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October 2018

October 2018 » Market Analysis » NY New Developments

October 2018 New York New Developments

New York Major Developments:

The number of extended-stay luxury hotel rooms are on the rise, increasing to 34% over the past five years. Occupancy rates are coming back higher than typical rooms at an encouraging 77%.

Amazon 4-Star opened in Soho at 72 Spring Street and is similar to Amazon Books, but will sell a range of products, all of which must have a rating of at least 4 stars by Amazon customers.

Women-only meeting space provider Luminary is opening its first location in NoMad. The company signed a 15,000-square-foot lease at 1204 Broadway. The 12-year deal spans the third and fourth floors and a rooftop space at the four-story, 21,300-square-foot property. Luminary have set aside the third floor and rooftop as co-ed floors for meetings and presentations.

Competition is heating up for the best views in the city. Developers are planning more observation decks as they look to get in on the attraction’s profits. Related Companies is planning an observation deck at its 1,296-foot 30 Hudson Yards tower in 2020.

The American Museum of Natural History is moving ahead with its $383 million expansion. Community United to Protect Theodore Roosevelt Park filed a lawsuit against the museum and the city, claiming the institution isn’t entitled to the city-owned land needed for the expansion. The museum sits on a plot of the city-owned Theodore Roosevelt Park from 77th and 81st streets between Central Park West and Columbus Avenue. The museum has planned a five-story building named the Richard Gilder Center that would be adjacent to the existing building, scheduled to open in 2021.

Manhattan’s office condo market continued to gain steam in the first half of the year with 34 deals and $237 million in sales. The average price per square foot hit a record $934, up 23% over the five-year average and up 6.7% from the previous record of $875 in 2016’s second half.

The revamped South Street Seaport district will soon be a year-round hub, at least this coming winter. Rockwell Group got approval from the Landmarks Preservation Commission to build a pop-up “winter village” on top of Pier 17 development. The project includes an ice rink, a warming hut, restaurants and cafes. WeWork gained another new lease, signing on for 60,000 square feet at 511 West 25th Street in Chelsea. The co-working firm will occupy floors two to nine of L&L Holding Company and PGIM Real Estate’s nine-story office building.

An eight-story hotel planned for the East Village might not come to the neighborhood. The City Council subcommittee on zoning and franchises unanimously rejected the proposal for the hotel that would be located at 27 East 4th Street next to the neighborhood’s Merchant’s House Museum, which is nearly 200 years old.

Almost a year after Jubao Xie put the world’s tallest Holiday Inn up for sale, the Chinese developer refinanced the property at 99 Washington Street with a $137 million mortgage. Xie developed the 50-story, 492-room hotel in Manhattan’s Financial District with Sam Chang and took control of the property in 2014. The hotel has an occupancy rate of 93%.

Times Square’s NFL Experience will not last beyond the first quarter of the NFL season.
The attraction, which spans 40,000 square feet and includes a 4-D roller coaster theater, will close on Sept. 30 after being open for just 10 months. The project, a joint venture between the NFL and Cirque du Soleil, was not able to meet its financial goals.

Google may open its first long-term store in New York City. The company declined to use an option to terminate its retail lease at 131 Greene Street. Google leased the 5,442-square-foot space in 2014, $2 million in rent per year until 2024.

Stillman Development and its partner, the South Korean financial firm Daishin Securities Co are planning a $100 million makeover and are renovating the long-shuttered Times Square Theater at 217 West 42nd Street to draw in entertainment-focused retailers.

A City Council committee is considering a bill that would entitle commercial retail tenants to a 10-year lease renewal if they meet the terms of their existing contracts.

Microsoft has been looking at a Soho office-and-retail building for a flagship store. As other tech giants expand their operations, Microsoft is looking to do the same. The company looked at leasing at 300 Lafayette Street, taking retail and possibly some office space.

There will be 25 different restaurants and what the developer calls “food concepts,” is expected to open in Hudson Yards as an amenity for the 40,000 employees, plus thousands of tourists and residents, The culinary hub, which will feature 25 different restaurants and what the developer calls “food concepts,” is expected to open in March.

Cadillac is set to vacate its offices at 330 Hudson Street and relocate its global headquarters back to Detroit.

Amazon Go, the mega retailer’s cashierless store, already has half a dozen locations either open or in the works, including one coming to New York City.

