New York Major Developments:
New York City’s hotel market had a better-than-expected first quarter in 2018, with revenue per available room growing 7.4%.Warehouse space is at its tightest level since the first dot-com boom, and it’s driving business. The second quarter saw availability fall to 7.2%, the lowest level since 2000, as demand continues to outpace supply.
Hotel and condominium developer Lightstone Group plans to build a fourth Moxy Hotel in Manhattan at the site of a lighting store in the Bowery. Lightstone is in contract to acquire the building at 151 Bowery from Emmut Properties.
Chinese insurers, conglomerates and other investors have become net sellers of U.S. commercial real estate. Following Beijing’s tightening of capital controls, Chinese investors sold $1.29 billion worth of U.S. commercial real estate in the second quarter. The pullback could slow down growth in the U.S. real estate market.
The food and beverage industry was the most active in the second quarter, with 97,338 square feet worth of leases across 29 deals. Apparel was in second place with 74,888 square feet across 14 deals.
Madison Realty Capital has loaned McSam Hotel Group $38 million for his Midtown project at 525 Eighth Avenue. Chang is building a 28-story building on the site that will span 106,827 square feet and include a 320-key Radisson hotel.
Flag Luxury Group landed a $250 million loan for a planned Ritz-Carlton hotel in NoMad. The building will be constructed on two adjacent parcels with the addresses 1185 Broadway and 29 West 28th Street. Flag Luxury filed permits for the property in 2016, with plans calling for a 164,400-square-foot building with 145 rooms. Construction is currently underway.
Thor Equities has relinquished its ownership of 1231 Third Avenue, giving control of the building to SL Green Realty. The real estate investment trust had held a mezzanine loan against the building, although it was unclear how large this loan was and how long Thor had been in default on it.
A company controlled by Qatar’s ruling family landed a $290 million loan for the 689-key Manhattan at Times Square hotel. At the time of the purchase, the company was rumored to be eyeing a full demolition of the building to build a 900,000-square-foot tower. The property continues to operate as a hotel.
The Flatiron Building, one of New York City’s oldest and most iconic skyscrapers, is available for lease and two of the world’s largest flexible-office companies are bidding to move in. WeWork and London-based The Office Group will go head-to-head on the 180,000-square-foot building, which would serve as an enticing location for co-working spaces.
When eager Chinese citizens invested in the Times Square Edition Hotel through the EB-5 visa program around four years ago, they expected to secure green cards within five years. But the controversial program, which has brought billions into New York City real estate projects, is facing a major backlog in applications that has driven up wait times. Some Chinese investors, now facing waits as long as 15 years, have enlisted American attorneys to help them get their money back. A trend that could disrupt a source of financing that has become vital to developers.
Nonprofit group Volunteers of America landed a $56.6 million loan for a planned senior housing complex in the South Bronx. The site was previously used as a parking lot.
The co-working craze may soon hit its peak in Manhattan. The market is getting more fragmented as some hybrid models and different providers get into the space.
There has been a flurry of hotel investment-sales deals in the city lately, including a Qatari hospitality group’s $600 million purchase of the Plaza Hotel and Rotem Rosen’s $162 million purchase of the Hotel Indigo. Some hotels like the W Union Square and the James hotel traded at a loss.
Discount retailer Five Below is opening its first Manhattan store at 530 Fifth Avenue. The store will be about 10,800 square feet, larger than the average store’s size of around 8,000 square feet.
July’s top office leases had more square footage than June’s. The top 10 office lease deals totaled 2.5 million square feet, greater than June’s 1.7 million square feet.
1. 1199 National Benefit and Pension Funds inked a lease for 455,461 square feet of office space at 330 West 42nd Street.
2. Evercore, the investment firm, renewed and expanded its lease for 350,000 square feet of office space at 55 East 52nd Street.
3. Pfizer, the pharmaceutical company, inked a five-year lease for 350,000 square feet of office space at 219 East 42nd Street.
4. J. Crew, the clothing brand, signed a lease for 324,658 square feet at 225 Liberty Street.
5. LinkedIn, the professional social network, renewed and expanded its seven-and-a-half-year lease for 312,947 square feet at 350 Fifth Avenue.
6. Discovery, the marketing consultant firm, renewed its lease for 190,000 square feet of space at 850 Third Avenue.
7. Spell, the tech startup, signed a lease for 181,550 square feet at 2 Gansevoort Street.
8. McGraw-Hill, the education company, inked a lease for 136,176 square feet at 1325 Sixth Avenue.
9. Wolters Kluwer, the publisher, signed a lease for 130,000 square feet of office space at 28 Liberty Street.
10. Spaces, the co-working company, signed on for 100,613 square feet of office space at 287 Park Avenue.
2. Evercore, the investment firm, renewed and expanded its lease for 350,000 square feet of office space at 55 East 52nd Street.
