New Developments
Columbia University may be moving forward with plans for a $6.3 billion expansion after the U.S. Supreme Court rejected an appeal by local businesses whose properties may be subject to eminent domain. The justices refused to question findings by a state development agency and said that the area is blighted and that the expansion has a legitimate public purpose.Several years back, retail giant Walmart tried to open stores in Queens and Staten Island, but backed off after fierce community opposition. Now the discount chain store is trying again to break into the New York City market, since it believes dynamics have changed, with the city becoming more receptive to similar stores like Target and Ikea. Walmart is looking at properties in each of the five boroughs, and hired Mayor Michael Bloomberg's former campaign manager to help organize its lobbying efforts. A site in East New York was under consideration, but opponents of the project fear that Walmart will be bad for smaller local businesses which cannot compete with the retailer's low prices.
The U.S. hotel industry posted improvements across the board last week, with all of the key metrics showing increases in year-over-year comparisons. Occupancy rose 4.7 percent to just under 50 percent, while average daily rates inched up by .5 percent to $96.87. Revenue per available room, or revpar, was up 5.3 percent, to $48.31. Investors are once again taking an interest in the U.S. hotel market after steady improvements in recent months.
JER Partners is to market the $75 million mortgage on Kent Swig's 80 Broad Street, putting the embattled developer at risk of losing the 36-story office building. Swig defaulted on the loan earlier this year, and could lose control of the Lower Manhattan property should a buyer pick up the note and decide to foreclose. This is not the first time that Swig's ownership of 80 Broad Street has fallen into jeopardy. This summer a mezzanine lender attempted to foreclose on the building.
The newly built Courtyard New York Manhattan/Soho opened at 181 Varick Street, between King and Charlton streets in the Hudson Square area. The 20-story Marriott hotel features a fitness center and a business lobby equipped with Wifi, Starbucks and Table 181, a wine bar. The 120-room hotel includes 36 double-bedded rooms and one king suite, with several rooms offering glass-walled views of the Hudson River or the Manhattan skyline.
The developer of the planned brick and aluminum twin condominium conversion in Tribeca is trying to flip the site before the shovels have even hit the ground. Alvaro Arranz, principal of a major Spanish construction firm, bought the warehouse at 401 Washington Street and its neighboring parking garage for $57 million in 2007. Now, after hiring architect Morris Adjmi to design a mirror-image aluminum version of the warehouse on the garage site, and obtaining all of the necessary approvals to carry out the conversion plans, Arranz is hoping a new investor will pony up $65 million to take over and finish the job.
At times, this city can seem like an ocean of distress. Half-built or unsold condos abound. Office buildings dot marginal neighborhoods offering low rents to stay full. Loans secured by real estate are in trouble. Yet, distressed commercial inventory can be elusive, kept off-limits by banks waiting for a full recovery and perhaps mindful that in the last downturn, in the early 1990s, they may have let go of valuable real estate too soon. Nonetheless, some are figuring out how to wrest control of these troubled properties.
Troubled lender iStar Financial has reached a deal with Los Angeles investment firm CIM Group to recapitalize the debt on Trump Soho, the condominium-hotel at 246 Spring Street. iStar has been substantially paid down and all project, indebtedness has been extended as a result of new debt financing.
Extell Development got two steps closer to getting the go-ahead from the city on its 3.1 million-square-foot Riverside Center project, with unanimous approval from two City Council committees. The 'yes' votes by both the Committee on Land Use and the Subcommittee on Zoning and Franchises are hopeful signs for the project as it heads to a final vote by the full City Council later this month.
Waterscape Resort, the owner of the new, 50-story Cassa Hotel and Residences at 66-70 West 45th Street in Midtown is suing its construction firm for $30 million, alleging that the firm never obtained insurance to cover defaults by its subcontractors. Pavarini claims, however, that it did get the insurance and paid hundreds of thousands of dollars in premiums. In June 2007, Waterscape hired Pavarini to build Cassa, which is developed by Assa Properties. Under the agreement, Pavarini was obligated to purchase Subguard insurance to protect against potential default by its subcontractors.
