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October 2016

October 2016 » Market Analysis » NY New Developments

October 2016 New York New Developments

Major Developments:

The Related Companies is planning a 63-unit mixed-use building at 501 West 18th Street in Chelsea. The 10-story building will contain 97,800 square feet of residential space, along with 10,300 square feet of commercial space that will be divided across two retail units on the ground floor. Related bought the pair of parking lots which are adjacent to the IAC building in 2014 from investors Barry Haskell and Matthew Resnicoff. The $205 million price or $700 per square foot set a record for the neighborhood. The developer secured $125 million in financing for the purchase.

Tishman Speyer filed plans for the Spiral, an office skyscraper that is slated to cost $3.2 billion. Plans filed call for a 2.2 million-square-foot tower, but Tishman Speyer is marketing the property at 2.85 million square feet. The Spiral will rise 65 stories to a height of 1,005 feet, and has an alternate address of 509 West 34th Street. The ground floor will have retail space and there will be about 27,000 square feet of retail, while the second through 62nd floors of the building will be office space.

The group of 53 investors who own the condominium development site at 208 Delancey Street claim American Chengxing Investment failed to meet the closing date. The owners, dubbed the Delancey Bridge Tower Group, bought the former home of T&J Auto Repairs for $8.5 million. The group put the site on the market for $36 million last summer and entered into a contract with Chen on Jan. 6, the lawsuit claims. The investors claim damages of no less than $2.2 million for the alleged breach.

Dean & DeLuca is set to replace Spice Market when the restaurant closes in the Meatpacking district. A few months ago the asking rents for the ground floor was around $700 a square foot.

Blumenfeld Development Group obtained $77 million in financing from the State Housing Financing Agency and AIG for its 232,000-square-foot mixed-use project at 146 East 125th Street. The 233-unit building will contain 34,444 square feet devoted to commercial use on the first two floors.

NoMad is getting another skyscraper. An entity affiliated with Israeli-Russian billionaire Boris Kuzinez filed plans for a 54-story mixed-use tower at 262 Fifth Avenue at West 29th Street. Kuzinez bought the site and two neighboring lots for $59 million. Plans are for a 150,018-square-foot building, including 41 apartments and 10,850 square feet of retail space in the basement, first and second floors.

New office construction started in the first half of this year totaling $1.6 billion, a massive drop from 2015, which had $5.7 billion worth of new projects during the same timeframe. The Building Congress attributes this gap primarily to the Hudson Yards and the far West Side towers starting. This year’s numbers outshine those of previous years, like the first half of 2014, which saw $1.2 billion worth of new construction and 2012, which saw $829 million.

As major hedge funds close down or downsize, the rental growth in trophy office buildings seem to be also fizzling. This slowing demand has caused landlord to increases concessions.

The Port Authority of New York and New Jersey is looking to reduce its Manhattan office presence by subleasing just over 57,000 square feet at 80 Pine Street in the Financial District.

High-end specialty grocery store Hudson Market is opening its second Manhattan location at the rental building Helena 57 West. The farm-to-table store signed a 15-year, 9,889-square-foot lease on the ground and lower level of the 552,239-square-foot building at 601 West 57th Street.

Vornado Realty Trust CEO has offered up another possibility for the future of Hotel Pennsylvania that is apartments and retail. The options for Hotel Penn as of now are leave it as it is or apartments and retail. If it is left as it is, it will be a hotel.

Fashion retailer Bebe is suing Westfield for $10 million, joining other tenants who have been punched back after the World Trade Center shopping complex landlord sued them for not moving into their newly-leased spaces. Bebe, which Westfield sued for $2.5 million for not taking possession of its space and then allegedly defaulting on its lease, filed a counterclaim. According to the lawsuit, Westfield never delivered the retail space to Bebe in the proper condition even after the delivery date was repeatedly delayed. In addition, Westfield did not disclose that it was fighting with the Port Authority, which owns the building, and knew they could not deliver the space when promised.

The Brearley School will expand its campus with a new 12-story building on the East End Avenue of 83rd Street. The all-girls private school won approval for $50 million in tax-exempt bonds to fund the expansion plans. The new building, at 590 East 83rd Street, is adjacent to the school’s current 12-story building and will be 79,000 square feet.

The Lightstone Group is going forward with its plans for a 13-story hotel at 112 East 11th Street and will have 311 rooms totaling 78,361 square feet.

Work on the planned $1 billion Jacob Javits Center expansion could begin by the end of the year. Contractors can now submit proposals to build a three-story utility building that will house electrical generators for the convention center. The Cuomo administration expects to pick a proposal in the fourth quarter of 2016. The administration has narrowed its list of potential contractors with design-build capabilities to redevelop the entire complex down to three firms.

Columbia University’s expects to open two buildings, the Jerome L. Greene Science Center and the Lenfest Center for the Arts, in a 17-acre formerly industrial zone of West Harlem known as Manhattanville. The new campus will start at 125th Street and Broadway and cost $7 billion and grow the school’s campus from 16 million square feet to 23 million square feet.

The de Blasio administration wants to hike the fees that Broadway owners pay when they sell their development rights. Broadway theater owners currently pay $17.60 per square foot into the Theater Subdistrict Fund when they make a deal. The city wants to raise the fee to 20% of the sale or a floor price of $347 per square foot, whichever figure is higher and be adjusted every three to five years.

Saks’ new Brookfield Place outpost is smaller than a traditional department store, at 86,000 square feet (Saks Fifth Avenue is 650,000 square feet). The selection of products at the shop is also highly curated.

The American Museum of Natural History upped its $325 million expansion plans spanning 235,000 square feet. The six-story addition to the landmarked Upper West Side building will now take up less space in Theodore Roosevelt Park, preserving two old trees.

Officials for the long-delayed Ronald O. Perelman Performing Arts Center at the World Trade Center finally revealed renderings for the project, which should open in 2020 with an estimated cost of $243 million to build.

With rents rising a number Manhattan restaurants are moving to new locations. Nobu will move from its Tribeca space to the Financial District in 2017. The Four Seasons Restaurant has left the Seagram Building and is to relocate nearby at 280 Park Avenue. Danny Meyer plans to reopen the shuttered Union Square Cafe on East 19th Street. Restaurateurs looking to renew their long-term leases today may face rent increases by as much as 300%.

The Metropolitan Transportation Authority may soon have the option to buy Grand Central Terminal, but the building’s air rights could stand in the way. The clock starts ticking in 2017. The agency will then have two years to decide whether or not it wants to buy the terminal, as well as tracks along the Harlem and Hudson lines. The city’s Midtown East rezoning proposal could complicate any air rights deal. The current zoning rules only allow transfers to adjacent properties and it is unclear how it would impact the demand and price of the air rights.

Cove Property Group plans to gut renovate the 423,000-square-foot building at 441 Ninth Avenue. The company acquired the building with the hedge fund Baupost Group for $330 million. Cove Property is drawing up a plan to revamp the building by constructing an additional 150,000 square feet of space.

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