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June 2018

June 2018 » Market Analysis » NY New Developments

June 2018 New York New Developments

New York Major Developments:

The top 10 office leases totaled 1.9 million square feet, much larger than the previous month’s top 10 leases, which totaled 996,000 square feet.

  1. Pfizer signed a lease for 800,000 square feet of office space at 66 Hudson Boulevard.
  2. Latham & Watkins signed a lease for the 25th through the 34th floors, totaling for 407,000 square feet at 1271 Sixth Avenue.
  3. inked a lease for 200,000 square feet of warehouse space at 1055 Bronx River Avenue. The asking rent was $22.00 per square foot.
  4. McDermott Will & Emery signed a 20-year lease for around 106,000 square feet at 1 Vanderbilt Avenue.
  5. Investcorp renewed its lease for 75,000 square feet at 280 Park Avenue.
  6. Transfix inked a lease for 60,000 square feet of space at 498 Seventh Avenue.
  7. MDRC signed a 10-year lease for 55,000 square feet at 200 Vesey Street.
  8. Phillips Nizer expanded its size by about 53,000 square feet at 485 Lexington Avenue.
  9. Permanent Mission of Japan to the United Nations inked a lease for 50,000 square feet of office space at 605 Third Avenue and will occupy the 27th, 28th and 29th floors of the building.
  10. IQVIA signed a lease for 46,000 square feet of office space at 200 Vesey Street.

Sears Holdings Corporation is to close another 72 stores as the company attempts to wave off plummeting sales. With about a half-dozen stores in New York City, it is unclear which stores will shut but the company is expected to announce closures shortly.

Chinese publisher WanXin Media is moving forward with plans to convert the office building at 7-15 West 44th Street into a hotel. The company will build on an additional 16 floors, bringing the height up from 12 stories to 28.

Times Square is getting its first Cover Girl store at 719 Seventh Avenue renting 10,040-square-foot at the five-story building for its flagship location. The deal includes 5,800 square feet of LED billboards and the asking rent was $6.5 million per year.

The Landmarks Preservation Commission voted unanimously to create a new historic district between Lenox Avenue and Adam Clayton Powell Jr. Boulevard and between West 130th and 132nd Streets. The district has about 164 buildings.

The divide widens over an appropriate rent for prime ground-floor retail spaces, as a landlord and a retailer are deadlocked. The dispute is between Barneys and Ashkenazy Acquisition Corporation over Barney’s 230,000-square-foot flagship store on the Upper East Side. The landlord seeking to triple the rent. The 20-year contract is due to expire in 2019 and the landlord is looking for an annual rent of $60 million for the ground-floor storefront and eight other floors it holds in the building.

Brookfield Property Partners is now turning to hotels. Brookfield, through one of its private real estate funds, has signed a letter of intent to buy the Hotel Indigo on the Lower East Side from Brack Capital Real Estate for $160 million.

Gourmet grocery store Dean & DeLuca is battling with landlords and suppliers as it cuts back on its expansion plans. In Manhattan, the grocery store pulled out of three leases last year, including one near Grand Central Terminal.

The City of New York is debating to impose a form of retail rent control. Two of the city’s shopping districts, Greenwich Village and Hell’s Kitchen have similar retail asking rents but one looks like a ghost town and the other is thriving. Asking rents on Greenwich Village’s Seventh Avenue South and Hudson Street are around $150 to $155 per square foot, similar to the average of $139 per square foot on Ninth Avenue in Hell’s Kitchen between West 42nd and 59th streets. But retail vacancy in the West Village across 284 storefronts is 11.3%, while in Hell’s Kitchen it’s only 5% across 262 stores.

State and local governments are vying for a federal subsidy intended to encourage energy-efficient technology in commercial properties. As part of the Energy Policy Act in 2005, 179D offers tax deductions to property owners who incorporate green technology into their buildings.

Knotel is continuing its leasing with a new deal for 23,000 square feet across four floors at the 21-story office building at 989-991 Sixth Avenue.

Dunkin’ Donuts plans to increase the number of Manhattan coffee locations over the next three years and open 60 new or relocated stores in the borough which would be part of the company’s modernized concept called Next Generation. Dunkin’ Donuts has 161 stores in Manhattan. Retailer Target is in advanced talks to open a location at One Wall Street. Target is looking to take about 35,000 square feet at the base of the building. The company recently signed on to a 22,500-square-foot store at Essex Crossing, which will be its first location on the Lower East Side.

First Republic Bank will increase its footprint in Rockefeller Center by 130,000 square feet, almost doubling its space. The bank will now occupy 280,000 square feet across two buildings, after signing a lease for a 100,000-square-foot space on the third and fourth floors of 10 Rockefeller Plaza.

After the biggest fundraising campaign in its 144-year history, the 92nd Street Y is now planning a $180 million renovation of its Upper East Side headquarters.

Neighborhood Charter School just signed a 45-year lease at 411 Wales Avenue in Mott Haven. that will let it avoid paying both conversion costs and property taxes. The site is home to a warehouse that will undergo a $20 million redevelopment to convert it into a school. The nonprofit Civic Builders will pay to develop the space and lease it to Neighborhood Charter School for rents in the $30’s per square foot.

McKinsey & Co. signed a 15 year lease for 186,000 square feet at 3 World Trade Center. Asking rents at the 80-story tower have been reported to be in the $80’s per square foot.

Aqua Restaurant Group signed a lease to open a new dining concept in the former Le Cirque space at 731 Lexington. They will move into the 18,750-square-foot space with a pricey Chinese restaurant by the end of the year.

About $2.7 billion worth of real estate investment poured into the Bronx last year, the second highest amount since 2009 but an 18% drop from the year prior.

California’s massive Teachers pension fund is pumping $300 million into commercial real estate, with a focus on the tech sector.

The city will soon bump up fines for violating stop-work orders on construction sites, adding another $1,000 to penalties imposed for first-time offenses. Starting June 18, the Department of Buildings will impose penalties of $6,000 for initial offenses and then $12,000 for every subsequent violation. Currently, the agency charges $5,000 for the former and $10,000 for the latter.

WeWork is taking more space in Chelsea. The $20 billion co-working company signed a 100,000-square-foot lease at 214 West 29th Street.

The Borough of Manhattan Community College expanded its footprint at 255 Greenwich Street in Tribeca to almost 245,000 square feet. The two-year City University of New York school inked a 17-year lease for around 78,000 square feet in the building. Asking rent for the space was $60 per square foot.

The de Blasio administration is moving ahead with its proposal to limit hotel development in large areas of the city. The Hotel Association of New York City, which represents owners of some 280 hotels, has yet to weigh in on the plan the mayor first announced in 2015 that would require developers to receive a special permit to build new hotels in light manufacturing zones.
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