Home Depot is reaping the benefits of Americans' increasing willingness to invest in home improvement projects. The retailer, which reported stronger-than-expected sales last month, upped its predicted earnings for the second time in two months. The company now pegs its expected income for fiscal 2010 to be $1.97 per share, up from its previous estimate of $1.94 per share.
CCLC, a national child care provider, plans to build its first-ever child care center in New York City at 90 Park Avenue, between East 39th and 40th streets. CCLC @ 90 Park Child Care Center is to open in spring 2011, and can accommodate up to 68 children between six weeks to five years old. In addition to backup child care, approximately half of the spaces will be available for regular, full-time enrollment by local families. CCLC is also considering additional backup care center locations downtown and near Columbus Circle.
Pharmaceutical giant Pfizer has paid a $24.7 million penalty to the city for relocating some of its corporate offices to New Jersey and Pennsylvania after receiving tax abatements and other incentives intended to keep jobs in New York. The company originally struck a benefits deal with the city in 2003, when it employed 5,300 people here, and in 2005, asked for more incentives as it increased its New York headcount. But as of this summer, the staff at Pfizer's East 42nd Street global headquarters had fallen to 3,837, down from a peak of over 6,500.
A Greek Orthodox Church destroyed by debris from the Sept. 11, 2001 terrorist attacks is suing the Port Authority of New York and New Jersey over a failed deal to rebuild its home. In the claim, leaders of the Church allege that the agency engaged in arrogance, bad faith and fraudulent conduct when it withdrew in March from negotiations over a 2008 rebuilding agreement, citing excessive demands by the church.
Law firm Winston & Strawn has inked a deal to renew and expand its New York City offices at 200 Park Avenue. The 280,000-square-foot lease is likely the second-largest for a law firm this year, behind Proskauer Rose's 400,000-square-foot lease at 11 Times Square. Winston & Strawn, whose clients include Goldman Sachs, Bank of America and Ernst & Young, has been located in the building since the mid-1990s, and this deal represents one of several expansions for the firm since then.
Lender Deutsche Bank is not expected to accept the full payoff of the defaulted loan on 3 Columbus Circle. Developer Joseph Moinian bought 3 Columbus Circle, also known as 1775 Broadway, in 2004, refinanced it two years later with a $250 million loan, and then defaulted on the mortgage earlier this year. In September, Related Cos. bought the $250 million mortgage and moved to foreclose on the property, intending to destroy it and create a larger building.
Foreign exchange market brokerage FXDD has moved to a new office at 7 World Trade Center. The firm, which was previously located at 75 Park Place, signed a 13-year lease for the 40,000-square-foot office. FXDD has already moved into the new office to accommodate its growing roster of employees.
Facebook has inked a deal to lease two floors at Milstein Properties' 335 Madison Avenue, the former Biltmore Hotel, between 43rd and 44th streets, and could expand to as much as 150,000 square feet there. That's enough to house up to 600 employees, at a time when the social network is reportedly getting ready for an aggressive hiring push for new advertising sales representatives in the city. Currently, the company has 15 open positions in New York and a 5,700-square-foot office in Midtown that's already overcrowded.
In the largest lease deal of the year, Paris-based financial firm Societe Generale agreed to take up to 560,000 square feet at 245 Park Avenue, moving east from offices on Sixth Avenue in Rockefeller Center. And also last month, Natixis, a Paris- and Boston-based money manager, signed a 16-year deal for 182,200 square feet on the third, fourth and fifth floors at 1251 Sixth Avenue. The actual starting rent was $59 per foot, and included $60 per foot in landlord improvements and 12 months of free rent.
Gene Kaufman, the founder of Gene Kaufman architects, is currently working on several new projects, including a Hyatt hotel in Union Square, a Marriott Courtyard at 35th Street in the old Atlantic Bank Building, a Holiday Inn on Delancey Street and a Holiday Inn Express in the West 40s.
The last few months have brought several new stores to the trendy Soho neighborhood. The American Eagle Outfitters flagship store at 599 Broadway . The Kardashian sisters opened a new clothing boutique called Dash at 119 Spring Street. More than 20 stores have recently opened up in the area, from indie boutiques like Wendy Nichol at 147 Sullivan Street and Realm at 98 Greene Street, to global brands like Chanel, which renovated its location at 139 Spring Street, Moncler at 90 Prince Street and AllSaints Spitalfields at 512 Broadway.
