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January 2008

January 2008 » Market Analysis » NY New Developments

January 2008 New York New Developments

New Developments

New Construction Brooklyn
At 75 Flatbush Avenue, a permit to build a 21-story, 108-unit new Flatiron has been issued. The 150,000-square-foot building, which is going up Extension will be 262 feet tall.

Developers of the Domino Sugar Refinery, a historic landmark, will be part of an ambitious $1.2 billion, 10-year residential development project.

Major Market News
Columbia Expansion Approved.
The City Council voted to rezone a 35-acre section of Harlem, allowing Columbia University's $7 billion expansion. Columbia plans to expand onto 17 of the rezoned acres, bounded by Broadway, Riverside Drive, West 129th Street and West 133rd Street.

The Federal Reserve's proposal to curb high-interest lending comes too late for many New Jersey families. About one-fifth of sub-prime mortgage borrowers who took out loans in 2005 and 2006 will lose their homes to foreclosure.

Plans to expand the Jacob K. Javits Convention Center have been scaled back to a renovation and a modest addition to the West Side facility. The Empire State Development Corporation is considering smaller-scale alternatives, including an expansion of about 100,000 square feet. More than half of the $1.6 billion set aside in funding will go toward renovations and repairs.

The City University of New York will pay developer Bruce Ratner $307 million to build an 11 to 14-story City Tech classroom building in Downtown Brooklyn.

Australian real estate company Centro Properties Group, the fifth-largest shopping center owner in the U.S., saw shares drop by 90 percent in the last two days. Slips by office and retail landowners hint that the credit crunch may soon hit the country's commercial market as hard as it did the housing market.

According to a survey by London's Independent newspaper, New York City is the location of the most headquarters for global corporations. The report also put New York in second place as the world's "capital city," behind London in terms of financial markets and entertainment.

Europeans are on shopping sprees in New York City buying more than holiday gifts. They are taking advantage of the weak dollar by buying apartments. The number of foreign buyers has doubled in two years and they have bought one-third of all new condos in the last 18 months.

Developers are moving ahead with 5-15 West 125th Street off Fifth Avenue; 2296 Frederick Douglass Boulevard between 123rd and 124th streets; and 233-237 West 125th Street, the old Victoria Theatre at Seventh Avenue. Reisman Properties are building the hotel at 5-15 West 125th Street, and there is no meaningful lodging facility to accommodate them.

250 W. 55th Street, an office tower, built by Boston Properties on Eighth Avenue between 54th and 55th streets could be built over an existing tenement at 261 West 54th Street side of the project

Brookfield Properties Corp. is regarded as a formidable office landlord, but winning the bid to build the massive Hudson Yards project would confer instant credibility to the upstart developer. Hudson Yards would add a 12 million-square-foot development site to its portfolio of 16 million square feet. It could also add as much as 40 percent, or about $400 million, to its operating profit. Brookfield does not have an anchor tenant in place and is seen as a long shot.

Retail rents in Manhattan average $133 per square foot, up 26 percent from $106 per square foot last year. Downtown, average rents have eclipsed $100 for the first time, increasing 18 percent this year to $109 per square foot. The biggest spike was on Broadway in the Times Square area, where ground-floor rents surged 107 percent to an average of $797 per square foot. Rents average $1,108 on Madison Avenue and $1,250 on Fifth Avenue.

The Port Authority was expected to approve to bring the Westfield Group, a shopping center operator, back to the World Trade Center. Where Westfield will invest more than $600 million and receive a 50 percent stake in 490,000 square feet of retail space above ground and in the two-story concourses connecting to subway and PATH lines.

Tishman Asset Corporation wants to build a 22-story, 333,000-square-foot hotel at the now demolished Playpen Theater at 693 Eighth Avenue. They want to include putting up a small residential building nearby. Tishman purchased the five lots, including the Playpen, for $128 million in July.

It has become increasingly clear that the national housing picture has turned much more gory than anyone might have imagined; likewise, repeated forecasts that a meaningful housing rebound will kick off by mid-2008 appear to have little or no legitimacy.
Some housing industry experts suggest the implications are ominous, that the worsening housing slump will accelerate the likelihood of a recession.

Housing is in a deepening recession that has at least another two to four years to run; it's also in the midst of a serious readjustment of prices." the readjustment will eventually see prices of single-family homes plummet 10% to 20% and condominiums tumble 20% to 40%. "The picture is getting darker and darker by the day.

Wyndham plans at least four full-service, upscale hotels. Wyndham Hotels and Resorts, is opening a hotel in Chelsea at 119-121 West 24th Street, in February and another is opening at 20 Maiden Lane two months later . Three months after that, 341 West 36th Street will open and eight months later, in March 2009, a fourth hotel at 93 Bowery.
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