New York City office
and retail Market Research

June 2013

June 2013 » Market Analysis » NY New Developments

June 2013 New York City New Developments

NY New Developments

The Federal Department of Transportation will give New York $185 million to help build a rail tunnel under the Related Companies’ Hudson Yards project that will allow for high-speed train service between Manhattan and Newark, N.J

Two recent Plaza District office leases have broken new price records, being the most expensive office leases since 2008. Hedge fund Ruane, Cunniff & Goldfarb and the Brazil-based Banco Itaú will pay just under $200 per square foot for space at 9 West 57th Street and the GM Building.

The Lower East Side is getting a new 12-story, 44,000-square-foot, 38-unit residential building at 100 Norfolk Street. Urban-Scape purchased the property from Forest City Ratner in 2012 for $8.8 million.

The owners of the Empire State Building have secured the necessary 80 percent of investor votes needed to form a new publicly traded real estate investment trust made up of the Midtown tower and 17 other properties.

McSam Hotel Group has recently filed plans for two ground-up Manhattan projects. The plans filed at the Department of Buildings, call for a new 17-story hotel with 209 rooms at 538 West 58th Street, between 10th and 11th avenues. In March, McSam filed plans for a new 29-story hotel with 231 rooms at 6 Water Street.

RFR Realty got $100 million in refinancing for the 12-story office property at 345 Park Avenue South. The refinance, which Citibank handled, values the block-long property at roughly $180 million. RFR also borrowed nearly $1 billion to refinance the debt on the landmarked Seagram Building at 375 Park Avenue.

Sackman Enterprises plans to demolish two Upper West Side townhouses located at 15 and 17 West 96th Street to construct a 13-story building on the site.

The number of new residential building permits approved in New York City rose to 3,805 units in the first quarter of 2013, which is a 505 % increase over the same period last year. The figure, which represents a 73.3 percent increase from the 2,195 units approved in the previous quarter, marks the highest number of authorized permits since late 2008.

If the city approves a proposed re-zoning of a strip of East Fordham Road, the Bronx area could see residential development for the first time in 52 years. The plan is now undergoing a public review. The first public hearing is scheduled for June 12. The measures could be adopted in six months.

The Witkoff Group will likely spend $300 million on its 10 Madison Square West condominium conversion project. The developer paid $190 million at auction in 2011 for the 16-story 380,000-square-foot building at 1107 Broadway. The property will be converted into 125 luxury condominiums.

Bloomberg LP plans on taking 68,000 or more square feet at 120 Park Avenue.

Britain’s biggest theater company has purchased a long-term lease for Broadway’s biggest venue, Foxwoods Theatre, for an estimated $60 million. Ambassador Theater Group secured the lease that if renewed, extends through 2073. It is a 1,932-seat theater at 213 West 42nd Street.

Yahoo will open new offices in the former New York Times building. The move is part of Yahoo’s push to expand their New York City presence by 60 percent.

Madison Square Garden may get a new lease from the Bloomberg administration. The City Planning Commission is considering a proposal from the commissioner that could effectively turn a 15-year extension of MSG’s lease into one with no expiration date. The proposal contains a loophole that allows MSG to remain atop Penn Station in perpetuity, if it comes to an agreement with the three railroads beneath it to make infrastructure improvements.

Thor Equities has rented the retail at the Takashimaya Building at 693 Fifth Avenue. The rent for the ground floor was estimated to be $3000/SF. The total rent is believed to be $16 million/year and rented to Valentino.

Senator Charles Schumer expressed overall support for the city’s Midtown East rezoning proposal, but called on City Hall to issue bonds to pay for transit and infrastructure improvements and urged the city to give landmark institutions in the district more flexibility to sell their air-rights.

UBS has listed nearly three-quarters of its office space at 299 Park Avenue in Midtown for sublease. The space inside the 1.2 million-square-foot tower will be available in the middle of 2014. The square footage totals 382,000 square feet. The bank will consolidate the bulk of its operations into the 1.7 million-square-foot 1285 Sixth Avenue, as well as offices it has in Stamford, Conn.

Jones Day is near to signing a long-term lease for 400,000 square feet at Brookfield Place, formerly known as the World Financial Center. The firm would move from its Midtown office at 222 East 41st Street to a 34-story tower at 4 Brookfield Place.

The Peter Poon Architects-designed Hilton Garden Inn coming to 136 West 42nd Street is generating all sorts of online buzz. The 300-room hotel looks to be a mediocre structure in Midtown, judging from the renderings.

The Lightstone Group will soon build a 48-story residential and commercial building on its assemblage site at Fulton Street. Located between Nassau and Dutch streets, the 463-unit tower will rise where the developer razed a number of buildings. Lightstone paid $63 million for the assemblage parcel, which included air-rights from nearby Time Equities’ buildings.

A New York City judge ruled that the owner of 100 Maiden Lane is not liable for its tenant’s loss of electricity following Hurricane Sandy, in what is believed to be the city’s first decision on a commercial lease case related to storm losses.

Profero signed a 13,121-square-foot lease at 386 Park Avenue South, between East 27th and East 28th streets.

Regus signed a 15,000-square-foot lease at 1250 Broadway. Rents at the space are in the $50s per square foot. Regus has inked at least four deals recently: 101 Sixth Avenue 32,000 RSF and 60,000 RSF at Brookfield Place.

