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July 2018

July 2018 » Market Analysis » NY New Developments

July 2018 New York New Developments

New York Major Developments:

The top 10 office lease deals totaled 2.4 million square feet, larger than last month’s top 10 leases, which totaled 1.9 million square feet.

1) Deutsche Bank signed a lease for 1,100,000 square feet of office space at 1 Columbus Circle.
2) Facebook signed a lease for 370,000 square feet of office space at 770 Broadway.
3) McKinsey & Co. signed a lease for 186,000 square feet of office space at 3 World Trade Center.
4) Blank Rome signed a lease for 138,000 square feet at 1271 Sixth Avenue. The firm is taking the 15th, 16th and 17th floors of the 48-story building.
5) McGraw-Hill Education signed a lease for 136,000 square feet at 1325 Sixth Avenue.
6) First Republic Bank, signed a lease for 130,000 square feet of space at 10 Rockefeller Plaza. The firm is taking the 3rd and 4th floors of the building, with asking rent of $170 per square foot.
7) WeWork signed a lease for 100,000 square feet at 214 West 29th Street. The firm is taking the 2nd through 8th floors of the building.
8) Montefiore Health System signed a lease for 96,500 square feet at 1250 Waters Place.
9) National Debt Relief signed a lease for 95,000 square feet of office space at 180 Maiden Lane.
10) Kroll Bond Rating Agency signed a sublease for 95,000 square feet of office space at 805 Third Avenue. The company is taking the 26th, 27th, 28th and 29th floors of the 29-story building.

The 10 biggest retail lease deals signed last month totaled just over 165,000 square feet, down from last month’s total of over 310,000 square feet.
1) Puma signed a 15-year lease for 24,000 square feet of retail space at 609 Fifth Avenue.
2) Target signed a lease for 21,000 square feet at 520 Second Avenue.
3) Aqua Restaurant Group signed a lease for 18,750 square feet of retail space at 731 Lexington Avenue.
4) City Fresh Market signed a 30-year lease for 16,175 square feet of retail space at 608 Franklin Avenue.
5) Joel Robuchon signed a lease for a 14,500 square foot restaurant over two stories at 100 East 53rd Street.
6) Feld Entertainment signed a lease for 12,000 square feet of retail space at 218 West 57th Street.
7) Chick-fil-A, the restaurant chain, signed a lease for 12,000 square feet of retail space at 711 Lexington Avenue.
8) Coty, the beauty product maker, inked a 10-year lease for 10,040 square feet of retail space at 719 Seventh Avenue.
9) German School Manhattan signed a lease for 10,000 square feet of retail space at 74 Warren Street.
10) Restoration Hardware signed a lease for a 10,000 square foot outlet store at 34 34th Street.

Hospital for Special Surgery is leasing 15,000 square feet at 35 Hudson Yards. It will be an outpatient facility.

Sheldon Solow wants to build a 54-story hotel and condominium on West 57th Street, but can’t until the last retail tenant gets out, Metropolitan Fine Arts & Antiques.

The Related Companies is looking for a $1 billion, low-interest loan for the next phase of Hudson Yards from the same pool of money that the Gateway project has struggled to tap into. New York University signed a 32-year lease extension at 105 East 17th Street. The deal is for the entire 125,000-square-foot building. NYU first moved into the four-story property in 2012, after signing a seven-year sublease.

Just Baked, a Polish bakery chain, is being rebranded for the U.S. market and has signed two Manhattan leases, ahead of its plan to open 50 stores in New York. The two bakeries are to open in a 1,400-square-foot store at 88 West Broadway and Westfield’s Oculus downtown.

Milstein Properties unveiled its plans for a $100 million renovation of its office tower at 335 Madison Avenue. Around 250,000 square feet will be set aside for 100 to 200 startups, some will pay subsidized rent, and 700,000 square feet will be available to larger tenants. Retail and amenities include: a library, a bar, a terrace overlooking Grand Central and a gym with a pool that will take up another 150,000 square feet.

Normandy Real Estate Partners wants to refinance three of their office buildings that it plans to overhaul. The real estate investment firm is seeking $250 million for a two-building, 610,000-square-foot Financial District complex at 80 and 90 Maiden Lane and $187 million for a 140,000-square-foot Greenwich Village property at 797-799 Broadway.

