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June 2012

June 2012 » Market Analysis » NY New Developments

June 2012 New York New Developments

Major Developments

A judge has rejected a bid by an investment partner at the Domino Sugar Factory to block its partner from recapitalizing the proposed $1.5 billion project.

Express has signed for a flagship space in Times Square, believed to be at 1552 Broadway.

The first retail stores at the World Trade Center site could open for business by March 2015. Westfield, which has a 50 percent stake in the WTC site’s retail space, said the first retailers will be announced in the first half of next year. The openings would come more than 13 years after the destruction of the World Trade Center towers.

Alexico Group and its partners have filed for bankruptcy protection in connection with two buildings, which have $368 million in liabilities. The developer has $245 million of outstanding liabilities on the 272-room Flatotel at 135 West 52nd Street with lenders Rockpoint Group, Procaccianti Group and Atlas Capital Group. The partnership purchased the debt from Anglo Irish Bank two years ago.

Luxury retailer coach has expanded its presence at Hudson Yards and agreed to purchase an additional 150,000 square feet on top of the 600,000 for which it already signed. Coach can add another 100,000 feet to bring its total to 850,000, or one-half of the forthcoming 46-story building’s 1.7 million square feet.

Google’s headquarters on Eighth Avenue will house the Cornell-Technion applied science graduate school while the permanent campus gets built on Roosevelt Island. Classes are set to begin this fall.

Chelsea residents voiced their strong opposition to the Chelsea Market expansion during the public hearing portion of a Manhattan Community Board 4 meeting. Their argument against Jamestown Properties’ development primarily centered on CB4 not altering the existing zoning of the neighborhood to gain concessions from the new market.

As Roosevelt Island’s Goldwater Hospital prepares to close its doors at the end of next year, partly to make room for Cornell’s forthcoming tech campus, city health officials are tasked with shuffling its 800 patients to other hospitals, rehabilitation centers and housing facilities throughout the five boroughs.

Industry City Associates has successfully restructured its $300 million loan on Bush Terminal, a 16-building complex along the Brooklyn waterfront in Sunset Park. The ownership defaulted on the loan early last year after the economic downturn forced many office and industrial tenants out of their space, requiring Industry City to pay off the debt out of pocket.

Minskoff Equities’ new office development in Midtown South will have asking rents between $88 and $115 per square foot.

Midtown’s first new office building in three years topped off last week and is coming closer to signing a second major tenant. Boston Properties’ 1.1 million-square-foot tower, slated to open in 2014 at 250 West 55th Street, is being eyed by technology giant Microsoft and law firms Chadbourne & Parke, which nearly signed for space at 1 World Trade Center, and Kaye Scholer.

The Bloomberg administration’s new Willets Point agreement calls for a 1.4 million-square-foot mall and parking garage on one side of Citi Field, and a 200-room hotel and stores on the other.

The owner of the Chelsea Market, Jamestown Properties, is in contract to pay more than $80 million for a massive, industrial-style office building in Long Island City. The five-story property, which served as a warehouse for the famed department store Gimbel Brothers until it was converted to an office building in the 1980s, sits at 31-00 47th Avenue and covers an entire city block. The Falchi Building is jointly owned by the Chetrit Group, headed by Joseph Chetrit, and principals of the Queens-based commercial brokerage Kalmon Dolgin Affiliates.

The Metropolitan Transportation Authority is currently considering an option to outsource both the management and operations of the East Side Access concourse and has paid a consulting firm $600,000 to see if the plan is possible. The agency will also issue a request for proposals next month to have private companies manage the Fulton Street Transit Center in Lower Manhattan.

Manhattan Residential rents ticked up in April even as more inventory came online. There were 6 percent more rental listings last month than there were in March, as renters eschewed renewing their lease in search of better deals elsewhere. Renters with expiring two-year leases last month saw rents increase 14 percent for studios, 12 percent for one-bedrooms and 15 percent for two-bedrooms from the time they first negotiated their deals in April 2010.

The white-hot rental Residential market and the shifting demographic of renters has compelled more New York City landlords to invest in extensive renovations of their rental properties. Landlords of apartment buildings that are 10 to 30 years old are spending millions to gut renovate well-located buildings and raise rents 10 to 40 percent.

An alteration to the design of the spire atop 1 World Trade Center could work against the tower’s bid to be the tallest structure in America. In January, the Durst Organization confirmed it was removing the fiberglass and steel casing around the mast that would have brought the400-foot pole to 23 feet in diameter. Without the cladding the diameter of the spire would be just six feet, rendering it unlikely to be counted as part of the building’s height by the Council on Tall Buildings and Urban Habitat.

Operating observation decks atop large towers is so profitable that seven bidders, including two from outside the United States, submitted proposals to the Durst Organization and the Port Authority of New York & New Jersey to do so at 1 World Trade Center.

