Manhattan New Developments
Cornell University, in partnership with Technion-Israel Institute of Technology will build a 2 million-square-foot applied science and engineering campus on Roosevelt Island. Atlantic Philanthropies a charitable organization founded by billionaire Charles Feeney made the $350 million gift to go towards the creation of Cornell University's 2 million-square-foot applied science and engineering campus on Roosevelt Island. Feeney, who made billions of dollars through co-founding the Duty Free Shoppers Group, graduated from Cornell's School of Hotel Management in 1956, and has been consistently making donations to his alma mater.Brooklyn politicians were still hoping on another phrase the mayor uttered during the press conference. Bloomberg said he was still in talks with three other universities and could award grants for another graduate science school. Brooklynites hope that award goes to NYU so it can build a school at the Metropolitan Transportation Authority's 370 Jay Street in Downtown Brooklyn.
Work has commenced on a $350 million medical campus at 1500 Waters Place in the Bronx, is being developed by Spector Group. The campus will receive the silver level of LEED certification. The six buildings rest on more than 50 acres. Spectator is spearheading the project on behalf of the Dormitory Authority of the State of New York, the New York State Office of Mental Health and the Bronx Psychiatric Center.
The Port Authority of New York and New Jersey's AirTrain to Kennedy International Airport has played a big role in reviving downtown Jamaica. Jamaica was the city's third largest shopping district, but rapidly deteriorated in the years since the 1950's. While most AirTrain passengers use Jamaica only as a transfer point, enough of the 3.9 million people that pass through the terminal stay in the area to support at least three new hotels and a growing number of brand-name stores and restaurants.
Fitch Ratings said it downgraded a pool of $4.53 billion in commercial real estate loans from JPMorgan Chase, led by the Belnord. The Belnord loan, the biggest contributor to losses in the pool, at 7.9 percent, was harmed by the recent decision that affirmed the controversial Stuyvesant Town ruling that New York City landlords would have to refund rent overcharges in buildings that received J-51 tax benefits. The ruling effectively means that landlords cannot raise rents on rent-stabilized apartments to market rates, and if those units were illegally converted, the tenants can get reimbursed for past overcharges.
A Fairfield Inn, a division of Marriot, will rise at the site, at 30 Fletcher Street, near the South Street Seaport. Just a block from the South Street Seaport historic district, the hotel will be designed by Peter Poon Architects, and should be open by 2013. Excavation has begun at the tiny lot, which measures 32 feet by 93 feet.
Commercial owners may face significant hurdles refinancing in the coming year as most of the five-year mortgages used for commercial properties when the boom was at its height will be coming due next year. For example a venture that includes Goldman Sachs' Whitehall funds has a $203 million mortgage on the Park Central Hotel, at 870 Seventh Avenue between 55th and 56th streets, that matured in November. Despite being current on the mortgage, the group was unable to refinance, and is asking the lender to accept a discounted payoff on the loan.
The Out NYC hotel's is the NYC first gay hotel. The hotel opening isn't slated till summer 2012. The hotel, which according to its website is a "straightfriendly" boutique hotel spanning 70,000 square feet, will have 105 rooms, a nightclub, a 5,000-square-foot wellness center, courtyards and a 24/7 cafe & restaurant. Parkview Developers announced in July that the hotel was under construction, at 510 West 42nd Street, between 10th and 11th avenues.
Since announcing bankruptcy and the closure of all its stores last month, bargain clothing retailer Filene's Basement has been having liquidation sales set to run through next month.The Union Square store, at 4 Union Square South, will be closing for good. In total, 25 Syms locations and 21 Filene's Basement stores are set to shutter, with closings occurring next month, after the liquidation
Developer Sheldon Solow has obtained a $625 million loan on 9 West 57th Street from Deutsche Bank, to provide financing for the property. The loan refinances debt set to mature in February that Solow took out at the height of the bubble in 2007. About $55 billion of property loans are set to come due in 2012, and $19 billion of them were originated at the height of the bubble. But most of them will struggle to refinance, as property values have decreased about 42 percent from the peak. In this case, several parties competed for Solow's refinancing because of the location and prestige of the building, exemplifying the demand for prime buildings.
With more than 600 stalled construction sites currently blighting the city thanks to the recession, developers have begun renting out their vacant lots, sometimes free of charge, to ventures that can lure foot traffic to the area. The developers hope the increased traffic will improve the neighborhood -- and sales and leasing figures -- in advance of their projects breaking ground. For example, Alexandria Real Estate Equities has fostered a farm on the stalled site of the second Alexandria Center for Life Science tower. Chef Tom Colicchio's adjacent restaurant Riverpark uses produce from the farm, a set-up that has attracted interest to what would otherwise be a construction fence.
