not immediately clear what Michael Kors will pay for the space, asking rents in the area range from $2,100 to $2,500 per square foot.
The Architecture Billings Index rose by 2.2 points last month, indicating a continued recovery trend in the struggling U.S. construction and design industry. The ABI, which is considered a strong economic indicator of future construction activity, hit its highest level since 2007 last month and has risen in three of the past four months. December's index reading was up to 54.2 from 52 in November, on a scale in which any score above 50 represents an increase in billings for design work.
Bank of America reported a $1.6 billion loss in the fourth quarter after its costs related to bad home loans increased. The loss available to shareholders after paying out dividends was 16 cents per share, though analysts had predicted the bank would earn 18 cents a share. The bank reported revenue of $22.4 billion for the quarter, compared to $25.1 billion in the previous quarter.
Hotelier Ian Schrager may be having second thoughts about passing up the chance to own the storied Hotel Chelsea. He mentioned that he didn't see enough potential in the site, even though it's a sexy asset with an incredibly sexy history and felt obliged to take a look at it. Schrager was spotted touring the 250-room landmark and that he has even put in a bid. The Standard hotel owner Andre Balazs was also seen touring the property, at 222 West 23rd Street. There have so far been at least five or six bids on the Chelsea, which is said to be asking close to $100 million.
Shuttered Central Park landmark Tavern on the Green may reopen under the direction of New York real estate mogul Donald Trump, who wants to turn it into a high grossing restaurant. Trump has reached an agreement with Peter Ward, head of the union that represented the workers there, to revive the restaurant, which closed at the end of 2009 after the LeRoy family that operated it declared bankruptcy. The city had granted Central Park Boathouse operator Dean Poll the operating license, but Poll was never able to come to terms with the union.
More details have emerged about the hotel Extell Development is planning at 30 West 46th Street, in Times Square. The property is to be a Cambria Suites-branded, 194-room hotel and will break ground this summer. Choice Hotels owns the brand and is contributing equity and financing for the development. The project, along with another new Cambria Suites planned for 123-125 West 28th Street in Chelsea, marks the brand's New York City debut. The 140-room Chelsea hotel is being developed by Robert Chun's We Care Trading, the first hotel for the company. Both hotels are slated to open in early 2013.
The Kimpton line of hotels is planning a major New York City expansion with 10 new hotels on the docket. The brand has four outposts in the area, including Ink48 on the corner of 48th Street and 11th Avenue and the Eventi on Sixth Avenue between 30th and 31st streets. Although Kimpton did not provide specifics about its planned hotels, it did say that it's targeting Chelsea, Tribeca and the Meatpacking District, in particular.
Brooklyn College is set to open its Graduate School of Cinema in the Brooklyn Navy Yard beginning in the fall semester of 2013. The school, which will operate inside Steiner Studios' production lot, will be the first in the country to be incorporated into a professional movie studio. The school, which will offer nine different degree programs, is expected to include around 275 students on two floors of 25 Washington Avenue, a seven-story building in the yards.
State utility regulators approved the installation of a new $1.4 billion power plant in Queens. NRG Energy, which supplies Consolidated Edison and other utility companies with electricity, will build a generator on the site of its existing plant, which is within the 600-acre Con Ed property on the northern edge of Astoria. NRG will shut down its existing generators on the site, which were installed in 1969 and put out 600 megawatts of power.
Two new hotels and a retail complex are due to come to Times Square, between Sixth Avenue and Broadway, the space formerly occupied by Pop-Tarts World and Charmin Restrooms. A new 250- to 300-room hotel is set to open in 2013 in the now-vacant lot at 136 West 42nd Street, worth from $112.5 to $135 million. Highgate Holdings is expected to operate the hotel. The property will likely rise 30 stories and could become a Hilton.
Hotel owner DiamondRock Hospitality is to purchase a partially completed hotel on West 42nd Street in Times Square. The site, which is being developed by Highgate Hotels Holdings, may be sold for between $112.5 million and $135 million. The final purchase price will be determined by the number of rooms the hotel is given approval to construct. It is currently slated to include 250 to 300 rooms, but could have as many as 400. Construction is expected to be complete in roughly two years, with a 2013 opening expected.
