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May 2012

May 2012 » Market Analysis » NY New Developments

May 2012 New York New Developments

New Developments

Morgan Stanley just signed a lease for almost 1.2 million square feet of space at Brookfield Office Properties Inc.'s 1 New York Plaza in lower Manhattan. The bank, which currently occupies about 816,000 square feet at the building, will expand by an additional 337,000 square feet. The agreement is the largest office lease for a single building in New York since 2008.

Mayor Michael Bloomberg’s push to modernize Midtown East office buildings has become a legacy issue as the mayor’s reign whines to a close. Bloomberg wants to re-zone the area bounded by Third and Fifth avenues and East 39th and East 59th streets to allow developers to knock down aging, undersized buildings and replace them with taller, modern towers.

Time Warner will soon send tri-state landlords a request for proposals as it seeks some 4 million square feet of office space. It represents the first step in the firm’s search for space as its leases at 1100 and 1270 Sixth Avenue near their end. It also owns office space in Columbus Circle. Time Warner has 6,500 full-time employees and is considering space in about 20 sites, including the World Trade Center, Hudson Yards and other Far West Side developments, including Manhattan West. The media giant might opt to trade its coveted Columbus Circle space for a larger block in Related’s Hudson Yards, where it could consolidate operations.

The city is getting set to alter zoning regulations to encourage environment-friendly building construction and renovation. City Council is expected to approve changes next week that would permit developers to add eight inches of thickness to exterior walls that are excluded from the building’s footprint measure and add height and alter facades of certain buildings to allow for solar panels, green roofs and wind turbines.

The number of violations issued against residential landlords who illegally house temporary occupants in their apartment buildings has more than doubled in the wake of 2011 state legislation curbing illegal hotels.

The administration’s Office of Special Enforcement task force issued 1,897 transient occupancy violations in 2011 – almost two-and-a-half times more than in 2010 – and about 96 percent, or 1,820 violations, have been issued since the law took effect in May 2011, the data through Dec. 31, 2011 show.

Brooklyn takes the longest in the complete a foreclosure. It took an average of 1,187 days to repossess a home in Brooklyn during the last three months of 2011,. There were a total of 32 foreclosures in the last quarter of 2011, although upwards of 27,000 homes had loans in delinquency, data from the New York Department of Financial Services show.

The stalled Long Island City site where developer Edward Minskoff once planned 635 dorm rooms will become a retail and commercial complex. Alma Realty purchased the vacant structure, at 30-30 Northern Boulevard, in January 2011 for $21.5 million.

As Manhattan rents reach record heights, investors are pushing prices of apartment buildings ever higher as cap rates fall. The capitalization for multi-family buildings in Manhattan averaged 4.4 percent in the first quarter of the year. That’s the lowest return rate since the third quarter of 2005.

Joseph Sitt’s Thor Equities filed demolition plans for three adjacent properties on Fifth Avenue,. Thor plans to redevelop the three buildings, located at 516, 518 and 520 Fifth Avenue between 43rd and 44th streets, into a 300,000-square-foot building. The plans call for building an architecturally significant modern glass building.

The plans for phase 2 of City Point, a mixed-use retail development along the Fulton Street mall in Downtown Brooklyn were revealed. Phase two consists of two residential towers, one 19 and one 30 stories tall, with a combined 650 units. The bottom will hold 500,000 square feet of retail.

Gary Barnett’s Extell Development is looking to the courts to take control of an under-utilized Manhattan office property from brothers Michael and Frank Ring. Extell owns half of the 120,000-square-foot 251 Park Avenue South, while the other half is owned by the Ring brothers. The property is managed by Frank’s F.M. Ring Associates.

Mayor Michael Bloomberg vetoed a bill yesterday that aimed to increase the wages of maintenance workers in privately owned buildings that have business with the city, Bloomberg also said that he would also veto a separate living wage bill that the City Council is expected to pass.

Though a lack of inventory has driven down sales activity for new developments in Brooklyn, it has also kept prices steadily rising. New development sales volume fell 38 percent in the first quarter from $141 million during the final three months of 2011, as the number of sales decreased 47 percent during that period and 75 percent on an annual basis.

Proposed zoning changes to allow the Jet Blue and its neighbors to permit huge rooftop signs that could be seen from Manhattan. A City Council subcommittee unanimously approved the changes to permit such signs on nonresidential buildings along 14 block fronts between 23rd Street and the Sunnyside railroad yards. It is one of the last steps in the approval process. The full Council is expected to vote to approve the amendments, which will pave the way for the four-and-a-half-story-high sign.