Not only is the high-end of the Manhattan housing market healthy, but in some respects it's performing just as well as it did during the market's peak. Eight deals worth more than $30 million have been recorded this year, including Sanford Weill's recent $88 million sale. Further, the $6,000 per square foot price point that was noteworthy even in 2008 has become somewhat more commonplace. The astronomical prices are buoyed by a shortage of ultra-luxury apartments as the world's wealthiest people are moving assets right now
Korea's Kumho Investment Bank is facing litigation from a former developer of 70 Pine Street, in a battle that could threaten the scheduled sale of the building. Sciame Development filed a $7.7 million suit in state Supreme Court Dec. 19, alleging breach of contract after KIB hired it to take over as developer of the Pine Street project, at the former AIG headquarters, from Youngwoo & Associates, but failed to pay the company millions of dollars after deciding in June to sell the property to a partnership that included Ronnie Bruckner and Metro Loft Management, which is led by Nathan Berman. Sciame asked for a temporary restraining order that would withhold $7.7 million in proceeds from the sale.
Developer Lincoln Equities Group is proposing to build 2,300 residential units, a park and a supermarket along the East River in Astoria. The proposal, dubbed Hallets Point, calls for seven towers with 1,900 market-rate units and 400 units reserved for affordable housing. It's slated to begin the public review process next year. The project has received strong support from the community for the new residents, supermarket and other amenities it could bring to the neighborhood
The Davos, a ground-up condominium project near Herald Square, is close to getting its offering plan approved and will hit the market immediately after. Located at 143 West 30th Street between Sixth and Seventh avenues, the Davos has 15 stories comprised of 24 one-bedroom apartments below two duplex penthouses. There are two units per floor, each measuring approximately 700 square feet with its own balcony. Prices will start at $895,000 but have not been finalized for upper-floor units. There's also a ground-floor commercial space.
Two Trees recently finished leasing up its 103-unit rental at 25 Washington Street in Dumbo, where all 80 of the market-rate units were rented in four months at prices of roughly $50 per square foot. At JMH Development's 184 Kent Avenue, a Williamsburg warehouse converted into a 340-unit rental building, leasing was completed within 10 months.
Growth has finally hit a roadblock as space is becoming scarce in Dumbo. The cheap commercial rents and loft space appealed to startup firms. Now, more than 100 such companies are based in Dumbo and the industry employs the most workers in the neighborhood. The leaders are Etsy, which added 100 employees in 2011 to bring its total to 250, and Huge, which has 400 employees.
A new nursing home projects is ready to move forward thanks to a land swap that could prove most profitable for developers Joseph Chetrit and Laurence Gluck. Chetrit and Gluck closed on the deal to give a lot on 97th Street between Amsterdam and Columbus avenues to Jewish Home Lifecare in exchange for the agency's four-building campus that occupies most of the block nine streets directly north and another building on 105th Street. The developers will also give $35 million to Jewish Home
Manhattan's department stores are under siege, as shoppers increasingly choose to go online. In response to that and mega-stores like Uniqlo and Top Shop opening throughout the city, old-school department stores -- like Saks, Bloomingdale's, Macy's, Barneys and Lord & Taylor -- have effectively doubled down, upgrading stores to the tune of a half-billion dollars. Indeed, last month Macy's announced a planned $400 million renovation to its Herald Square flagship. Over the past few years, department store sales have fallen nationwide, forcing these stalwarts to fight over a smaller share of the pie. As a result, sources say, when one store upgrades, it often creates a "copycat" effect among others who are fearful of looking dated.
With financing conditions extremely tight, New York City developers have increasingly turned to the EB-5 program, which gives foreign investors visas in exchange for investment in job-creating projects, to land funding for their projects. Developers are bending the rules to make their projects more attractive for those foreign funds, and taking money away from other projects that need the funding. The minimum investment to qualify for a visa under the program has always been $1 million -- but the threshold is reduced to $500,000 if the project is in a rural area or a community where unemployment is 50 percent greater than the national average. For example, though Extell Development's $750 million International Gem Tower is rising in the diamond district, one of the wealthiest areas in the country, it uses unemployment data from Times Square to justify receiving $500,000 investments. Similarly, the Battery Maritime Building project and Forest City Ratner's Atlantic Yards bend census areas to warrant designations as projects in areas that need help attracting jobs.