Bloomberg LP is seeking an additional 300,000 square feet near its headquarters at 731 Lexington Avenue and East 59th Street, which would expand its current space by one third. The company already rents nearly 900,000 square feet at 731 Lexington Avenue, but there is no more room available at the 1.3 million-square-foot property, which is owned by Vornado Realty Trust. Over the last year, the company has added close to 500 lawyers. It was unclear where Bloomberg was looking but sources said there is a large block of space available at 601 Lexington Avenue, a Class A building owned by Boston Properties.
A renovation is underway at the Battery Park City Regal Cinema in the Embassy Suites Hotel, owned by Goldman Sachs. The box office and entrance to the theater are being moved to the second story, and the newly vacant space will be absorbed back into the hotel. Embassy Suites is also being redesigned. The hotel is slated to close in early January for a gut renovation that will transform it into a Conrad Hilton.
Industry expert’s battle proposed mortgage interest deduction changes Industry leaders are riled over a federal proposal to overhaul the mortgage interest tax deduction. The deduction, which allows homeowners to deduct interest on their mortgages of as much as $1 million, would be curtailed under the proposal. Among the changes would be a $500,000 mortgage cap and a 12 percent non-refundable tax credit made available to all. The panel, which has been tasked with reducing the national deficit by $4 trillion over the next decade, said that the tax deduction could be siphoning too much cash out of federal coffers.
City officials and developer Alexandria Real Estate Equities unveiled a new, 310,000-square-foot science park today at 450 East 29th Street, the first of the collaborators' three planned life science facilities for a vacant stretch of land along First Avenue. The Alexandria Center for Life Science, located on a three-acre, city-owned site, has benefited from millions in city, state and federal funding.
A new rezoning plan organized by the Department of City Planning and Manhattan Borough President Scott Stringer is taking shape in West Harlem, where an expansion in Manhattanville by Columbia University is underway.
The saga of the Second Avenue Subway continues, and this time it's not only struggling businesses worried about their livelihood or residents being temporarily displaced from their homes. The owner and residents of the Yorkshire Towers, a rental complex at 305 East 86th Street, filed suit yesterday to force transit officials to justify planned entrances for the Second Avenue Subway in front of their building. Yorkshire Towers Co. and the Yorkshire Towers Tenants Association say the proposal means nearly 9,000 commuters will flood the sidewalk during the morning peak hour for entry and exit at the building.
A team of investors led by Todd Lippiatt of Aristone Realty Capital has come to the rescue at 245 10th Avenue, the 11-story condominium near the High Line that had been facing a foreclosure action and several lawsuits. The investors have bought out the debt holders at the property, including Citigroup and Hudson Realty Capital, which had filed to foreclose on their $43.3 million mortgage last March. Now, with the foreclosure action withdrawn, and the lawsuits, filed by contractors over allegedly unpaid work, settled, the project is on schedule to debut in the spring.
A high-end residential development in Greenpoint that was funded in part by basketball great Magic Johnson and that failed as a condominium but survived as a rental was sold in bankruptcy for $58.2 million. Brooklyn investors Chaim Gross, Martin Friedman and Joseph Brunner signed a purchase agreement for the 130-unit property known as Viridian, at 110-130 Green Street between Franklin Street and Manhattan Avenue.
The city is seeking to lure a "top caliber academic institution" to open a new graduate engineering school campus with the promise of as much as $100 million in real estate and other public contributions. The city is concerned that it is falling behind its peers in attracting technology start-ups and may offer up properties like the former hospital sites at the Brooklyn Navy Yard and Roosevelt Island.
William Beaver House, the André Balazs-designed Financial District condominium that was just bailed out by the Los Angeles-based CIM Group, is going partially rental under its new ownership. The 333-unit tower, which had been facing a foreclosure lawsuit prior to the takeover, was part of a three-piece deal in which CIM agreed to buy the debt on two troubled Sapir Organization buildings (Trump Soho and Beaver House) and take an equity stake in another (11 Madison Avenue). CIM purchased the loan on over 200 unsold condos at the Beaver House and subsequently took ownership through a deed-in-lieu of foreclosure.
