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November 2013

November 2013 » Market Analysis » NY New Developments

November 2013: NY New Developments

NY New Developments

Harlem's rapid development and emergence as a viable tourist and business destination has suddenly led to a spike in the demand for hotels in the area, so much so that the neighborhood is now short of about 1,500 hotel rooms. Even future growth in the hotel industry will not be able to meet demand. Although two hotels are in the works with a 210-room property near the old Victoria Theater on 125th Street and a 230-room property near Columbia University's West Harlem expansion.

The Landmarks Preservation Commission has recently voted in favor of the Nordstrom tower cantilever, moving Extell Development's plans for 225 West 57th Street forward. Voting 6-1 in favor, the LPC decided that the cantilever would not be an eyesore on the Art Students League of New York building next door.

Sweden is looking to annex Soho's thriving retail scene. At least three Swedish firms have opened on Greene Street in the past year, while the latest store to join the Scandinavian set, outdoor apparel retailer Fjallraven. They have signed a 3,800-square-foot lease at Zar Property's 38 Greene Street.

The Zoitas family-owned Westside Market will soon be opening a fifth location in the East Village near Union Square. The grocer will set up shop in an 18,817-square-foot space in 84 Third Avenue. A sprawling 10,500 square feet on the ground floor will house the store, while an additional 8,317 square feet on the lower level will also be used by the company.

A six-story commercial building is coming to a Chinatown site once occupied by a residential building, which was torn down after a 2009 fire struck the Hong Kong Supermarket next door. The building at 107 East Broadway will hold 11,000 square foot of office space. Peter Poon Architects, has been approached to design it.

A court ordered a delay in the $1.35 billion sale of One Worldwide Plaza to American Realty Advisors. RXR had planned to pay $605 million for a 40% stake in the 1.8 million-square-foot, 59-story Midtown building, partly owned by George Comfort & Sons. RXR was working with American Realty as a joint investor, until American Realty talked directly to George Comfort about going solo on the purchase. George Comfort allegedly made a deal with American Realty instead, prompting RXR to file a lawsuit.

SL Green Realty is changing its strategy at 180 Maiden Lane. The building owners initially thougtht financial tenants to the 1.2 million-square-foot tower, or even convert it to hotel or residential use. Now ownership is looking at attracting tenants from the technology, advertising, media and information industries, known as TAMI tenants. The REIT will add "trendy" flourishes to the building's lobby and convert it into a meeting area.

Top consulting firm Bain & Co. is trading Times Square for Bryant Park. Bain's New York team will move next year from 3 Times Square to a nearly-100,000-square-foot space in Brookfield Office Properties' Grace Building, at 1114 Sixth Avenue.

An eight-unit mixed-use building near the NoMad Hotel has sold for $8.65 million. The 14,739-square-foot property at 15 East 31st Street has five commercial units and three residential units and sold at a capitalization rate of 3.1 percent. The asking price for the property was $8.995 million. The buyer was a European private investment group who did the deal at a "record low cap rate.

Madison Square Garden should be shifted to an alternate site in order to allow Penn Station to expand and to help kick off the revitalization of Midtown West. There are several alternative locations for MSG, including a property near the Jacob Javits Convention Center on 11th Avenue, but no specifics on how such a plan would be funded.

The Empire State Building has officially transferred over to the Empire State Realty Trust for $1.89 billion, far from the $2.2 billion and more that investors offered for the iconic tower before it was packaged into the real estate investment trust.

Tokyo-based Sumitomo Mitsui Banking Corporation has obtained a deal to add 38,249 square feet to its current sublease at 277 Park Avenue. Sumitomo, which also recently picked up a space at 300 Madison Avenue, will pay rent starting at roughly $50 per square foot in a deal through January 2021 for the 15th-floor space. The space is part of the Hartford's 94,331-square-foot sublease from JPMorgan Chase, the Stahl-owned property's largest tenant, for which it pays in the mid-$60s.