Orange Leaf, one of the nation’s fast-growing franchises, has two local stores, plans for three more in the borough, and an additional eight to 12 locations planned to get up and running across the city by the end of next year.

McDonald’s signed a 99-year lease for a two-story building next to One Madison Park, capping years of legal turmoil for the fast food chain that has fought to return to a block it left in 2005.

Crain Communications will likely move to 685 Third Avenue at East 44th Street. The publisher which also puts out Advertising Age and Autoweek will take 57,000 square feet on the ninth and tenth floors of the 31-story building, where asking rents begin in the $50s per square foot. The company will move from its current headquarters at 711 Third Avenue.

The priciest office lease deal signed in the first quarter of 2013 was Macy’s $620-plus million renewal at 11 Penn Plaza, ranking of Manhattan’s most valuable leases.

Aerotek and TEKsystems have inked 10-year expansion deal at 757 Third Avenue. Aerotek will take 13,551 square feet on the eighth floor and TEKsystems will occupy 15,115 square feet on the 12th floor. The two companies have been tenants at the 26-story property since 1997.

The proposed soccer stadium in Flushing Meadows-Corona Park just got two major new supporters. The New York Yankees and Manchester City, which announced their plans to create a new Major League Soccer team, and their first choice for a spot to play is the contentious Queens plot.

Lingerie retailer Victoria’s Secret signed a 60,000-square-foot lease to take two additional floors above its flagship retail location in Herald Square to use as offices, training space and storage.

New York City’s commercial real estate industry is worried that the government will stop what has come to be known as terrorism insurance. The program, called the Terrorism Risk Insurance Act, comes up for renewal next year; if Congress does not extend it, the cost of doing business will increase for owners of iconic properties. Their insurance premiums will rise and their buildings will drop in value.

Mayor Michael Bloomberg and the Major League Soccer have taken a step back from plans to bring a soccer stadium to Queens’ Flushing Meadows Corona Park. The mayor believes it’s a wonderful place for it, but it’s not the only place.

A Florida sandwich shop is mulling World Trade Center retail mall location. A 19-year-old Florida sandwich chain is on a national expansion drive and plans to open 60 stores in New York City over the next 10 years, potentially including one at the under-construction retail mall at the World Trade Center.

Former Congressman, Anthony Weiner announced he is looking to run for mayor, and he would make some substantial changes to city housing policy if he wins the race. Weiner’s plan for affordable housing would grant up-zoning and tax abatement benefits for properties that include 60 percent market-rate units, 20 percent middle-income units and 20 percent affordable units.

Toys “R” Us is planning to vacate its signature 100,000-square-foot space in Times Square by 2016.

Construction is starting on a three-story, three-unit Downtown Brooklyn mini-complex that will serve as the city’s crisis housing for disaster victims. The site, next to the Office of Emergency Management at 165 Cadman Plaza East, was chosen for the $1.1 million contract by the U.S. Army Corps of Engineers.

Lincoln Equities Group received unanimous approval from Queens Community Board 1 on a plan to build apartments, parkland and retail space at Hallets Point in Astoria.

Fort Greene is slated for a five-story, 32-room hotel along Park Avenue. The hotel will tower over three vacant lots between Cumberland Street and Carlton Avenue, and will be part of the Choice Hotels group.

The U.S. Tennis Association is about to expand its complex in Flushing Meadows-Corona Park. The proposal now goes before the City Council after the Planning Commission signed off on it. The $500 million plan, the USTA is looking to overhaul its 42-acre Billie Jean King National Tennis Center; replace the aging Louis Armstrong Stadium; build a Grandstand Stadium and two parking garages; and replace seven tennis courts.

Times Square may be experiencing a mini technology boom, with Tech companies including Yahoo and Microsoft taking up 633,000 square feet of space in the neighborhood over the last 18 months.

With buyers shelling out $3,000 per square foot for apartments perched in the sky, it makes financial sense for the developers to build needle-like towers. Previously, builders acquired wide sites, since constructing tall properties on small sites was expensive.

A development watchdog group has raised concerns that a new judge overseeing a challenge to the Broadway Triangle apartment complex in Williamsburg will be biased in favor of the project.

The owner of the former Tung Fa Noodle Factory in Williamsburg is aiming to convert the property to apartments.

The Department of City Planning released its post-Sandy building-elevation plan that calls for zoning changes to allow for such alterations. The city waived some zoning rules to speed up recovery work, but now these zoning changes are set to become permanent city guidelines.

The mall at 80-00 Cooper Avenue opened in 2006 with an array of upscale shops but went bankrupt. Five years later, California-based Macerich bought the mall for $54 million and has been working to bring affordable national chains to the location.

Apartment dwellers who use Airbnb to rent out their rooms are now worried that they will lose out on the extra income, following a court decision that upheld a $2,400 fine against an Upper East Side landlord who used the service.
  • Green Acres Is the Place for Macerich
  • Billionaire Shows How Small Buildings in NYC Can Mean Big Money
  • Optimal Spaces in the News - New York's Pix11 / Wpix-Tv
  • Fighting rubber ruler measurements
  • Manhattan's Low-Rent Dining in Hiding
  • The NY Fed Is Buying Its Own Building