A Joseph Moinian-Stephen Ross battle for tenants may be underway, with Moinian planning to build a new office tower just north of Related Companies' $15 billion West Side rail yards development, which is currently seeking office tenants. Although Moinian hasn't divulged too many secrets about his new development, set to break ground on 11th Avenue between 34th and 35th streets, he did say he plans to begin marketing the 1.6 million-square-foot tower. While the timing of Moinian's announcement may be brushed off as mere coincidence, the developer said he'd been planning the project for five years. The Related CEO has been angling to foreclose on Moinian's 3 Columbus Circle office building.
Negotiations have resumed between the U.S. Postal Service and the New York City Department of Education, in a deal that would turn the Peck Slip Post Office in Lower Manhattan into a 400-seat elementary school. The postal service first entered talks with city officials to sell the property this past summer, after putting the 70,800-square-foot building at 1 Peck Slip between Pearl and Water streets on the market in the spring. But negotiations deadlocked and the proposed sale, which officials say could help alleviate Lower Manhattan's overcrowded schools, appeared to be in jeopardy.
Brooklyn Borough President Marty Markowitz has officially thrown his support behind a proposed "Skyscraper Historic District" designation for Downtown Brooklyn, with a handful of modifications. Markowitz said he would omit the 75 Livingston Street co-op building from the district, as the co-op owners have requested, and also said he'd continue a planned retail conversion for a portion of the Borough Municipal Building, one of the protected structures in the landmark plan. Community Board 2 has already voted in support of the plan, which would protect several of the neighborhood's most notable buildings, including Borough Hall.
In keeping with Mayor Michael Bloomberg's recent initiative to bolster the research science industry in New York City, the mayor's office announced a new effort to bring an engineering campus to the city. The initiative is to bring a new, state-of-the-art applied sciences research school to the boroughs, something he believes would help develop a 21st-century innovation economy. The city is prepared to make a capital contribution of an undisclosed amount toward the development of this campus.
The Related Companies is plowing ahead with its preliminary construction work at the 26-acre West Side rail yards site, between 30th and 33rd streets, 10th Avenue and the Hudson River, which it ultimately plans to transform into a massive office, retail and residential destination. The developer is hiring a contractor to demolish the 60,000-square-foot former metal products distribution center that stands on the site of its first new rail yards building, an 800-foot tower with 1 million square feet of office space and 25 floors of apartments.
U.S. foreclosure activity dropped to its lowest level in nearly two years in November, as the country's biggest lenders put the breaks on their proceedings amid allegations that they'd been taking over properties without properly verifying the paperwork. The country's 262,399 foreclosure filings represent a 21 percent month-over-month and a 14 percent year-over-year decline, the largest in almost six years by both measures. In New York City, there were 863 foreclosure filings last month, down 41 percent from the 1,466 filings recorded in October and 56 percent from the 1,949 filings in November 2009.
The Port Authority of New York & New Jersey has hit the halfway point on the construction of 1 World Trade Center, the 3 million-square-foot skyscraper being erected on the former site of the Twin Towers. Currently rising 52 stories, the 1,776-foot, Skidmore, Owings and Merrill-designed tower will eventually be New York City's tallest.
Jay-Z has reached a settlement with his lenders over the site of a planned boutique hotel near the High Line and has deeded the property back to them for the value of the senior mortgage. The hip-hop mogul, whose given name is Shawn Carter, had partnered with real estate investors Charles Blaichman and Abram Shnay to purchase the site, a former Time Warner Cable warehouse at 511 West 21st Street, in 2007. The property was to become the first of many J Hotels, but the plan was foiled when the partners defaulted on their $52 million senior loan in August 2009, prompting a legal battle over their interest payments.
Tenants at Stuyvesant Town and Peter Cooper Village allowed a year-long freeze on their landmark class-action lawsuit regarding rent overcharges to expire, but warned that a settlement was not likely before the end of the year, which could lead to a resumption of the case.