Bloomingdale's is expanding its office presence at 919 Third Avenue with a new 47,000-square-foot-plus lease for the entire sixth floor. The deal will bring the department store's total space at the building to 204,442 square feet. The asking rent was $65 per square foot.

Developer Morris Moinian's plans, to raise two mid-rise buildings south of Bryant Park, to make way for a 175-room hotel has been stopped as the restaurant tenant in one of the buildings allegedly won't vacate the premises.

The New York Times is looking to further downsize its space at its Renzo Piano-designed headquarters at 620 Eighth Avenue. The newspaper is looking to lease the single floor that it owns in the 52-story building.

High-end grocer and organic food emporium Whole Foods is deciding over a 36,000-square-foot space in the base of 1095 Sixth Avenue. The spot inside Blackstone Group's glass retail boxes would be a first-of-its-kind concept for Whole Foods, which plans to have a store focusing on prepared foods and eating stations, a more diner-geared enterprise than most of its other spots.

European shoe and accessories retailer Carlo Pazolini is set to grow from a single Soho location to four across Manhattan, thanks to three new leases.

The U.S. Polo Association's flagship store has a new place in the heart of Times Square. The sport's store has selected the 1,250-square-foot space on the ground floor of 1540 Broadway for its visibility.

Record giant Warner Music Group is moving about three avenues west. The world's third-largest record company has taken 288,250 square feet at Beacon Capital Partners and Paramount Group's Paramount Plaza in a deal that is worth $250 million.

Restaurteurs and bar owners looking to open up shops on the Lower East Side no longer have to meet with a block association who are strongly opposed to more booze flowing through the neighborhood. The slam against L.E.S. Dwellers comes from Community Board 3, which is accusing the group of acting inappropriately on its behalf.

SL Green Realty has just signed a commercial law firm to 56,764 square feet at 125 Park Avenue. The firm will take the seventh and eighth floors of the 26-story, 572,705-square-foot tower in a 15-year deal.

Empire State Realty Trust started trading its shares on the New York Stock Exchange after an initial public offering that sold 71.5 million shares for $13 each. The IPO raised $929.5 million for the real estate investment trust, despite a share price that was $1 to $3 cheaper than expectations. The IPO values the stake of the REIT's supervisors at around $460 million. Empire State owns 19 properties in the tri-state area, valued at about $3.2 billion, and is considered by many as an investment with vast growth potential.

Swiss banking giant UBS AG has taken about 120,000 square feet at 787 Seventh Avenue, as part of a move to consolidate its office space in Midtown. Members of UBS' investment banking team will shift out of 299 Park Avenue, where the bank currently has over 46,000 square feet. The bank is reducing its Midtown presence by about 300,000 square feet in an effort to cut head count globally.

GoGoTech, the online retailer that owns, is moving to 1407 Broadway to occupy a 13,701-square-foot space on the seventh floor.

As the clock ticks on Citigroup's 399 Park Avenue headquarters lease expiration, the bank is zeroing in on a new center. Citi has narrowed down the choices to three locations: an existing twin-building complex it occupies at 388 and 390 Greenwich Street in Tribeca, 2 World Trade Center and a Hudson Yards locale on the far West Side.

The fabled toy store FAO Schwarz has placed its flagship retail space in the GM Building, owned by Boston Properties along with investors including Chinese billionaire Zhang Xin, on the sublease market.

WeWork is in talks to sign its largest space, an entire 27-story, 300,000-square-foot 110 Wall Street WeWork would open office space on the lower floors of 110 Wall Street, and in its first foray into the residential market, would rent out residential units on the upper floors.

On 11th Avenue, a long-delayed 420-room hotel project which first got going in 2007 is back on track. The Real estate investor and developer has just secured a loan to close, for a second time, on a Hudson Yards hotel site at 448 11th Avenue.

Google is set to take 360,000 square feet at 85 10th Avenue. The search giant will move into the 540,000-square-foot former Nabisco factory between 15th and 16th streets, between the Chelsea Market and the High Line.
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