SL Green Realty has pulled 711 Third Avenue from the market three months after to marketing the property.The landlord changed its mind after not receive offers in the range of $200 million to $225 million that it had expected for the 580,000-square-foot office tower between 44th and 45th streets. SL Green owns the leasehold and a 50 percent interest in the ground beneath the building.
South Street Seaport leaseholder Howard Hughes Corp. unveiled plans to the local community board to replace the mall that currently sits on Pier 17 with a three-story glass retail building. "You can't just be doing one building without knowing what your master plan is for the rest of the pier," said John Fratta, chair of Community Board 1's Seaport Committee. "I'm willing to bet there is going to be a high-rise in the future."
Jared Kushner's Kushner Companies has completed a refinancing of its tower at 666 Fifth Avenue with Vornado Realty Trust. Vornado is injecting $80 million of equity into the project in return for a 49.5 percent stake in the tower, while Kushner will also contribute $30 million to the refinancing. Under the agreement, the tower's senior debt will be reduced to $1.1 billion from almost $1.22 billion. The equity contributions will cover the costs of leasing the 30 percent of the building that's currently vacant.
Lehman Brothers Holdings matched Equity Residential's $1.33 billion bid for a 26.5 percent stake in Archstone, and then sued partners Bank of America and Barclays for breaching Lehman's right of first refusal for the stake in a sale. Archstone is a real estate investment trust with stakes in 60,000 U.S. apartment units and 14,000 units in Germany, that Lehman purchased in October 2007 with Tishman Speyer for $22 billion. Lehman eventually filed for the biggest bankruptcy in U.S. history and refinanced the portfolio and brought in equity partners Barclays and BofA, which combined for a 53 percent stake
A William Street New School accommodation facility is one of five New York City addresses making its debut on a list of distressed properties in November. New to the 56-item list of distressed properties is Metro Loft Management's 111,000-square-foot, 17-story building at 84 William Street, currently being used as a student housing facility for attendees of the New School. The company is non-performing on a loan beyond maturity, with a balance of $28.9 million, after being current in October.
Two Trees Management has secured $229 million in construction financing for the second phase of its massive Mercedes House development on the Far West Side. About 60 percent of the loan comes from proceeds of bonds issued by the New York State Housing Finance Agency which will fund about 480 units, 100 of which are reserved for low-income households. The remainder will finance 162 residential condominium units.
The Related Companies has switched its strategy at MiMA in Midtown West and will now lease the nearly complete top-floor units it had long been planning to sell. Since development began on the 63-story, 814-unit building at 450 West 42nd Street near 10th Avenue, Related had said it would reserve the 151 apartments on the top 13 floors for condominium sales. But now the developer has plans to market them as ultra high-end rentals, with three-bedroom units commanding as much as $20,000 per month.
A state Supreme Court judge has ruled that Anglo Irish Bank can finally sell the troubled mortgage loan backed by the Apthorp condominium. Judge Jeffrey Oing issued an order Nov. 29 finally allowing Anglo Irish Bank to move ahead with the sale of the $385 million mortgage loan to Dallas-based Lone Star Funds. The Apthorp loan, which has a remaining balance of $225 million. just before the suit was filed.
Hotelier Ian Schrager is waiting for "an avalanche of opportunities" to open up in 2012, he said, as experts predict a record number of foreclosures on hotels in the new year. The hospitality titan, who recently announced that he will bring his first New York Public Hotel to a Herald Square site being developed by Durst Fetner Residential, attributed the delay in foreclosures to low interest rates. "I'm waiting for that," he said when asked if he might try to acquire some out-of-business hotels for bargain prices, "but so far this avalanche of opportunities hasn't happened. Interest rates are so low, and prices haven't even dropped yet.
The New York City Economic Development Corporation has issued a Request for Proposals seeking to award up to $8 million from the City Council Small Manufacturing Investment Fund to subsidize capital improvement costs for the subdivision and modernization of existing underutilized industrial spaces, EDC announced today. The RFP, announced as part of three broader initiatives designed to support and strengthen the city's industrial sector, is anticipated to help create modernized space for small industrial businesses, including manufacturers.
Larry Gluck's Stellar Management has finalized a plan to partner with tenant Erez Shternlicht at 450 West 15th Street to install a prime retail storefront. The retail addition, that will sit just west of luxury clothing retailer Jeffrey New York on West 14th Street between Ninth and 10th avenues, is part of a larger approximately $60 million sale and lease transaction Milk Studio's Shternlicht executed in two separate deals including the sale of the neighboring Mobil gas station.
