New York City office
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March 2018

March 2018 » Market Analysis » NY New Developments

March 2018 New York New Developments

New York Major Developments:

The city is moving forward with plans to make way for 4.5 million square feet of development on Governors Island. The Trust for Governors Island held its first meeting to discuss rezoning part of the island for commercial real estate development.

Beauty chain L’Occitane en Provence is relocating its Fifth Avenue store of 3,378-square-foot lease at 555 Fifth Avenue. The building had an asking retail rent of $1,100 per square foot. L’Occitane’s lease is expiring nearby at 610 Fifth Avenue.

Facing high costs and lower than expected profits, retailers on some of Manhattan’s most expensive thoroughfares are trying to get landlords to give them a break on rent. Kooples, a French clothing seller, is threatening to leave its space at Thor Equities’ 115 Mercer Street.

Carmellini’s NoHo Hospitality Group has signed a lease for an 11,000-square-foot restaurant at Pier 17, which should be open next year. It will be located on the first floor and mezzanine of the pier.

Manhattan is by far the co-working capital, at least in terms of sheer square footage. More than a quarter of all co-working space, or 7.65 million square feet, is in Manhattan.

It appears that JPMorgan Chase will be buying nearly 700,000 square feet of air rights from Grand Central to build its new 2.5 million-square-foot office tower in Midtown East. The company plans to tear down its headquarters at 270 Park Avenue to make way for a new larger tower, following the rezoning of 78 blocks in Midtown East. The bank is negotiating with different air rights owners.

T.J. Maxx is upping its footprint at its Columbus Circle location. The company has extended its lease and added 19,000 square feet to its store at 250 West 57th Street. The retailer’s space now is 47,000 square feet overall.

Normandy Real Estate Partners plans to spend $40 million to convert several of the upper retail floors at the ABC Carpet & Home building at 880-888 Broadway in the Flatiron District into office space. The developer will market the space with asking rents above $100 per square foot. Maefield Development is buying out its partners Steve Witkoff and Winthrop Realty Trust in the Times Square hotel tower under construction at 701 Seventh Avenue in a deal valuing the project at $1.53 billion.

Thor Equities lost most of its interest in three Manhattan retail-and-office properties over unpaid debt to its joint-venture partner, General Growth Properties. Thor’s 50% stakes in 218 West 57th Street,685 Fifth Avenue and 530 Fifth Avenue shrank to 0.1%, 2.97%, and 9.77%, respectively, in late 2017. GGP now owns 99.9%, 97.03% and 90.23% of the properties, respectively, up from 50% each.

The Archdiocese of New York is moving ahead with plans to sell a trove of air rights from St. Patrick’s Cathedral following last year’s rezoning of Midtown East. The church is scheduled in the coming weeks to present a plan to the Landmarks Preservation and local community board for how it will use the proceeds of any air rights deal to maintain the landmarked cathedral.

Work has finally begun work at its long-awaited hotel site at 79 Eldridge Street were first submitted to the city about two years ago, but construction just started. Although the initial proposal was for a 10-story hotel, the project will now be 14 stories tall and include 48 rooms, along with 1,243 square feet of community space.

Tikehau Capital, a Paris-based firm with $15.6 billion in assets under management, signed a lease for the top two floors at Rockpoint Group’s new development at 412 West 15th Street.

An LLC linked to RKF is facing a lawsuit involving a botched commercial condominium sale and an allegedly noisy fitness center at 130 East 12th Street.

Paramount Group has $600 million worth of commitments for a co-investment fund named the Paramount Gateway Office Club to buy office buildings.

The Ronald O. Perelman Performing Arts Center will make its way to the World Trade Center following an agreement between the Port Authority of New York & New Jersey and the Lower Manhattan Development Corporation. The Port Authority will accept $48 million in funding from the LMDC to cover below-ground construction costs. Work on the below-grade structure for the center should be finished by the end of the year.

Lam Generation filed plans to build a 38-story hotel next to its Marriott-branded tower in Chelsea. They are looking to build a 360-key hotel that spans about 130,000 square feet at 113 West 24th Street.

Northwood Investors obtained a $236.6 million loan to close on its purchase of 1180 Sixth Avenue. Northwood closed on the $305 million purchase of an HNA Group subsidiary and MHP Real Estate Services’ 22-story Midtown office property.

As developers add hundreds of thousands of square feet of new space to the neighborhood, the added inventory just cannot keep pace with Google’s needs.

A state appellate division has cleared the way for Aurora Capital Associates and William Gottlieb Real Estate’s controversial Gansevoort Street project.

Gary Spindler signed a long-term ground lease on one of his parking lots at 622 West 51st Street to Barrington, Illinois-based LSC Development.

In an effort to expand quickly in the city, an exercise studio is planning to use so-called shotgun leases. FitHouse plans to open 15 locations in the city through leases that allow either the studio or landlord to cancel with a 60- to 90-day notice.

Empire State Realty Trust is betting that a gut renovation of the iconic tower’s increasingly vacant retail space will attract tenants and reverse falling revenue. The real estate investment trust, led by Anthony Malkin, has about 50,000 square feet of retail that will be available by 2020.

The New York Times Company will buy back the leasehold on part of its Eighth Avenue headquarters for $250 million. It will repurchase its interest in a 750,000-square-foot office condo at 620 Eighth Avenue in 2019, when the option goes into effect.
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