Amid sluggish sales, Henri Bendel is closing all 23 of its departments stores. The retailer’s largest space is its flagship at 712 Fifth Avenue, containing 86,000 square feet.

Manhattan’s office condo market is comprised of 10 million square feet, 2% of the city’s total office space.

Top 10 Office Leases.
  1. JPMorgan Chase, the bank, renewed its lease for 270,536 square feet of space at 237 Park Avenue.
  2. Innovo Property Group signed a lease for 270,000 square feet of space at 1132 Oak Point Avenue.
  3. WeWork signed a lease for 258,344 square feet of space at 21 Penn Plaza.
  4. Aetna signed a lease for 106,000 square feet of space at 161 Sixth Avenue.
  5. Carlyle Group signed a 15-year lease for 94,367 square feet of space at 1 Vanderbilt Avenue.
  6. WeWork signed a 15-year lease for 75,000 square feet of space at 1619 Broadway.
  7. WeWork signed a 15-year lease for 69,679 square feet of space at 880 Third Avenue. Apollo Global Management expanded its 15-year lease by 69,000 square feet of space at 9 West 57th Street.
  8. BTIG Partners signed a 15-year lease for 65,000 square feet of space at 65 East 55th Street.
  9. Rosenberg & Estis renewed and expanded its 10-year lease for 51,778 square feet of space at 733 Third Avenue.

The 10 biggest retail leases signed last month totaled 119,900 square feet, down 52,000 square feet from July’s.
  1. Candytopia signed a lease for 24,881 square feet of space at 401 Seventh Avenue.
  2. Shop Fair signed a 15-year lease for 20,000 square feet of space at 2108 Adam Clayton Powell Jr. Boulevard.
  3. The Well signed a 15-year lease for 13,040 square feet of space at 2 East 15th Street.
  4. Fête signed a 16-year lease for 12,063 square feet of space at 231 West 39th Street.
  5. Higher Ground signed a lease for 10,976 square feet of space at 775 Columbus Avenue.
  6. Related Companies signed a lease for 10,627 square feet of space at 505 West 19th Street.
  7. Nili Lotan signed a lease for 7,668 square feet of space at 142 Duane Street.
  8. Sleep Number signed a lease for 7,300 square feet of space at 136 Fifth Avenue.
  9. Champion, the athletic apparel company, inked a lease for 7,121 square feet of space at 434 Broadway.
  10. Café Nunez, a restaurant, renewed its 11-year lease for 6,177 square feet of space at 240 West 35th Street.

More than four years after signing a lease at the Westfield World Trade Center mall, Duane Reade is suing the mall’s owner for failing to hand over the store in “tenant ready condition.”Duane Reade wants the lease to be voided and a refund on the $171,407 it already spent on the deal.

Four years after opening, 20% of 1 World Trade Center remains empty. The Durst Organization, which co-owns the building with the Port Authority of New York and New Jersey, has faced several challenges in filling the tower’s 3.1 million square feet of space, including a slower-than-expected office market, competition from Hudson Yards and a site that has largely felt unfinished.

City officials are working on a proposal to rezone Soho and Noho to allow certain ground-floor retail and residential use in the neighborhoods.

The Blue Man Group’s school is expanding into another building in the Seaport.
The Downtown Manhattan school founded by the Blue Man Group has opened a new location at a building it purchased space in years ago from Billy Macklowe.
The building is blocks away from the school’s other building at 241 Water Street, which will now only serve students in its pre-primary through third grade programs.

The planned park near Hudson Yards would be the city’s costliest. The city plans to spend $374 million on the project, that’s more than $124 million per acre.

Almost a year after WeWork announced their $850 million acquisition of the Lord & Taylor building in Midtown Manhattan, the co-working company still hasn’t closed on the deal and is on the hunt for an equity partner.

The largest project filed for the city last month was at 3875 Ninth Avenue in Inwood. The project comes from Maddd Equities and Joy Construction. It will span around 582,000 square feet and stand 30 stories tall with 614 residential units. The development will include around 66,000 square feet of commercial space, and 20% of the residential units should be affordable.

GDS Development is planning a 22-story, 318-foot tall office building at 1241 Broadway where it signed a 99-year ground lease earlier this year. The project will span around 141,000 square feet with retail on the ground floor. GDS hopes to break ground on the site early next year.

Gap’s lease 60 West 34th Street in Herald Square will not be renewed, adding to a large block of retail vacancy along 34th Street.
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