Two loans backing 16 buildings in the Bush Terminal near the waterfront in Sunset Park, Brooklyn, have been transferred to special servicers following a default by the owners. The loans, one for $250 million and the other for $50 million, were originated by Goldman Sachs in September 2007 with a maturity date of September 2017. The master servicers are Wells Fargo and Midland Loan Services, and LNR Partners is the special servicer.
Local officials and residents are riled over a plan to operate an elite public school set to open inside a crumbling educational facility in Park Slope, which houses three existing troubled high schools. The school, Millennium Brooklyn, has raised hackles in the community, inciting claims of racism and discrimination against the schools inside the John Jay High School building. Among the biggest complaints opponents have is an allotted $35,000 in extra funding to Millennium for computers and other equipment.
MB Financial Bank is moving forward with plans to foreclose on No. 22 Renwick, a new boutique condominium in Soho. The bank assumed the $19 million mortgage on the 12-story building at 22 Renwick Street, between Spring and Canal streets. According to the filing, the developers of the project, Orange Management and Helix Partners, owe MB Financial at least $21.7 million in loans, interest, late charges and other fees. The developers were sent a notice of default on the loan in May 2010.
Murray Hill Properties has defaulted on its loan at 1180 Sixth Avenue and has seeked investment bank the Carlton Group to help save its investment. The mezzanine debt on the 400,000-square-foot property is currently owned by Shorenstein Properties, who has said it may foreclose. Carlton's chairman may be looking for about $245 million. Murray Hill purchased the 23-story tower, between 46th and 47th streets, in 2007 for $300 million.
Fordham University has broken ground on its new School of Law and residence hall. The 22-story building, a $250 million development on 62nd Street between Amsterdam and Columbus avenues, will house the university's law school on the bottom nine floors, including classrooms, a trial court facility and a 562,000-volume law library. The remaining floors inside the 468,000-square-foot building will be used as dorms for up to 430 undergraduate students.
The $81 million Pinnacle Award-nominated renovation of 112 West 34th Street by father-and-son development duo Peter and Anthony Malkin may have won critical acclaim, but it wasn't actually legal. In a new lawsuit, Cohen alleges that the Malkins' W&H Properties, which has a 115-year lease on the property dating back to 1963, never got permission to make structural changes, as required by the terms of their agreement. As a result, Cohen is seeking to oust the Malkins and terminate their $840,000-a-year lease
Black Entertainment Television founder Robert Johnson's development company has picked up its third New York City hotel in three years, with the purchase of the Doubletree Metropolitan Hotel in Midtown for $335 million. The 755-room, Morris Lapidus-designed property, originally built as the Summit hotel by the Tisch family in 1961, last traded for $110.5 million in 2003. The seller group, which consists of Highgate Holdings, Goldman Sachs' Whitehall Real Estate Funds and Rockwood Capital, had put $35 million into renovations since then.
Sunstone Hotel Investors, owner of the Hilton Times Square and 31 other hotel properties nationwide, is planning a $1 billion acquisition spree of large, high-end properties in major cities for 2011. The real estate investment trust has had to unload 10 hotels whose mortgages were underwater over the past two years, but is now aggressively trying to get back in the game under new leadership. Among the company's first purchases of the year will be the remaining 62 percent stake in the Doubletree Guest Suites Times Square, for which it will pay $37.5 million.
Developer Patrick Thompson is expecting community board approval for his $160 million conversion of Flushing's long-shuttered RKO Keith's Theatre and could finish the project by 2013 if he's allowed to break ground this year. Thompson, who picked up the landmark for $20 million last year after Shaya Boymelgreen lost it in a foreclosure, plans to turn the 389,000-square-foot property into a mixed-use complex with 357 market-rate rental apartments, retail, parking and a senior center.
A Morgan Stanley portfolio of eight high-end CNL Hotels & Resorts properties has been seized by a group of lenders in a $600 million debt restructuring deal. The lenders had originally ponied up $1.5 billion in senior debt, $1 billion in mezzanine debt and another $800 million in corporate debt to help finance Morgan Stanley's $6.7 billion acquisition of the resorts in 2007. But Morgan Stanley has since been struggling with the health of boom-time real estate acquisitions, having racked up $4.4 billion in such losses in 2008 and 2009.