Larry Silverstein proposed to build and pay for a much-needed Manhattan bus garage involves developing a site on West 39th Street and Dyer Avenue used most recently by Mercedes-Benz by the service road that funnels traffic to and from the Lincoln Tunnel just southwest of the Port Authority Bus Terminal.

Barry Sternlicht’s Starwood Capital, along with Tribeca Associates, is bringing the five-star hotel brand Baccarat to Midtown.The partnership will flag the fourth through 12th floors of its 45-story development project at 20 West 53rd Street with the hotel name. The hotel will open In 2014 and cost $403 million and will include 115 hotel rooms and 64 high-end residences.

The New York City Economic Development Corporation announced that it has selected Guido Passarelli & Sons to develop a 10-acre retail site on Staten Island. The site, located in the island’s Charleston neighborhood, has approximately 130,000 square feet of retail space. If the proposal successfully navigates the public approval process, Passarelli will pay $7.1 million for the site and spend an additional $25 million on construction.

A total of 15 hotels opened around New York City in 2011, nearly half of them were outside of Manhattan. In fact, between 2006 to 2011, 42 percent of New York City’s new hotels were in the outer boroughs, according to data from NYC & Company.

Sen. Chuck Schumer has turned up the pressure on the United States General Services Administration to complete its lease at 1 World Trade Center. The agency has been in talks for space in the building for five years and signed a term sheet for 300,000 square feet on floors 50-56 last August, in the low $40 per square foot, that would bring the building past 50 percent leased.

Despite an unexpectedly thorough review from the U.S. Supreme Court in recent months, the court has declined to hear the case of James Harmon, the Upper West Side landlord challenging rent stabilization laws.

The new owners of 530 Fifth Avenue are hoping to achieve the higher retail rental rates of prime Fifth Avenue retail to traditionally overlooked retail stretch of the avenue below 49th Street., the partnership of Jamestown Properties, Rockwood Capital, Crown Acquisition and Murray Hill Properties that bought the property from Joseph Moinian and the Chetrit Group has a plan to charge $1,500 per square foot for the nearly 50,000-square-foot retail space.

L&L Holdings has taken a major step towards erecting the first new office tower along Park Avenue in more than 30 years. The new skyscraper will be at 425 Park Avenue, between 55th and 56th Streets.

Joseph Tabak and his Princeton Holdings won a victory that gives him the right to invest in a $112.5 million stake in the underperforming Manhattan Ring family portfolio. An arbitrator issued a decision siding with Princeton Holdings and partner the Bluestone Group against Michael Ring that forces Ring to sell a stake in a 14-building portfolio to Princeton and Bluestone.

The new guidelines for crane operators in New York City will go into effect in May. The new guidelines will require applicants to obtain certification from a nationally accredited organization.

Best Buy announced the Harlem store 50,000-square-foot space in East River Plaza would be the only one in New York City among 50 nationwide closings.

New development by Hudson Companies on Roosevelt Island is underway that aims to make the island a residential destination. The complex will comprise nine buildings. That six of them are currently complete and three are yet to be built.

The Howard Hughes Corporation the owner outlined its ambitious plans with the Landmarks Preservation Commission to “turn Pier 17 into a glass-clad shed dominated by two 60,000-square-foot sales floors on the upper level, which would mean that no large-scale retailers could be accommodated.

A combination of two duplex co-op apartments on the 12th and 13th floor of 740 Park Avenue that were assembled by Time Warner’s former chairman Steven Ross, since deceased, has entered contract for $52 million. If they close this would be near a record sales price.

Talks to landmark the perpetually unfinished Cathedral of St. John the Divine in Morningside Heights have renewed for a fourth time in more than 40 years as Equity Residential lays plans for a 15-story apartment building on the church’s campus. Once again, preservationists and activists want the building and its surrounding campus — called “the close” — landmarked before Equity begins work on its development.

A $140 million loan on developers Joseph Sitt and Joseph Moinian’s 245 Fifth Avenue has been transferred into special servicing because of default concerns. While the developers are still current on their loan, a default may be imminent, the data indicates. The transfer happened March 5.

Architect Gene Kaufman presented his renovation plan for the Hotel Chelsea to the Landmarks Preservation Commission. The most controversial aspect of the plan was a 16-foot high glass and aluminum 3,800-square-foot rooftop addition to the landmarked building at 222 West 23rd Street.

Rabbi Joshua Metzger is in contract to purchase 509 Fifth Avenue for $40 million, potentially bringing an end to the many lawsuits pending at the tower between 42nd and 43rd streets. The 12-story, 60,000-square-foot building is partially occupied by non-profits the Chai Foundation and Chabad Lubavitch of Midtown, both run by Metzger.

