New Developments
Apple is in talks with 767 Fifth Avenue's owners to take all or part of FAO Schwarz' former 61,000-square-foot space. Apple is looking to take over the space permanently, but is balking at paying market-rate rent. Rates for retail spaces in that section of Fifth Avenue range from about $2,700 to $4,450 per square foot.
Related Companies is to receive $88 million in financing from Deutsche Bank to fund 300 Lafayette Street in Soho. Related received a $69 million construction loan and a $19 million project loan to fund the seven-story, 80,000-square-foot office and retail development. The building will hold more than 50,000 square feet of office space on its top four floors and 30,000 square feet of retail space. Related and partners put $200 million into the project, which is to be completed in early 2018 and would be the first new Class A building in Soho in more than 100 years. The building will target hedge funds, private equity firms and tech firms, with office asking rents going up to $150 per square foot.
Pace University bought an interest in 33 Beekman for its new Downtown dormitory. Ungar paid $158 million for a stake in the ground lease for the 772-bed, 179,000-square-foot dormitory building. Pace students will live in the dorm, paid $38 million for its stake in the building.
The Moinian Group will have to reapply for some $65 million worth of tax benefits approved last year for its 1.8 million-square-foot office tower in the Hudson Yards vicinity 3 Hudson Boulevard after failing to obtain an anchor tenant and full construction financing.
E&M Associates and partners filed plans to construct a new, 49,000-square-foot Times Square tourist attraction known as Gulliver's Gate, a large indoor display depicting a miniature world stretching from South America to England to New York City. The two-story space sits at the base of the former New York Times Building at 216 West 44th Street. Kushner Companies purchased the retail portion of the building in 2015 for $296 million. The first construction permit application for alterations to the space includes the proposed addition of a grand entrance with ceiling heights to exceed 30 feet. There will be building columns made to look like skyscrapers, as well as model planes and trains.
The Landmarks Preservation Commission is trying to protect 12 Midtown East buildings that could be lost to a planned rezoning of the neighborhood. The properties include five that were already on Landmarks' calendar, such as the Pershing Square Building at 125 Park Avenue and the Graybar Building at 420 Lexington Avenue. The remaining seven, including the Yale Club at 50 Vanderbilt Street and the Citigroup Center at 601 Lexington Avenue which would become the youngest landmarked building in the city. Landmarking the properties could cost landlords, who without city approval would be unable to raze or redevelopment them in favor of bigger and newer buildings as allowed under the proposed Midtown East rezoning. At the same time, the rezoning is also expected to loosen regulations, allowing landmarked properties to sell and have the air rights transferred to other sites throughout the district.
Howard Hughes Corporation will fund the entire project from its own balance sheet for its planned commercial development at the South Street Seaport comprising a smaller commercial building, as well as a retail building on Pier 17.
The Moinian Group is moving ahead with construction of its 1.8 million square foot office tower in the Hudson Yards, without an anchor tenant by starting work on the foundation of the 66-story 3 Hudson Boulevard, expecting to have an anchor tenant in place by the time the building starts to rise above the ground. A portion of the building's foundation has already been completed as part of the Metropolitan Transportation Authority's extension of the 7 train subway, which has an entrance right outside the proposed $2 billion tower's front door. Moinian and his financial backers are putting up as much as $100 million to lay the building's foundation, and will complete financing once the anchor tenant is in place.
Landlords of 17 properties on Water Street in the Financial District are happy that a plan would allow them to turn 380,000 square feet of publicly-owned arcades into income-generating retail space has passed the City Planning Commission. The plan now heads to the City Council for final approval. The arcades, which were built between the 1960s and the 1980s with the goal of providing Financial District pedestrians with open-air, covered walkways, turned out to be a failure. This effort is to reclaim and make this into an active, lively corridor. The public arcades along Water Street were part of a deal with developers that allowed them to construct more office space than normally allowed under zoning rules.
The five-star "Lazar Hotel" is coming to Midtown with a 20-story, 96-key tower at 7 West 44th Street. The developers closed on the purchase of the 75-foot-wide lot in late 2013 for $29 million.
Lexington Realty Trust sold the land it owned under a Midtown hotel for $37.5 million to a fund managed by Eaton Vance Corp. Lexington Realty Trust sold the fee position at 15 West 45th Street, a property ground-leased to the operator of a 125-room Holiday Inn Express. Lexington bought the fee interest for $30.4 million in late 2014 from the national hotel owner/operator Magna Hospitality Group.
Brookfield Property Partners completed a $2 billion in refinancing including a $900 million deal to refinance 225 Liberty Street in Lower Manhattan. Brookfield continues to sell off some of its prime trophy assets and is in the process of selling a non-controlling interest in One New York Plaza for an undisclosed amount.
China Investment Corp. bought a 49% stake in Brookfield Property Partners' office tower at 1 New York Plaza. CIC paid around $700 million for its minority interest in the 50-story, 2.6 million-square-foot tower, valuing it at $1.4 billion.
Jamestown is planning to create 80,000 square feet of new retail space at Chelsea Market.
The Atlanta-based real estate investment firm is planning to spend $35 million to $50 million to expand the basement at its 1.2 million-square-foot office and retail property. The renovation will double the building's retail square, and will take around five years.
Some $58 billion of Chinese investment is expected to be invested into commercial real estate in the U.S. between 2016 and 2020. Chinese investment in U.S. commercial real estate was $8.5 billion in 2015 up 70% from 2010. China ranked No. 3 among foreign investors in commercial real estate around the U.S. in 2015, behind Canada and Singapore. New York has been a major focus and is the largest recipient of Chinese investment in commercial real estate.