3. Pfizer, the pharmaceutical company, inked a five-year lease for 350,000 square feet of office space at 219 East 42nd Street.
4. J. Crew, the clothing brand, signed a lease for 324,658 square feet at 225 Liberty Street.
5. LinkedIn, the professional social network, renewed and expanded its seven-and-a-half-year lease for 312,947 square feet at 350 Fifth Avenue.
6. Discovery, the marketing consultant firm, renewed its lease for 190,000 square feet of space at 850 Third Avenue.
7. Spell, the tech startup, signed a lease for 181,550 square feet at 2 Gansevoort Street.
8. McGraw-Hill, the education company, inked a lease for 136,176 square feet at 1325 Sixth Avenue.
9. Wolters Kluwer, the publisher, signed a lease for 130,000 square feet of office space at 28 Liberty Street.
10. Spaces, the co-working company, signed on for 100,613 square feet of office space at 287 Park Avenue.
A spate of Manhattan’s finest eateries closed temporarily or permanently due to a range of property damage-related incidents in the first six months of the year.
The 10 biggest retail lease deals signed last month totaled 516,800 square feet, up about 352,000 square feet from May’s total of 165,000 square feet.
1. Toyota renewed its lease on 300,000 square feet of space at 660 12th Avenue, which it currently uses as a showroom and parking lot.
2. TeamLab | Pace Gallery, signed a lease for a 55,000 square foot gallery at 51 34th Street.
3. Target, signed a lease for 50,000 square feet of retail space at 5200 Kings Highway.
4. American Multi-Cinema, signed a 15-year lease for the roughly 43,000-square-foot theater at 2318 Broadway.
5. Showfields, 11 Bond Street, inked a lease for all 14,707 square feet.
6. Pip’s Island, 407 West 42nd Street, signed a lease for a 12,346 square foot performance space at 407 West 42nd Street.
7. RPM Underground, signed a 15-year lease for 11,800 square feet 250 West 54th Street.
8. Artists & Fleas, 568 Broadway signed a lease for 10,251square feet of retail space at 568 Broadway.
9. Wholesale Organic Market, signed a lease for 10,000 square feet at 801 Fourth Avenue.
10. The Stand, signed a lease for 10,000 square feet at 116 East 16th Street.
2. TeamLab | Pace Gallery, signed a lease for a 55,000 square foot gallery at 51 34th Street.
3. Target, signed a lease for 50,000 square feet of retail space at 5200 Kings Highway.
4. American Multi-Cinema, signed a 15-year lease for the roughly 43,000-square-foot theater at 2318 Broadway.
5. Showfields, 11 Bond Street, inked a lease for all 14,707 square feet.
6. Pip’s Island, 407 West 42nd Street, signed a lease for a 12,346 square foot performance space at 407 West 42nd Street.
7. RPM Underground, signed a 15-year lease for 11,800 square feet 250 West 54th Street.
8. Artists & Fleas, 568 Broadway signed a lease for 10,251square feet of retail space at 568 Broadway.
9. Wholesale Organic Market, signed a lease for 10,000 square feet at 801 Fourth Avenue.
10. The Stand, signed a lease for 10,000 square feet at 116 East 16th Street.
Manhattan office leasing at the midway point of 2018 is slightly ahead of where it was this time last year. Through the first six months of the year, Manhattan recorded 17.90 million square feet of new leases and renewals.
Leasing activity in 2017 was at its second-highest level in more than a decade, and 2018 has the potential to top last year’s total. But velocity will need to remain robust in order to absorb millions of square feet of new supply set to come online in the next few years.
Jonathan Rose Companies’ and L+M Development Partners’ mixed-use building in East Harlem was the biggest project filed by almost 200,000 square feet. The development at 1681 Madison Avenue will span about 346,000 square feet and is part of the companies’ even larger Sendero Verde project.
British grab-and-go food chain Pret A Manger is closing three stores in Manhattan. It is necessary to close these three New York locations whose rents made them unlikely to be profitable: 125 Chambers Street, 437 Fifth Avenue and 38 West 48th Street. Panera Bread and Maison Keyser have also recently closed Manhattan locations.
A nonprofit focused on helping homeless youths is planning a 60-unit building in Hudson Yards. Covenant House filed plans for a 12-story building at 460 West 41st Street.
708 Third Avenue is becoming 10 Grand Central. Marx Realty, which has owned the property for roughly a decade, is moving the building’s primary entrance to 44th Street, as part of a $45 million repositioning that includes shaking the tower’s connection to Third Avenue.
