New York City office
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November 2016

November 2016 » Market Analysis » NY New Developments

November 2016 New York New Developments

New York Major Developments:

Construction spending in New York City is expected to soar to $127.5 billion by the end of 2018, showing that the building boom still has legs. Predictions that spending will reach $43.1 billion in 2016, a 26% increase from 2015’s construction spending in 2017 is projected to reach $42.1 billion and then $42.3 billion in 2018. Non-residential construction of $17 billion projected in 2016, a 27% increase from last year. Office construction accounts for 20 million square feet of new space will be added over the next five years, much of it in Hudson Yards.

Tishman Speyer filed plans for the Spiral, a 2.2 million-square-foot office tower planned for Hudson Yards. The skyscraper’s name is a reference to the building’s design. It is the largest new development proposed through permit applications. 66 Hudson Boulevard, Tishman Speyer’s planned 65-story office tower is expected to rise 1,005 feet tall and cost about $3.2 billion. Tishman bought the parcels that make up the development site in 2014 for $438 million. In September, Blackrock was scoping out the building for a possible new headquarters as well as 50 Hudson Yards.

Trinity Church revealed plans for a 26-story office building on the site of its scrapped condo project. Officials unveiled the design for the $300 million development at 74 Trinity Place. The design calls for a 310,000-square-foot building that will be linked to the church across Trinity Place.

Anthony Bourdain’s new food market at Pier 57 opening was pushed back two years, causing developers to reach out to replacement operators. Then, the food hall had yet to secure a lease. Now, the food hall is coming, but it is going to be filled with some of the best food vendors from around the world. Much of the market’s vendors are still unconfirmed.

Pebblebrook Hotel Trust and Denihan Hospitality Group have split up their portfolio of six Manhattan hotels that value the properties at a combined $820 million. Pebblebrook, the Bethesda, MD-based real estate investment trust, walked away with the 618-room Manhattan NYC hotel near Madison Square Garden and the 252-key Dumont NYC in Kips Bay. The two properties were valued at $342.5 million. Pebblebrook owns 31 hotels throughout the country, and bought a 49% stake in the portfolio for $152 million in 2011.

Hotel developer Sam Chang is expanding his reach in the Garment District at West 36th Street and Eighth Avenue. They filed plans to replace a one-story retail strip with a 252-key hotel at 523-529 Eighth Avenue. The proposed building would be 24 stories and contain 73,000 square feet. They acquired a 99-year ground lease for the property and paid $27.1 million to Bryant Park-based landlord Joseph P. Day Realty Corp.

A new, 40-story hotel is coming to Chelsea. Barone Management filed plans for a 528-room hotel at 144 West 28th Street and contains 146,000-square-foot. The firm bought the lot which is currently a parking site for $60 million. The seller, Frank Ng, also owns two neighboring parcels at 134 and 136 West 28th Street.

Coffee Bean & Tea Leaf has closed all 12 of its New York City locations. On the Upper West Side, the chain had locations at 77th Street and Broadway, 79th Street and Columbus Avenue and 86th Street and Amsterdam Avenue.

The value of religious groups’ real estate holdings across New York state has increased to $26 billion. New York City has the highest number of religious groups’ tax-exempt properties, with a total value of $12 billion.

The city’s Department of Buildings is forcing Sam Chang to raze most of Christ Church at 338-344 West 36th Street due to zoning rules in the area. The second-floor of the church is setback six feet from the first, the city’s zoning law requires that the facades of new buildings in the area rise at least 80 feet above the sidewalk with no setbacks. The DOB approved plans for the preservation but has since reversed them. Chang is currently working on a compromise, which could include constructing a replica of the second floor and building that atop the existing first floor.

Olayan America is teaming with Parsons School of Design and Swarovski to glitz up the former Sony Building at 550 Madison Avenue. The installation will take up six street-level windows. Fashion students from Parsons worked with Swarovski to decorate the windows which had been empty. Saudi conglomerate Olayan Group closed on its $1.4 billion acquisition of 550 Madison Avenue in May. Chetrit Group and Clipper Equity paid Sony $1.1 billion for the building in 2013. They sold the tower after giving up plans for a condo conversion.

New York University filed plans for a new, nearly 600,000-square-foot building as part of the proposed expansion of its Greenwich Village campus. The 23-story, 588,000-square-foot multi-purpose building at 181 Mercer Street will house the NYU’s athletics center and a performing arts facility, as well as classrooms, dorms and common areas. The facility will be the first of several buildings along Bleecker and Mercer streets included in the campus expansion. The university agreed to construct one building at a time, so as not to overwhelm the neighborhood with construction.

Weinberg Properties pulled off a $65 million construction loan from a Shanghai-based bank for a new office building in Chelsea. Shanghai Commercial Bank provided the loan, which will help pay for the construction of a around 49,000-square-foot building at 534 West 25th Street. The developer plans to build an eight-story office building on the property, which will also include gallery space and a library. The city’s Department of Buildings recently approved Weinberg’s application to demolish the existing one-story building, which was formerly home to Pace Gallery. Weinberg has owned the property since at least 1980.

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