May 2015 » Market Analysis » NY New Developments

May 2015: New York New Developments

New Developments

China's largest publicly-traded developer is buying a majority stake in at 130 West 42nd Street, a 30-story office building for $125 million.

Real estate funds are receiving more investment from pension funds, endowments and institutional investors.

Madison Capital is buying a retail space encompassing at least 32,000 square feet at 549-555 and 557-559 Broadway in Soho for $400 million. Asking rent for the new ground-floor retail space will likely exceed $1,000 per square foot. Scholastic paid $25.5 million for the 10-story property at 557-559 Broadway in 2010, and $255 million for the 12-story property at 549-555 Broadway last year.

361 Central Park West - the developer's plans would see a gut renovation of the church's interior, plus the addition of windows and a penthouse to the property. Pending approval from the full community board, the developers would still need the city's Board of Standard of Appeals to sign off on the project.

A community board panel agreed to an exemption for a Manhattan developer's plans to convert a landmarked Upper West Side church into a condominium.

Following Gucci's sale of 685 Fifth Avenue last year for $460 million, Gucci is seeking about 70,000 square feet and weighing a possible relocation to Lower Manhattan. Gucci has already moved its retail store to 50,000 square feet in Trump Tower at 721 Fifth Avenue.

Rupert Murdoch's News Corporation and 21st Century Fox are considering jointly developing a new 88-story skyscraper at the World Trade Center site, and moving their headquarters there. The developer Larry Silverstein has the rights to build the 3.1 million-square-foot 2 World Trade Center, the fourth and final office tower at the site. The proposed new skyscraper would complete the World Trade Center complex that was destroyed on Sept. 11, 2001. It removes any uncertainty that the new trade center would be a major economic engine and it validates the 15-year effort to rebuild the World Trade Center.

Peter Fine's $13 million purchase of a Lower East Side synagogue and nursing home will go before a judge soon, amid opposition from congregants who believe the synagogue president has ulterior motives. Fine has plans to develop the Home of the Sages at 25 Bialystoker Place, along with two adjoining lots, into housing. Because of the synagogue's nonprofit status, a judge must approve its sale. But congregants say that the trustee and president of Home of the Sages, obtained approval for the sale through a shadow board, none of whom attend the synagogue.

The owner of a Midtown office building filed for Chapter 11 bankruptcy protection in an effort to save the building from being auctioned off. The property at 315 West 35th Street is 63,000-square-feet. The office building is supposed to be converted to condominiums and was about to be sold for $40 million, which would cover the roughly $30 million owed to creditors. The property was bought in 2006 for $16 million.

Joseph Safdieh's Safka Holdings is suing Joseph Sitt's Thor Equities and General Growth Properties, claiming he was bilked out of purchasing a prime piece of real estate on West 57th Street. Safka is asking the court to terminate Thor's contract and is looking to get back into the deal. Safdieh claims in the suit that he planned to buy the landmarked, four-story property at 220 West 57th Street in 2013 for $65 million. The 22,000-square-foot building houses Lee's Art Shop and comes with 126,000 feet of development rights.

Vornado Realty Trust is looking to upgrade the area around Penn Station, by investing money in retail space, public plazas and infrastructure. Office buildings in the blocks surrounding the station are currently considered to be in a second-rate location, which causes them to bring in relatively low rents. Vornado, which owns about 9 million square feet in the area, is looking to invest hundreds of millions of dollars. If the REIT succeeds, it could add significant value to its properties, such as the 57-story 1 Penn Plaza.

The Moinian Group's 3 Hudson Boulevard, the proposed 66-story, 1.8 million-square-foot tower, has yet to receive official approval from the city, but is likely just months away from securing a key anchor tenant. There are no plans to start construction on the tower without the security of at least a 500,000-square-foot tenant.

Bank of China is readying to move into the nearly completed 7 Bryant Park, but contrary to what was previously expected, the bank will be occupying only 40 percent of the tower. The bank bought the 30-story, 471,000-square-foot property for a reported price of nearly $600 million at the end of last year. The deal is for a long-term leasehold, about 60 percent of that space will be up for lease, adding to Midtown's Class A vacancy. The figure makes sense given that Bank of China was initially in talks to be a flagship tenant occupying just a portion of the tower, before deciding to acquire the building.

A bankruptcy judge has approved the sale of RadioShack's estimated 1,700 stores to the electronics retailer's biggest shareholder.

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