The Chetrit Group is working to get Department of Building’s approval for the rooftop addition at the Hotel Chelsea renovation, even as the structure already exceeds the area’s zoning limits. The landmarked building at 222 West 23rd Street has a total floor area that’s nearly 37,000 square feet larger than the 129,953 zoned for the site, and exceeds the maximum 145-foot height by five feet.

A second new tower could rise on Park Avenue now that Lehman Brothers Holdings has full control over 237 Park Avenue. It is considering building a new tower on the property, near 45th Street.

Online shopping, steep Manhattan retail rents and tight margins are changing the face of New York City’s big-box retail chains. Now that Borders is gone and with Circuit City, Best Buy and Barnes & Noble scaling back, landlords are readapting their buildings for smaller tenants. Finding a 25,000-square-foot single-use tenant in this landscape is more difficult than it would have been 10 years ago.

Forest City Ratner believes modular construction will grow increasingly common in New York City high rise development and that’s one reason the firm has established a modular factory in the Brooklyn Navy Yard. Utilizing modular construction for the 34-story, 340,000-square-foot residential building set to rise in Atlantic Yards could cut the construction time of the project by one-third to just 12 months. Even as costs are reduced, the construction method won’t impact future tenants in the rental building.

The $40 million Times Square upgrade will begin this fall and will be complete this fall. The project will make the pedestrian plazas and benches along Seventh Avenue and Broadway permanent, add electrical outlets and repave the roads with a mosaic design embedded in the concrete. All the while, a 15-foot wide path will be open to pedestrians, two lanes will be open to vehicular traffic, the annual New Year’s festivities will go on as planned and access to all buildings will be maintained.

The Dia Art Foundation is planning to build a 22,000-square-foot home on its neighboring parcel on 22nd street. Dia closed its doors in 2004 for lack of space. The Gallery just purchased 541 West 22nd Street which is between two other buildings Dia owns, allowing them to build its dream home. Dia paid $11.5 million for the building last year.

BRP Companies and the Macedonia African Methodist Episcopal Church is moving forward with a Flushing, Queens, affordable housing project called Macedonia Plaza which will rise on the site of a Union Street municipal parking lot. The project is funded by a $49.6 million loan.

JCPenney signed a 15-year deal for 130,000 square feet at 200 Lafayette Street.

Following the collapse of 606 West 131st Street, Breeze National, the Brooklyn-based, mob-connected demolition company that was running this project and others for Columbia University’s expansion, has been taken off the job.

Durst Organization and the Port Authority of New York & New Jersey gave the public an up-close glimpse of 1 World Trade Center’s base by releasing new renderings. The 185-foot-wide cube podium, designed by Skidmore Owings & Merrill, will have vertical glass “fins” that suggest texture by varying patterns and extend from stainless steel panels. Aluminum screens behind the steel will illuminate the base.

Mayor Michael Bloomberg just led the groundbreaking ceremony for the first $260 million worth of developments on Governors Island. The initial renovation phase will add formal gardens, lawns, play areas and woodlands. The bulk of the budget will be spent on much-needed infrastructure: repairing 2.2 miles of seawall, building a water-line to Brooklyn, demolishing 18 abandoned buildings and improving electrical and telecommunication facilities.

There’s been a sudden shift in the city’s condominium market: Developers are no longer offering incentives. There is a continued decline in inventory combined with a rise in sales activity. In April, 1,624 listings came on the market in Manhattan, an 8 percent decline from April 2011 and a 21.5 percent slip compared to April 2010.

The Related Companies and the real estate firm controlled by the New York Mets ownership, Sterling Equities, are closing in on a deal to develop a mall on Willets Point. The proposal calls for significant changes to the vision laid out by the Bloomberg administration, most notably bringing more retail to the long-awaited $3 billion project’s first phase.

Hudson River Park supporters are becoming more amenable to the possibility of big development on Pier 40, south of Houston Street, as the park’s financial situation becomes increasingly dire. The Hudson River Park Trust is considering allowing 800 apartments and a 150-room hotel on the crumbling pier, in an effort to raise money to maintain the five-mile long park.

Long considered only for its office and retail potential, Brookfield Office Properties’ massive Manhattan West development site could include residential, too. The developer may include up to 900 residential units in its 5.4 million-square-foot plan. They have the ability to build 900 units on that site. That market has really taken off, and may drive greater value.

The Metropolitan Transportation Authority is looking for restaurants to fill two spaces in Grand Central Terminal that have never before been available and could generate $20 million in annual revenue. One space is 12,000 square feet on the west end of Vanderbilt Hall, centered around a 2,100-square-foot space that used to be a hair salon. The restaurant would put seats in the hall itself and could extend as far back as the Times Square Shuttle passage for a takeout shop. The other space is a 5,000-square-foot balcony that is currently used for storage above the food market. Amazing that the MTA could get the full value of the retail space here and not at the Apple Store!!!
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