American International Group, usually known as AIG, is jumping back into the real estate investment game after years of trying to minimize its real estate business. .

New York University has agreed to scale back its controversial expansion plans by almost 20 percent,. The university will reduce the combined square footage of its four planned new buildings on the blocks surrounded by Laguardia Place and Mercer, West Houston and West 3rd streets by 370,000 square feet to slightly more than 1.9 million square feet.

The Mercedes House, a massive new residential development that the Mexican architect Enrique Norten has designed for David and Jed Walentas of Two Trees Management on a plot of land covering almost the entire block between 10th and 11th avenues between 53rd and 54th streets.

The widely reported $600 million offer for the Plaza hotel would not include the stake controlled by Saudi billionaire Prince Alwaleed bin Talal. Bin Talal’s Kingdom Holding Company had sold the Plaza to the Elad Group for $675 million in 2004, but then bought back a portion soon after.

The expansion proposal for the Chelsea Market was officially filed with the Department of City Planning. This starts a seven-month-long review and approval period for the plan, which would add 240,000 square feet of office space and a 90,000-square-foot hotel to the existing structure at 75 Ninth Avenue, between 15th and 16th streets.

The Tao Group, who is behind the Tao and Lavo restaurants and nightclubs, has inked a lease to bring a 22,000-square-foot restaurant and lounge to the Maritime Hotel, at 363 West 16th Street, at Ninth Avenue.

A state Supreme Court judge said she would rule on an injunction request at the struggling Domino Sugar Factory site in Williamsburg by May 4, after lawyers for developer CPC Resources and its main investment partner battled over a deal to sell the proposed $2 billion housing and retail project

The world’s largest rooftop garden will debut in Brooklyn early next year. Manhattan-based BrightFarms is about to create a 100,000-square-foot commercial greenhouse on top of the eight-story Liberty View Industrial Plaza, a city-owned property, on Third Avenue in Sunset Park.

Development is thriving in the area surrounding the Hudson Rail Yards. Following the rezoning of the area, which spans 28th through 43rd streets west of Eighth Avenue, in 2005, More than 5,000 apartments have been built and more than $5 billion in private funds have been invested in the neighborhood. Recently, Iliad Development said it is going to break ground on a new 200-unit rental building to be located at 509 West 38th Street during the fourth quarter of this year., this is one of dozens of new developments being planned in the next several years.

Related Companies has reached a deal to settle most of the outstanding claims — estimated to be in the tens of millions of dollars — in the ongoing legal drama at the One Madison Park condominium and expects to relaunch sales late this year. The settlements, which include $6.75 million in unsecured claims and several million in additional claims, will allow Related to complete construction at the site and resolve a number of outstanding title disputes at the property, at 23 East 22nd Street, which would allow the developer to put most of the unsold inventory back on the market.

The Witkoff Group and Cammeby’s International partnership that owns the historic Woolworth building is in talks to sell the property for as much as $500 million, the New York Post reported. Steve Witkoff and Ruby Schron’s companies joined forces to purchase the 59-story, 935,633-square-foot building, at 233 Broadway near Barclay Street, for $137.5 million in 1998

Developer Laurence Gluck is on somewhat of a winning streak. Just 11 months after a federal judge ruled the developer did not illegally deregulate apartments at his 1,328-unit Tribeca complex Independence Plaza, at 80 North Moore Street, a state Appellate Court has followed suit, reversing an earlier ruling to the contrary, The Real Deal learned today.

Huguette Clark’s storied penthouse at 907 Fifth Avenue, at 72nd Street, has entered into contract, the listing price was $24 million was likely due to the state of the apartment.

A range of blocks along Columbus Avenue has reached 100 percent retail occupancy. Three new leases have brought the 188 storefronts between 67th and 82nd streets to full occupancy

As Brooklyn’s thriving tech scene pushes Dumbo’s office vacancy rate below 2 percent, local community groups are trying to plot the industry’s expansion beyond the neighborhood but within the borough. The Dumbo Improvement District, Brooklyn Navy and Downtown Brooklyn Partnership have created a task force aimed at making Downtown Brooklyn the destination for startups that can’t find space in Dumbo.

The Federal Highway Administration delivered good news to the city’s longstanding effort to redevelop the Willets Point neighborhood of Queens. Tthe federal agency ruled that proposed ramps for the Van Wyck Expressway would not significantly affect traffic and businesses in the neighborhood.

This fall, the New York Aquarium in Coney Island will break ground on a $150 million renovation project, set to open in spring 2015. The Aquarium plans to raise $30 million of the cost of the project itself through the Wildlife Conservation Society, the non-profit that administers the aquarium, and hopes the city will kick in the rest of the funds.
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