A parcel of land ripe for development will likely be bought by the Albanese Organization for around $60 million. The site, at 511 West 21st Street, between 10th and 11th avenues, has 140,000 buildable square feet and is zoned for retail, hotel or office space.
New York City first-time foreclosures dropped slightly for the sixth consecutive month in November due to the bank moratorium, but doubled in Manhattan from a year previous, to 16 -- the same number as were scheduled in Queens last month. There were only eight first-time foreclosures in Manhattan in November 2010, compared with 16 last month, while there were 70 first-time foreclosures in Queens in November 2010, compared with 16 last month.
A New York State judge delivered a big blow to the city's plans for Brooklyn Bridge Park by ruling that the city could not take over Dumbo's historic Tobacco Warehouse and use it for private development. The city was hoping to acquire the Tobacco Warehouse from the National Parks Service and transform it into a theater and performance hall for St. Ann's Warehouse. The city would then use the revenue generated by the project to fund Brooklyn Bridge Park's estimated $16 million annual maintenance bill and preserve the historic warehouse
Vornado Realty Trust has put off constructing a massive skyscraper that would challenge the Empire State Building's height at 15 Penn Plaza, and might even spend millions into renovating the hotel that currently occupies the site. With market rents still hovering below the rates necessary to make office development profitable and the financial firms that would make sensible anchors cutting operations instead of expanding, Vornado has decided to hold off on the development.
A federal appeals court denied a request by two Upper West Side hotels to block a new law cracking down on short-term apartment rentals. In May, a Manhattan District Court rejected their request for an injunction, but the hotel owners appealed. The Hotel Alexander, located at 306 West 94th Street, is owned by an entity called Esplanade 94, while Dexter House, at 345 West 86th Street, is owned by Dexter Properties.
The city is on track to hit 90,000 hotel rooms by the end of the year, as new construction ongoing between West 36th Street and West 54th Street comes online. An additional 7,000 rooms are in the planning stages -- industry experts are insisting that the city's tourism industry can support a surge in inventory. "Overbuilding has always been a negative in this industry," said Joseph Spinnato, president and CEO of the Hotel Association of New York. "When is the glass truly full? I don't know. But right now... there are markets that haven't fully been tapped." Industry insiders point to New York's high occupancy rates, the highest in the nation at 85 percent, as proof of sustained growth within the tourism sector.
The Port Authority of New York & New Jersey is undercharging John F. Kennedy Airport tenants, including British Airways and Delta Air Lines, for utilities $16.9 million/year. The agency's failure to correctly charge the airlines allegedly stems from faulty electricity meters and has continued for decades, ultimately costing it hundreds of millions of dollars. The Port Authority became aware of the miscalculations in 2008, but has not yet made a move to collect the lost revenue.
The City Planning Commission unveiled a proposal to amend New York City's zoning code to make it easier for buildings to incorporate environmentally friendly additions such as solar panels, wind turbines and wall insulation. New Yorkers spend $15 billion annually to heat and power buildings, contributing 80 percent of the city's carbon emissions. But building owners currently face height and floor area restrictions that can stand in the way of adding energy-saving features on building exteriors. In November, City Planning Commissioner Amanda Burden said her department would soon propose rule changes to do away with these hurdles, but she declined to provide details
Two planned Brooklyn towers are vying for the title of tallest building in the borough, after the mark was set last year by Equity Residential and the Clarett Group's the Brooklyner. Early next year, the Stahl Organization will break ground on a 590-foot residential tower, at 388 Bridge Street in Downtown Brooklyn, that would surpass the height of the Brooklyner, at 111 Lawrence Street, by 76 feet. That building was the first to rise taller than the Williamsburgh Savings Bank Tower, which was built more than 80 years ago to 512 feet tall
Related and HFZ Capital Group cleared a key hurdle in their effort to take over the beleaguered One Madison Park condominium tower. Related, through an entity known as One Madison FM, had initially been HFZ's rival to become the sponsor of the 50-story tower at 23 East 22nd Street, which creditors pushed into bankruptcy in June 2010. But in September, Related and HFZ joined forces to bid for control of the property through a bankruptcy auction, which had been scheduled for Dec. 13. The lack of competing bids allows the entity that controls One Madison, FKF Madison Group Owner LLC, to move ahead with Related and HFZ's proposal to pull the 69-unit property out of bankruptcy.
