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May 2016

May 2016 » Market Analysis » NY New Developments

May 2016: New York New Developments


New Developments

General Growth Properties and Thor Equities' are planning to add five new floors of office space at 685 Fifth Avenue. The developers are planning to redistribute space from the lower floors to create five new floors of office space that will be added to the 20-story building, raising its height from 227 feet to 292 feet.

Isaac Chetrit">Isaac Chetrit and Ray Yadidi are planning a mixed-use skyscraper of up to 80 stories in a block-long assemblage on Sixth Avenue between West 36th and 37th streets, consisting of two existing buildings and 235,000 square feet of adjacent air rights. They just purchased the air rights associated with the building at 1352-1362 Broadway, also known as 981-987 Sixth Avenue for an undisclosed price.

New construction for New York City schools reached $3 billion in 2015, an 83% jump from 2014. Ground-up construction totaled $1.3 billion, while alterations and renovations accounted for $1.6 billion of all construction costs last year.

The price of a night at a New York City hotel is falling for the first time in years, and some hoteliers are blaming AirBNB. The average hotel room rate fell 1.7%, for $266 which is the first time average hotel prices have declined since 2009. Prices were also down in the first two months of 2016, hitting $186, a 5.9% decline from the previous winter. At the same time, tourism is on the rise. A total of 59.7 million people visited the city last year, up 2.4% from 2014. The hotel occupancy rate hit 73.2% in the first two months of 2016, up from 72% the previous year.

Hines and REIT Welltower acquired two adjacent properties at 139 East 56th Street from Stephen Meringoff and Dennis Riese for an undisclosed price. They plan to tear down the existing two-story, nearly 7,000-square-foot building, which houses a T.G.I. Friday's restaurant, and are planning a 15-story building for seniors.

Jean-Georges Vongerichten is opening a seafood market and restaurant at the South Street Seaport's Tin Building, and has the power to decide who gets to join him and has already killed several potential candidates, as not the right fit or competed too directly with his spots. The restaurant's current location at 99 East 52nd Street has been its home for more than 50 years. The Four Seasons is set to close on July 16th. The restaurant has already found a new place within walking distance from the original. The move will cause the restaurant to shut its doors for a year.

Metro Loft filed plans for his residential conversion of the former New York Stock Exchange office building at 20 Broad Street, which will feature 521 luxury rental apartments as well as 90,000 square feet of retail space spread across five levels of the property. He plans to spend $100 million gut renovating the building. The retail space will span the ground floor, second floor and three levels below grade.

L+M formed a partnership with Joe and Rachelle Friedman filed a permit application to build a 59-story, 266,000-square-foot tower at 23 Park Row in the Financial District. Plans call for 108 apartments in 213,000 square feet of residential space, as well as 52,600 square feet of retail between the cellar level and the lower four floors. The Friedmans contributed the two properties to the partnership, valuing them at $15.5 million and $36.2 million respectively. The developer paid $21 million to investor Philip Hymowitz for 29 Park Row in May 2015.

The state is seeking a development team that can design and build the $1 billion expansion of the Jacob K. Javits Convention Center. The New York Convention Center Development Corporation is seeking developers who are adept at design-build, a project delivery system that lets a landlord sign one contract with a party that handles both the design and construction of a project.

The Port Authority of New York and New Jersey has paid more than $48 million to date for the former Conde Nast office space at 4 Times Square to remain vacant. Conde Nast moved from Durst Organization's 48-story office tower at 4 Times Square where it had 840,000 square feet, to One World Trade Center in November 2014. The Port Authority has been paying over $3 million a month for more than a year.

Facebook is March's top ten largest office leases renting taking three spaces, a total of 280,668 square feet between Gramercy and Greenwich Village.

Tribeca Associates is financing its acquisition of the 47-story office tower at 30 Broad Street with a $96.2 million loan. The Tribeca-based real estate investment and development firm closed on its $130 million purchase of the Financial District property's leasehold on April 1st. The firm is taking over control of the nearly 477,000-square-foot office building from a partnership led by Gotham Realty Holdings.
The Port Authority of New York and New Jersey may be implementing a budget plan that would accelerate construction at its Midtown bus terminal and Hudson River rail tunnel projects. The agency is preparing a capital projects budget for 2017-2026, which would supplant its current plan, which ends in 2023. The new plan would allow the Port Authority to spend as much as $2.5 billion a year on other developments. Last month, the agency committed to building a new bus terminal in Midtown, to cost around $10 billion. It has floated a plan to sell 2.3 million square feet of air rights at the Port Authority Bus Terminal's current location, allowing construction of a massive condominium tower with ground floor retail. The freed up funds could also help the Port Authority cover its part of the cost of a planned new $20 billion rail tunnel beneath the Hudson River. They may sell its real estate holdings to fund the two projects.

