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May 2014

May 2014 » Market Analysis » NY New Developments

May 2014 New York New Developments


Major Developments

Duane Reade recently vacated a location next to department store H&M and is now on the market. The unofficial asking rent for the property is nearly $8 million per year.

Commune Hotels & Resorts, a San Francisco-based joint partnership between Thompson Hotels and Joie De Vivre Hotels, has plans to develop two more hotels in Manhattan. One will operate under the Thompson Hotel brand, while the other will have a different hotel brand. The properties, for which Commune has already inked deals, are looking to open in 2016.

The lineup for Westfield Group’s central shopping hall within the World Trade Center retail complex, the Oculus, is now over 70% leased to many retailers currently in soho, though it lacks the very high-end luxury tenants of Upper Fifth Avenue.

TF Cornerstone received approval from the City Council’s Committee on Land Use to proceed with its 1.9-acre Hell’s Kitchen development after agreeing to add a public preschool. The developer said it would allot an extra 10,000 square feet of moderate-income housing, for families earning about $150,000 in annual income. The 1,025-unit rental project at 606 West 57th Street would hold 220 affordable units, rather than 205 as initially planned.

Hell’s Kitchen residents are asking the Port Authority to move forward with a proposed bus garage with or without financial help from the federal government. The $400 million Galvin Plaza Bus Annex would house 100 buses and provide direct access to both the Lincoln Tunnel and bus terminal.

Square, a San Francisco-based startup that makes mobile-payment processors, took 40,000 square feet at Real Estate Equities’ 375 West Broadway in Soho. Square’s total staff will grow from 35 employees to 385. The state’s Empire State Development Corporation offered $5 million in tax credits for the deal. The company raised about $100 million in venture capital financing earlier this month.

City officials believe they have found locations for two of the three displaced Success Academy charter schoolsand expect to finalize a spot for the third soon. Mayor Bill de Blasio revoked offers in February for spaces in public school buildings in Lower Manhattan, Harlem and Queens because it would force out current programs for displaced children.

A Peter Poon-designed Le Soleil Hotel at 38 West 36th Street has started, and the design has been modified. Zoning diagrams match the current version posted on the company’s Hotel website. Though renderings on-site differ from the drawings filed with the Department of Buildings. The renderings also differ from recent depictions of the structure on the hotel’s site.

Law firm Skadden Arps is on the search for a Midtown space, despite attempts to draw the company downtown. The search is rumored to be focusing on the Hudson Yards area. Two properties, 3 Hudson Boulevard and Manhattan West, are considered to be the firm’s top choices. In either locale, Skadden would settle in as the anchor tenant with between 550,000 and 600,000 square feet.

After considering a lease for space at the Rockefeller Group’s McGraw-Hill Building, law firm White & Case has rented 440,000 square feet there. The firm’s current location is at 1155 Sixth Avenue, where it has leased 300,000 square feet. The World Trade Center was under consideration as its new location, but the firm went with 1221 Sixth Avenue. The move will occur in 2017, the year after the current lease expires.

Milstein Properties is teaming up with Grand Central Tech in order to start a thriving startup community in Midtown East, in a former Facebook’s office. Milstein is donating 15,000 square feet of space at 335 Madison to hold 12 to 18 fledgling startups. The ultimate goal, Grand Central Tech’s organizers is to extend the trend of tech firms populating loft-like spaces beyond current hotspots like the Flatiron District and Chelsea.

When developer Edward Minskoff set out to build a new office tower in the East Village, with asking rents ranging from just under $90 to $120 per square foot, roughly double the average in the surrounding area, many in the industry questioned if he made the right decision.

Rose Associates and DTH Capital have signed a contract with Furnished Quarters to operate their extended-stay hotel at 70 Pine Street. The 66-story landmarked hotel in Lower Manhattan will hold 132 hotel rooms when it opens in the fall. Some of the 664 high-end rental apartments on the upper floors of the property will be available at that time. The hotel component will run from floors three through six in the building, which is now under construction.

Alex Chu is gearing up to build his controversial 229-key hotel in Chinatown now that he has a permit. A construction fence has gone up in around the development site of a 22-story tower at 50 Bowery, with a new rendering from architect Peter Poon posted.