A joint venture between Fisher Brothers, BlackRock and a California pension fund won the 95-unit Upper West Side apartment building Park Columbus with a bid of $48 million in a bankruptcy auction. In March, embattled developer Yair Levy lost the building located at 101 West 87th Street that he had tried to convert to condominiums, in foreclosure to Garrison Residential Funding. The mortgage and other debts totaling $52.6 million will be wiped out once the closing occurs.
HSBC is restarting foreclosures in New York State after a nearly two-month reprieve. The bank, along with peers like Bank of America, JPMorgan Chase and Wells Fargo, had halted foreclosure proceedings, revealing widespread errors in foreclosure documentation. HSBC is the first major bank it owns, around one-tenth of New York mortgages to restart proceedings since then (BofA has announced that it will resume foreclosures for vacant non-owner-occupied properties next month).
A new $342 million package of grants approved by the New York State Homes and Community Renewal will help build three Brooklyn developments and will preserve 541 units of affordable housing, while creating jobs and stimulating the local economy. The three Brooklyn projects: 25 Washington Street in Dumbo and Downtown Brooklyn's 388 Bridge Street Apartments and 29 Flatbush Avenue will each receive a portion of the funds and will have units set aside for low-income tenants.
Details of the New York Aquarium's planned $150 million renovation have emerged, with the project set to be completed in 2015. The aquarium, which attracts roughly 750,000 visitors a year at its Coney Island spot on the corner of Surf Avenue and West 8th Street, will receive a new, glimmering facade in the development, as well as a new 50,000-square-foot shark attraction.
A year after Thomas and Frederick Elghanayan formed TF Cornerstone, breaking off from their brother Henry and the Rockrose Development Corporation, Frederick, 62, opened up about the young company's success so far. People said it was impossible to get construction financing, but we've had a lot of interest in banks giving us construction money. TF Cornerstone broke ground three months ago on a 41-story, 380-unit apartment building in Long Island City with the foundation slated for completion in the next two weeks. The company also gave foundation orders last week for another New York City building.
SouFun Holdings, , plans to spend $46 million to acquire the former training center of American International Group in Manhattan, with the purchase expected to be close in the first half of 2011. The training center includes a 250,000-square-foot building at 72 Wall Street. SouFun, said it will partner with selected universities and colleges in the U.S. to train its expanding management, staff and clients in the former AIG center.
Extell Development plans to start with its 34-story International Gem Tower building in March with or without a construction loan. The developer's equity partners in the project have agreed to invest the funds needed that many lenders have shied away from in recent years. The Diamond District commercial condominium currently has 150,000 square feet worth of commitments from buyers, which works out to around 20 percent of the building.
Pace University has signed an agreement with SL Green Realty for a 24-floor residence hall to be constructed at 180 Broadway.
Discount department store Daffy's has signed a lease for 28,000 square feet in the former New York Times building in Times Square, in a coup for Africa Israel USA, which had been struggling to find tenants there since it purchased the property at the height of the market. Last year, the company changed course at the 750,000-square-foot building, at 229 West 43rd Street, moving to convert it into retail space, a hotel and condominiums.
Silverstein Properties has delayed its scheduled sale of $1.3 billion in tax-exempt Liberty Bonds to finance the first of the developer's three office towers at the World Trade Center until the bond market stabilizes. The municipal bond market has been erratic in recent weeks as borrowers have rushed to take advantage of the federal Build America Bonds subsidy program, which may expire soon without an extension from Congress. With an expected completion date of 2013, the 4 World Trade Center project has already risen through the 10th floor but needs the bonds to fund the rest.
Ailing Anglo Irish Bank underwrote hundreds of millions of dollars in real estate debt in New York during the boom and is now unloading a $51.5 million mortgage secured by a package of apartment buildings in Upper Manhattan, owned by Vantage Properties. Anglo Irish, based in Dublin, is in financial distress after billions of dollars in global real estate loans went bad. Ireland's central bank, which provided financing for projects such as the Apthorp and 225 Rector Street, is winding down operations. Demand for note sales is higher than for actual properties.