Barry Diller and Diane von Furstenberg's Pier 55 park project on the Hudson River can move ahead. A judge dismissed a lawsuit that the new West 13th Street park would harm local fish population. Construction on the 117,000-square-foot redevelopment is scheduled to start later this year. The Hudson River Park Trust approved plans for a pier to extend 186 feet into the river off 13th Street, with three theater production sites nearby. Diller has pledged $113 million to the roughly $130 million project, which will replace Pier 54.

Andrew Penson is demanding documents between the city and SL Green Realty to discover the motivation for rezoning a five-block stretch of Vanderbilt Avenue. In September, Penson lobbed a lawsuit against the two, alleging that his 1.2 million square feet of air rights over the terminal were rendered worthless by the "Vanderbilt Corridor" rezoning, which enabled SL Green to move forward with plans for its 64-story office skyscraper, One Vanderbilt.

Nike is planning for a move to the former FAO Schwarz space at the General Motors Building. The retailer, whose flagship Niketown store is a block away on East 57th Street, is in late-stage negotiations to lease the retail space adjacent to Apple's iconic cube. It is not clear whether Nike is looking at the entirety or a portion of the 61,000 square-foot space, which includes about 13,000 square feet on the ground floor with the remainder split among a lower level, mezzanine and roughly 34,000 square-foot second floor.

Vornado Realty Trust and Aurora Capital Associates rounded up 40,000 square feet in air rights from the Apple Store building and three other nearby Meatpacking District properties, in an effort to expand its boutique office-and-retail project at 61 Ninth Avenue to 170,000 square feet. The developers closed on two separate air rights purchases: 20,000 square feet at Taconic Investment Partners and TIAA-CREF's 401 West 14th Street, and a combined 20,000 square feet at William Gottlieb Real Estate's 405-409 West 14th Street. The deals closed for $5 million and $10 million, respectively.

Acadia Realty Trust is close to inking a 49-year master lease deal for almost 7,000 square feet of retail space at the Carlyle House on the Upper East Side. The space is on the ground and lower levels of the co-op at 50 East 77th Street between Park and Madison Avenues. Asking rent for the space that fronts Madison Avenue was $3 million per year, in addition to $4 million in key money.
Norway's sovereign wealth fund, the world's largest, plans to increase its real estate holdings by $17 billion. The country is considering raising the fund's real estate investment limit to 7% from 5 %, and much of the activity in the upcoming year could be centered around New York City. Starting in 2010, the government let the fund invest 5% of its assets in real estate, and it built a $28 billion portfolio of properties in New York, Paris and London.

The Chetrit Group">The Chetrit Group has delivered plans for an assemblage it owns on West 34th Street near Penn Station, filing permit applications for a new 33-story hotel holding 300 rooms on the property.

After several years, delays, and the changing of the developer, it appears the redevelopment of the Battery Maritime Building in Lower Manhattan is on the path to be completed by the end of 2017. The Dermot Company, which was tapped by the Bloomberg administration in 2006 for the overhaul of the landmarked building, may be out of the project and Stoneleigh Capital may take over.

Community College, City University of New York's">the City University of New York's newest institution, will relocate from its Midtown location to a much larger space in a CUNY-owned building on the Upper West Side. The institution, CUNY's first new community college in more than four decades, will relocate from Allied Partners' 50 West 40th Street near Bryant Park. It occupies just over 90,000 square feet across eight floors at the property and will leave when its lease expires in 2020. It will move to the CUNY-owned 445 West 59th Street, a roughly 300,000-square-foot property currently home to the John Jay College of Criminal Justice. The move will allow the college to grow from its inaugural class of about 300 students to an enrollment of 5,000. John Jay is vacating the building as the school consolidates and relocates departments among other buildings in the neighborhood, including the new, 625,000-square-foot building designed by down the block at 529 West 59th Street in 2011.

There may be a retail renaissance coming to New York City's privately owned public spaces. The City Planning Commission is voting on a proposal that would change how such space in one area of Manhattan namely Water Street in the Financial District is to be used. The plan would permit retail developments in the "Water Street Subdistrict" in return for improvements such as trees, lighting and bike racks. The Water Street area, in particular, currently holds 19 million square feet of office buildings but little in terms of retail amenities.

Bill Ackman and Adam Flatto's Georgetown Co. unveiled plans for the office redevelopment of an eight-story building on Hell's Kitchen's "Auto Row." Ackman partnered with Georgetown and investment firm Main Street Advisors at 787 11th Avenue, located between West 54th and West 55th streets and currently houses auto dealerships. The partners paid $255.5 million to acquire the building from Ford Motor Co. and are investing another $100 million in renovations. The project will transform the floors above the dealerships into upscale offices.

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