310 Group LLC plans to build a 42-story hotel on a 4,937-square-foot lot on 310 West 40th Street. Noy intends to oversee the construction of a 401-foot-tall hotel with 287 rooms at the Midtown lot, located between Eighth and Ninth avenues.

A Residential developer has inked a 99-year lease for a Hudson Yards-area parcel, in order to build a 415,000-square-foot tower. The 700-foot-tall building at West 35th Street and 10th Avenue would hold residential units above either office or hotel space on the lower levels.

Organic Avenue will open its eleventh location in New York City. The store, located at 254 Park Avenue South in the Flatiron District, is the latest in the brand’s push to expand into commercial districts around the city.

With a booming commercial real estate market Downtown why then does Larry Silverstein’s need a $1.2 billion loan guarantee from the Port Authority. Proponents believe the cash infusion, which Silverstein would use to build 3 World Trade Center, would restore the last corner of space destroyed in the Sept. 11 attacks and finally be the jewel in the area’s recent rebirth. The others claim no guarantee is needed.

The Museum of Modern Art is moving forward with its plas to tear down the former American Folk Art Museum to make room for an expansion of its own facilities. The major alterations application, filed with the Department of Buildings, calls for a $1.6 million demolition job at 45 West 53rd Street between Fifth and Sixth avenues that will raze all the stories above ground. The sculptured panel facade, however, will remain. New York City is pulling in billions in real estate tax revenue from the fledgling technology sector. Collectively, the information technology industry pays an estimated $2.5 billion each year in taxes on their commercial and residential properties.

Ron Edelstein, owner of the Imperial Court Hotel at 307 West 79th Street, accused Mayor Bill de Blasio of ordering the Department of Homeless Services to reject his plan to convert the site into a homeless shelter. The mayor’s spokesperson denied the claim and said that a high-ranking agency official informed him of the mayor’s alleged order. Under Edelstein’s plan, the 227-room hotel would be transformed to hold 340 homeless people in 170 rooms. The city would not fund the conversion, but would instead pay nearly $18 million per year to cover staff, food and other services for each person in the shelter.

Ironstate Development’s 900-unit affordable-housing development in Staten Island and a new Fordham University glass tower in Lincoln Square are among the latest projects to receive new renderings.

In spite of local opposition, a Jewish congregation on the Upper West Side is pushing through with expansion. Congregation Shearith Israel is currently housed inside the four-story concrete block at 8 West 70th Street. The 14,474-square-foot structure is currently classified as a parochial school. The expansion will bring it to nine stories and will include roughly 20,000 square feet of commercial space and four full-floor residential units, with the top floors consisting of a duplex penthouse.

A rush to defend a pair of Flatiron buildings may shift a developer’s focus from demolition to restoration. The two buildings at 51 and 53 West 19th Street, between Fifth and Sixth avenues, lie within the Ladies’ Mile Historic District. Given the location, the Landmarks Preservation Commission, along with community leaders and preservationists are trying to derail the developer’s plans to demolish and replace the structures with new construction.

Soon after American Realty Capital’s New York Recovery REIT acquired an office building at 1440 Broadway for $529 million. The company had a loose target to spend another $1 billion on commercial real estate in Manhattan over the next year.

French jeweler Cartier is taking 8,000 square feet at the GM Building for operations while its Fifth Avenue flagship gets a makeover. Cartier’s luxury collections will temporarily relocate to 767 Fifth Avenue.

Megalith Capital Management has paid the Walt Disney Company $85 million for a trio of office buildings on West 66th Street.

Permits have been filed to break ground on Manhattan’s second Crowne Plaza Hotel. The Crowne Plaza Times Square South is to be located at 320 West 36th Street, between Eighth and Ninth avenues.

The Port Authority of New York and New Jersey plans to construct an expanded terminal in Hell’s Kitchen that would handle 100 extra buses. The $400 million Galvin Plaza Bus Annex project would open on West 39th Street between 10th and 11th Avenues by 2020. About 233,000 passengers currently use the bus terminal daily. The annex would accommodate an additional 30,000 passengers. The agency applied for a Federal Transit Administration grant to fund $230 million of the expenses related to an enclosed bus parking facility that’s part of the project.

The Port Authority of New York and New Jersey is looking to angle an ownership stake in 3 World Trade Center as part of an agreement to grant a $1.2 billion construction loan to Silverstein Properties.
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