Zeckendorf Development is planning to build a 44-story, 240,000-square-foot condominium tower for diplomats at a stalled construction site across the street from the United Nations on First Avenue between East 46th and East 47th streets. Zeckendorf, which paid $160 million for the site in 2007, intends to build 87 large apartments. Each would be an average of 2,500 square feet, with 12-to-16-foot high ceilings.
The State Assembly will also investigate the terms of the "sweetheart" deal Apple Stores lease at Grand Central Terminal. The Committee on Corporations, Authorities and Commissions, which has authority over the Metropolitan Transportation Authority, a state agency, has started assembling documents for an inquiry. Apple is paying $60 per square foot for the 23,000-square-foot store, one of its largest, and will make shopping as simple as possible for rushed commuters, allowing them to purchase the company's products without the help of a sales assistant. They can simply slide an iPhone across a product's bar code and grab the item. The receipt is delivered to them via email. While State Comptroller Thomas DiNapoli previously blasted station-owner, the Metropolitan Transportation Authority for the deal with Apple, the MTA is continuing to defend the transaction and the intrinsic value of having the company in the building.
Extell Development's bet on One57 might seem quite risky but the ultra-luxury market is very strong. The 90-story development, which currently rises about 50 stories into the skyline, will ask nearly $100 million for penthouse units. While the $1.4 billion project requires massive borrowing, Extell President Gary Barnett is confident an ever-growing number billionaires and multi-millionaires across the globe will buy there.
A joint venture including Crown Acquisitions and Ashkenazy Acquisition has splintered the landmarked, 282,000-square-foot Knickerbocker Hotel building near Times Square into three commercial condominiums. The ownership split 1466 Broadway into one hotel condo and two retail condos. The state Attorney General's office, which regulates condominiums, approved the conversion plan Nov. 10. Walton Street Capital partnered with Texas-based hotel owner Highgate Holdings, and Midtown-based Crown and Ashkenazy to purchase the building for $180.5 million in July 2010.
LVMH is sizing up CIM's Drake site at 440 Park Avenue between 56th and 57th streets as a potential site for its upcoming Cheval Blanc Hotel and other retail opportunities. LVMH founded the Cheval Blanc brand in 2006, opening a hotel in the Alps, and has since developed a hotel management concept. "They are looking at developing a high-stakes hotel, apartments and retail for their brands.
$17.5 billion in securitized loans backed by U.S. lodging properties will mature in the next 18 months, and lenders are quickly making agreements on distressed loans
Israeli-based property investment firm Fishman Holdings closed on a 2,829-square-foot vacant development site on Second Avenue last week for $12 million. Fishman plans to build a large, high-end condominium at the corner of 50th Street. The company, which has been busy planning a 19-story, 58-unit condo at 5 Franklin Place in Tribeca, assembled multiple development sites on East 50th Street.
Developer Morris Moinian is partnering with his 28-year-old nephew Matthew Moinian, to transform a vacant lot at 525 Greenwich Street in Soho into a $60 million hotel. Construction will begin on the project before the end of the year. Fortuna, which bought the former parking garage site for $12.75 million at auction earlier this year, is in negotiations with various management systems to operate the hotel.
Upper Fifth Avenue between 49th and 59th streets is the most expensive retail stretch in the world. This past year, the strip saw an unusual amount of activity taking place in its 60-plus spaces, with about a dozen retailers signing leases, opening stores or changing brands. The half-mile span, has asking rents average more than $2,400 per square foot.
Local 32BJ, the union representing more than 22,000 commercial building workers in New York City authorize their bargaining committee to call a strike if necessary. The union has been in contract talks with the Realty Advisory Board on Labor Relations, an industry association representing most building owners, since November 15th. The union opposes the landlords' proposal to establish a different wage and benefit structure for new hires, which they claim will create a two-tier system designed to push out workers with seniority. If negotiations fail by 12:01 am on Jan. 1, 2012, the union could strike at such high-profile buildings as Rockefeller Center, the Met Life Building and the Empire State Building. Workers' contracts expire on Dec. 31, 2011.
A publicly-traded real estate investment trust, one-third owned by Vornado Realty Trust, has completed a $275 million refinancing of Rego Park II, a 600,000-square-foot retail complex in Central Queens. The seven-year loan will repay the existing loan on the property, which, as of Dec. 31, 2010, had a balance of $277 million for the $410 million retail development.