The Department of City Planning kicked off the months-long process to change zoning rules in the Garment District. The agency certified a text amendment that will lift a 1987 zoning restriction in certain parts of the area. The latest plan allows owners of buildings on certain side streets to convert their spaces to office use without having to preserve manufacturing space, as was required under the 1987 zoning rule.

Pebblebrook Hotel Trust is increasing its offer in an effort to block the Blackstone Group‘s prospective $4.8 billion acquisition of LaSalle Hotel Properties. Pebblebrook announced a purchase price of $37.80 per share, up from its previous proposal of $35.89.

Ferrero is planning to open a Nutella Cafe near Union Square that will be its first permanent location in New York.

Manhattan has seen tens of thousands of new hotel rooms in recent years, and average daily room rates just rose for the first time since 2014 in the first quarter of the year.

During the first quarter of this year, average daily room rates in Manhattan grew, marking the first increase since 2014. Room rates rose 3.5% year over year, to $216.00 per night.

Roughly 10 years after ground broke on 3 World Trade Center, the tower is due to open.

The Times Square hotel-and-retail redevelopment known as TSX Broadway is claimed to be worth $4.2 billion by 2023 according to an EB5 filing. TSX Broadway have plans calling for elevating the theater and redeveloping the existing structures into a 47-story, 550,000-square-foot building with 663 hotel rooms, 110,000 square feet of retail and a 17,000-square-foot LED sign on the lower front of the tower. It also includes plans for a pop-out outdoor performance stage space. The project has a second address of 702 Seventh Avenue.

Chinese investment in commercial real estate in the U.S. has dropped dramatically. Chinese companies funneled $7.3 billion into U.S. commercial real estate in 2017, a sharp decline from 2016, when firms spent $16.2 billion. The pullback is due to strict capital controls put in place by the Chinese government to temper the flow of capital into the United States.

Foreign investment in U.S. commercial real estate remains strong, despite a major pullback from Chinese companies that have been hampered by capital controls its government has imposed.

After 104 years, the Lord & Taylor flagship store at 424 Fifth Avenue is to close. Hudson’s Bay Company, which owns the retailer, will close the location along with nine other unspecified Lord & Taylor stores by the end of 2019.

Long Island-based Maddd Equities 74,000-square-foot development at 1164 River Avenue in the South Bronx will stand 17 stories tall and include 250 rental units and about 88,000 square feet of commercial space. Maddd Equities is partnering with the affordable housing nonprofit Community Access on the project.

NYU Langone Medical Center is adding 150,000 square feet to its lease at 1 Park Avenue, bringing the total rented to 630,000 square feet. The medical center has expanded multiple times. In 2011, it doubled its space in the Park Avenue building to about 370,000 square feet and has grown by another 110,000 square feet since then. Rents at the building were in the mid-$70’s per square foot.

Churchill Real Estate Holdings took possession of a Soho development site for $13.8 million. Churchill claimed that it had not received payment on a nearly $14 million loan, filed a petition to push 74 Grand Street Equities into involuntary bankruptcy. The purchase price is higher than the $12.5 million appraised value for the lot.

WeWork is renting three floors at 130 Fifth Avenue. The firm signed for around 30,000-square-foot lease at the 11-story building. It is the firm’s ninth space in the Flatiron District. The company’s Manhattan footprint totaled 4.1 million square feet. This amounts to a 45% market share, which is more than the next ten operators combined.

Clipper Realty is leasing back 40 dormitory units to Touro College at the Upper West Side rental building it bought from the school last year for $79 million.

Major companies have started their move to the far west side of Manhattan, and luxury hotels are not far behind. Brookfield Property Partners has already signed up Pendry Hotels to manage a project at Manhattan West with 164 rooms.

Danny Meyer is planning a 20,000 square feet restaurant to the Manhattan West complex. The deal would include outdoor space for 15 years or more. The six-building complex includes 250,000 square feet of retail space, including a 60,000-square-foot Whole Foods and a 26,400-square-foot Peloton in 5 Manhattan West.

Frank McCourt, former owner of the Los Angeles Dodgers, may be ready to move ahead with developing his plot at a prime corner in Hudson Yards. The site is located between West 30th and 31st streets and has sat vacant and untouched for four years.

JPMorgan Chase has agreed to buy 50,000 square feet of air rights from St. Bartholomew’s Church but is leaving the door open to buy up to 505,000 square feet more for $157.8 million.

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