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March 2013

March 2013 » Market Analysis » NY New Developments

March 2013: New York New Developments

New York New Developments

Acadia Realty Trust has defended its stance on hiring non-union workers for its City Point megaproject and responded to a trade group's accusation that the development exploits the community and wastes taxpayer dollars. They believe that City Point will generate thousands of jobs and enhance Downtown Brooklyn's quality of life. Acadia is committed to maximizing local and minority contracting and employment as they create a LEED-certified development with the affordable housing, retail and entertainment options that the neighborhood well deserves.

A trio of Russian entrepreneurs is redeveloping a three-acre sports complex, slated to be the largest in Brooklyn, in the Coney Island section of Brooklyn. MatchPoint NYC will provide nine indoor tennis courts; an Olympic-sized swimming pool; facilities for yoga, dance, fencing and gymnastics; as well as a restaurant and juice bar.

The City Council's Land Use Committee approved Durst Fetner Residential's development at 625 West 57th Street, a 32-story, 753-unit pyramid-shaped development in Hell's Kitchen near the Hudson River.

The Bronx General Post Office, a gray-brick colossus that has towered over a full block of the Grand Concourse since its New Deal-era construction, may soon be up for {dynamic_word4}, the United States Postal Service. The proposed {dynamic_word4} of the landmarked building is part of a nationwide downsizing meant to stall the mounting losses that have beset the agency. There may be an opportunity in the Bronx to sell the existing Postal Service owned property located at 558 Grand Concourse, and right size the retail operation into smaller leased space.

Strengthening economic fundamentals and buzz surrounding major developments such as the Barclays Center and City Point have served as a boon for the Brooklyn investment sales market.

A mixed-use tower at 22 Thames Street in Lower Manhattan will include 428 residential units, five floors dedicated to retail and residential recreational space, and two floors of performing arts studios.

There are plans to transform the James A. Farley post office at 421 Eighth Avenue into a grand entrance to Penn Station. Many want to relocate the Borough of Manhattan Community College by 3.8 miles to the rear of the post office building, where it would be the complex's anchor tenant. Under the new proposal, the developer would also construct a new train hall, train platforms and underground connections to Penn Station at the front end of the post office.

Time Warner has reached out to two additional firms to help it value its million-square-foot Columbus Circle headquarters. The media behemoth is preparing to move into a new location or consolidate its more than 4 million square feet of New York City office space. If the company does decide to sell, the building could command prices of roughly $1,000 a square foot for a total price north of a billion dollars.

Two Trees Management has modified its all-residential plan for the former Domino Sugar Factory site in Williamsburg and will now include office space for up to 4,000 workers. The company acquired the 11-acre site in October for $185 million and has solicited community input on possible uses. The office proposal, Two Trees principal Jed Walentas, would help make the project a more vibrant development than the several apartments-only sites that have sprung up in the neighborhood in recent decades.

The City's Department of Cultural Affairs provided its most detailed plans yet for Culture Shed, a 170,000-square-foot visual and performing arts institution that will anchor the southern end of The Related Cos.'s 26-acre Hudson Yards project west of Penn Station. The building is envisioned essentially a museum with no permanent collection, that would accommodate shows from local and international cultural establishments. Its most dramatic feature will be a 140-foot retractable structure that when rolled into place will double the size of the ground-floor gallery. City officials hope Culture Shed will open by the end of 2017, though that is contingent on progress on the rest of the Hudson Yards project and fundraising efforts.

Harlem RBI, which is backed by Mark Teixeira, and Jonathan Rose Cos. broke ground on the 143,000-square-foot East Harlem Center for Living and Learning, which will include a K-8 DREAM charter school and affordable housing. The $78.5 million project, located at East 104th Street between Second and Third avenues, will have 89 affordable units and 3,000 square feet of office space reserved for nonprofits.

Gary Barnett's Extell Development is in contract {dynamic_word4} a former Pathmark supermarket on the Lower East Side for around $175 million. The plot, at 227 Cherry Street, between Rutgers Street and Pike Slip, is zoned to allow a nearly 1 million-square-foot development. The building will in all likelihood become a high-rise {dynamic_word2} tower with both market rate and affordable apartments.

The City Planning Commission approved development plans for South Street Seaport's Pier 17 project, though it insisted that the controversial rooftop signage be removed. The commission also requested the developer, the Dallas-based Howard Hughes Corporation, to add moorings for Maritime use.

The New York City Housing Authority intends to raise roughly $50 million by {dynamic_word2} land in the middle of housing projects to developers who could build up to 3 million square feet of luxury high-rises. NYCHA will offer developers 99-year leases on the land, with payments frozen for the first 35 years. The land will yield 4,330 apartments, 20 percent of them affordable, in eight developments in areas including the Upper East Side, Upper West Side, Lower East Side and Lower Manhattan.

City Comptroller John Liu is claiming that a 1998 lease agreement between the city and the Marriott Marquis Hotel in Times Square was a terrible move that could cost taxpayers $344 million.

Norway's $650 billion sovereign wealth fund paid approximately $600 million to pension fund giant TIAA-CREF for a 49.9 percent stake in five U.S. office properties in New York, Washington and Boston.
Vornado Realty Trust has taken over RFR Holdings' mortgage at 608 Fifth Avenue, and is shopping some 44,000 square feet of retail space there. Vornado also signed a ground lease for the building with the land owner, the estate of the late Sarah Korein.

A pair of developers is moving forward with plans to build a 510-room pod-style hotel project in Times Square. The developer plans to demolish three low-rise buildings near the corner of West 42nd Street and Ninth Avenue to make way for a 28-story tower. Developers the Friedman Group and Landis Group are partnering to build the 220,000-square-foot project at 400 West 42nd Street on parcels they acquired for about $80 million before the market collapsed.

Hudson Companies has filed plans to build a 254-unit mixed-use building at 626 Flatbush Avenue in Prospect Lefferts Gardens. is looking for a massive space expansion anywhere between 300,000 and 500,000 square feet in Manhattan. The Seattle-based online retailing company currently occupies just under 100,000 square feet at 1350 Sixth Avenue. The company has been in talks with One World Trade Center and Brookfield Place and has also looked at multiple buildings in Midtown.
Office and retail landlord Vornado Realty Trust just announced that CEO Michael Fascitelli is leaving the firm. He will be replaced by Chairman Steven Roth. Also, Vornado signed a lease with Sunglass Hut for the corner space in 1540 Broadway, at the corner of 45th Street.

Yeshiva University has unloaded three more office properties for a total of $87.5 million. The bulk of the purchase price was for 920 Broadway, located at East 21st Street, which sold for $58.5 million. The 16-story office building has 110,000 rentable square feet and 96 feet of Broadway frontage.

New York Plaza has tapped developer Hines to carry out a $60 million overhaul of the building. The 1.07-million-square tower reopened on January 28th, 2013 after being shuttered for over three months, but is yet to see some of its marquee tenants, including the New York Daily News and J.P. Morgan Chase return. Mark Keller, the chief executive of Edge Fund Advisors, which owns the building in partnership with an HSBC fund, the project was a large undertaking.

Comcast's $16.7 billion acquisition of the remaining stake in NBCUniversal includes the {dynamic_word4} of a large piece of 30 Rockefeller Plaza. As part of the deal with General Electric for the 49% of NBC that it doesn't already own, Comcast will pay $1.4 billion for 1.3 million square feet of office and studio space in the building as well as in CNBC's headquarters in Englewood Cliffs, N.J. The deal is one of the largest the market has seen in recent years, eclipsing even the Chetrit Group's acquisition of the Sony Building at 550 Madison Avenue for $1.1 billion.
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