In a sign that the credit markets are loosening, two developers have secured $135 million of state-backed construction loans. Two Trees Management has closed on a $77 million loan to finance its Clinton Park residential and commercial project at 770 Eleventh Avenue in Hell's Kitchen, the Brooklyn-based company's first development in Manhattan, and it’s largest, at 1.2 million square feet. Landlords Savanna and Monday Properties closed a $58 million loan from private investor PCCP to fund a renovation at 386 Park Avenue South, a 20-story art deco office building in Midtown South.
Li & Fung, a Hong Kong-based trading company, signed a lease for 490,000 square feet in the Empire State Building, the largest deal of the New Year and one which would have also topped last year's list. The deal comes after months of negotiation between the landlord and tenant. The lease includes several floors in the base of the building, which has asking rents ranging from the mid-$40s a square foot to the high $50s.
The Marriott Central Park, a 716-foot, 634-room hotel planned for Broadway and 54th Street, is in line to become New York City's tallest hotel. Though the Mandarin Oriental inside the Time Warner Center is technically taller, it's not only a hotel, but a mixed-use project with apartments, offices and a mall. The new Marriott is comprised of a 30-story Marriott Residence Inn set atop a 24-story Marriott Courtyard built over a 20,000-square-foot retail pedestal. At the very top of the building is a three-story circular restaurant.
Seattle-based Tommy Bahama, an 89-store island-themed purveyor of lifestyle goods is coming to Fifth Avenue and 45th Street. The chain recently signed a 12-year, 8,500-square-foot lease for retail space, formerly occupied by New York Look, at 551 Fifth Avenue.
A new rental development at 500 West 23rd Street has celebrated its topping off. Equity Group chairman Sam Zell purchased the building site from from developer Shaya Boymelgreen a year ago after construction stalled. It was not immediately clear how much Zell paid for the project, which sits near 10th Avenue, adjacent to the High Line. Although the rental prices have not yet been determined, it will offer studio units, along with one-, two- and three-bedroom homes.
U.S. commercial property prices saw their third straight monthly increase in November, up 0.6 percent over their level in October, and 2.8 percent over their level in November 2009. Since the eight-year nationwide low of August 2009, prices have climbed by a total of 8.4 percent, aided by the addition of 1.1 million jobs last year, which helped boost demand for office properties. Still, prices are 42 percent below their October 2007 high.
Accounting firm Deloitte has signed an 18-year lease for 12 floors with a total of around 430,000 square feet at 30 Rockefeller Center. The deal , the largest of 2011 so far and only slightly smaller than the largest office lease of 2010, brings an end to more than a year of intense speculation about the firm's real estate search, and included high-profile buildings like 11 Times Square, 4 World Trade Center and 4 World Financial Center.
Commercial real estate investors may still feel some pain in 2011. Nationwide, the rate of commercial mortgage-backed securities loans that are 30 or more days delinquent climbed to 9.2 percent in December, the highest ever recorded. The rocky nationwide delinquency rate was an indication of a rough road ahead in the commercial market. The December delinquency rate underscored that there still may be some nasty surprises in store even as the market shows some signs of healing.
Even a quarter's worth of foreclosure freezes was not enough to stave off yet another record year for U.S. foreclosure filings as the nation continues to grapple with a spate of homeowners who can't keep up with their mortgage payments. Nearly 2.9 million U.S. homes, or 2.23 percent, were hit with default notices, scheduled auctions or bank repossessions during 2010, up 2 percent from 2009 and 23 percent from 2008. That figure would have easily exceeded 3 million had it not been for the fourth-quarter drop in foreclosure activity, triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings.
Occupancies and room rates in New York's hotels have increased which have helped spur an increase in deal activity and values. Only two lodgings were sold in 2009, there were 13 deals made in 2010, worth $1.4 billion. Three deals worth a total of $651.5 million took place in the fourth quarter. Hotel prices on a price-per-room basis declined to $407,286 in 2009 from $586,544 in 2006.
Crumbs, the country's largest cupcake chain, could soon have over 50 locations in New York City. The store, which also sells coffee and other baked goods, is looking for new locations on the Upper East Side, in Chelsea, the West Village and around Lincoln Center. A Times Square store is already underway. Crumbs is also planning to expand in Park Slope, Brooklyn and Forest Hills, Queens.