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November 2017

November 2017 » Market Analysis » NY New Developments

November 2017 New York New Developments


New York Major Developments:

New construction starts for nonresidential projects tripled to more than $3 billion due largely to massive undertakings at the Jacob K. Javits Convention Center and the Moynihan Train Hall. The total dollar volume for nonresidential construction starts in New York City jumped to $3.66 billion, a 203% increase from $1.21 billion a year earlier.

Most of the private air rights along the High Line are used. New York City is seeking to sell its own air rights to West Chelsea property owners for $500 per square foot. The Department of City Planning proposed a rule change that will allow property owners in West Chelsea to contribute to an affordable housing fund in exchange for density bonuses. Previously in the district, air rights could only be purchased from properties along the High Line.

Barry Diller’s Pier 55 is back. Under the deal, Diller will resume his efforts to build Pier 55, the litigation against the park will not move forward, and Cuomo will agree to complete Hudson River Park, which runs from Battery Park City to 59th Street, and not allow development at the marine estuary. The park will hopefully be completed by the end of his presumed third term.

Michael Horodniceanu, the former head of MTA capital construction, suggested charging a $1.50/RSF fee on office rents in office space below 60th Street, which generally go for between $60 to $70 per square foot. This would raise more than $1 billion per year.

The developers behind the $1.5 billion Essex Crossing megaproject are about to begin the development’s second phase, which will bring 350,000 square feet of office space to the Lower East Side. Asking rents are projected to be in the high-$80s per square foot to the mid-$90s per square foot.

The Sony Building is getting a $300 million renovation, and the owner Olayan America is hoping for higher rents. Olayan plans to redo 550 Madison and is looking for rents from $115 to $210 a square foot.

A demolition crew has been hired to work on the $2 billion renovation of the Waldorf Astoria soon.

Sheldon Solow the developer is trying to kick out Metropolitan Fine Arts and Antiques, which occupies the ground floor of 10 West 57th Street. Solow is looking to demolish the building and others to make way for a 54-story hotel and condo tower. The tenant claims that its lease does not technically expire until 2023.

Gucci is opening a Soho store in the former Anthropologie space at 375 West Broadway. Gucci rented 10,700 square feet on the ground floor. The asking rent was about $400 per square foot on the ground floor.

Another retail store in Soho closes. Pirch, a try-before-you-buy appliance store, has closed its 32,000-square-foot retail space. Pirch opened in the three-story space at 200 Lafayette Street in May 2016.

From January 2014 to September, construction and renovation starts for private K-12 schools in the city reached more than $948 million.

Commercial real estate sales in the five boroughs have seen a significant drop, as buyers wait for prices to fall. Banks remain eager to refinance assets and few owners are pressured to trade. Average pricing on closed deals continues to rise, a sign that some sellers are feeling more confident. The average price on commercial sales in the first half of 2017 rose 3%, to $570 per square foot.

Hotel room rates and sales prices are also softening as new hotels come online. In the first half of this year, hotel properties sold for an average of $336,000 per room.

The L+M Development Partners megaproject in the South Bronx was officially approved by City Council.. The project, called Bronx Point, will include 1,045 residential units, a food and beverage hall and the Universal Hip Hop Museum.

Mayor Bill de Blasio wants to buy back a former East Village elementary school to prevent it from being turned into dormitories, but the owner won’t sell. Developer Gregg Singer wants to convert 605 East Ninth Street into dorms for Adelphi University, despite strong opposition from community groups and officials.

The New York City Economic Development Corporation has finally found a developer Centaur Properties and Cipriani USA to take over the sublease from the Dermot Company to redevelop the Battery Maritime Building at 10 South Street.

The city wants to build an 11-story 196,000 square foot-building at 149 West 108th Street senior housing facility. The building would contain 195 units, a medical facility, offices, waiting rooms, a dining room and a play room.

The International Center of Photography plans to leave its 27,000-square-foot space at 1114 Sixth Avenue, and also sell its 11,000-square-foot museum at 250 Bowery, now that it has signed a contract at 242 Broome Street. The ICP will purchase two commercial units totaling 40,000 square feet at the base of SHoP Architects-designed building.
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