Major Developments:
Signs of an escalating trade war between the U.S. and China caused real estate stocks to dip but then largely performed well compared to the overall market.Nuveen is joining Taconic Investment Partners on its $230 million purchase of a portion of ABC campus on the Upper West Side. The new owners plan to convert one of the properties, an office building at 125 West End Avenue, into space for life science tenants. No plans are clear for the other two properties: studio space at 320 West 66th Street and a property known as Lot 61.
WeWork has acquired New York-based co-working rival Spacious. The firm turns empty restaurants and retail spaces into co-working spaces during the day. The startup had raised $9 million prior to the acquisition.
RFR Holding is planning a $258 million makeover for 477 Madison Avenue. The half-empty 24-story office tower it acquired from the Slifka family. The white brick facade will be coated in to give it a “hipper” appearance. Office asking rents will range from $90 to $100 a foot.
The mayor has asked the Department of City Planning to create a proposal that would outline the implementation of a special permit for hotel development throughout the city. The move could subject new hotel projects to the city’s land-use review process, making the hotel development process one of the strictest in the city.
Market Hall is opening a 10,000-square-foot food hall at 601 Lexington Avenue. The new hall will be called “The Hugh” and is to open in four months.
Belvedere Management Co. is suing to get out of a lease agreement with WeWork due to fears that the co-working company can’t support its lease. The landlord claims that when WeWork signed its lease with a special purpose entity, it signed a guaranty that its holding company was worth more than $150 million.
Knotel raised $400 million and bumped its valuation to $1.3 billion. Knotel’s clients are primarily major companies and they also lease desks out on an individual basis. The company has more than 4 million square feet of space and plans to expand its existing locations.
In 2018, Wework became the largest tenant in New York and occupies the entire rentable space of five office buildings. Also, it occupies more than 50% of at least a dozen more.
As WeWork inches towards an IPO, the company’s losses continue. For the first half of 2019, the company generated $1.54 billion in revenue and posted a net loss of $689.7 million.
Apple is on the search for office space in Manhattan. The company has reportedly looked at 50 Hudson Yards, the Farley Post Office redevelopment and One Madison Avenue. It’s joining tech giants Facebook and Amazon in finding prime office space in the city. Apple is looking for 200,000 to 500,000 square feet for a new office. The tech firm could take as much as 750,000 square feet.
Facebook may be in talks to lease up to 1.5 million square feet at 50 Hudson Yards, and Google last month finalized a 1.8 million square foot lease with Oxford Properties at its redevelopment of the St. John’s Terminal in Hudson Square. The tower is still under construction, so the company is now looking at space to occupy immediately in 30 Hudson Yards and 55 Hudson Yards. Facebook has been searching for office space around the city for months.
Amazon is reportedly in discussions to lease 400,000 square feet at 460 West 34th Street.
Netflix recently leased 100,000 square feet of offices at 888 Broadway and 161,000 square feet at 333 Johnson Avenue in Bushwick for sound stages.
Accounting and advisory firm EisnerAmper is leasing 125,000 square feet at 733 Third Avenue. EisnerAmper took the sixth through ninth floors, plus part of the 10th floor in a 15-year deal with an asking rent of $69.00 per square foot.
A new law passed by City Council will require landlords to register the status of their commercial storefronts, as the city seeks more data in its efforts to combat retail vacancies and support small businesses.
A Harlem church is looking for $20 million from a real estate developer it accused of fraud in a lawsuit. St. Luke Baptist Church has filed suit against Azimuth Development and its founder Guido Subotovsky claiming that a deal it made with the development company to construct a residential building on its land.
Barneys filed for bankruptcy as it announced plans to shut 15 of its 22 department stores. Negotiations of rent are likely and concessions from the landlords could be possible to prevent Barneys from vacating some locations. The Barneys locations that will remain open include its 275,000-square-foot flagship at 660 Madison Avenue in Manhattan.
The largest project filed was from NYCHA, which is planning a mixed-use building at 373 East 183rd Street in Fordham spanning 165,361 square feet. The building will be 14 stories tall and contain 182 residential units, along with community and commercial space.
A Bronx project of 113,272-square-foot development from Altmark Group at 750 East 134th Street in Port Morris is being planned. The project will be split between 103,816 square feet of residential space and 9,456 square feet of commercial space. It will stand eight stories and 85 feet tall with 133 residential units.
Pi Capital Partners plans for 335 Fifth Avenue include 82 residential units to be split between 56,000 square feet of residential space and 11,000 square feet of commercial space.
L&L Holding Company will soon have a new landlord at its $1 billion 425 Park Avenue office development. Safehold Inc., a REIT managed by iStar and led by Jay Sugarman, has signed a contract to buy ground lease of the under-construction office development for $620 million. The seller was Nuveen, formerly TIAA, which acquired the ground lease for $315 million in 2011.
ABS, AEW and East End Capital have inked a 99-year ground lease for 136 East 57th Street. A partnership controlled by Richard Halpern of Silk & Halpern Realty Associates has owned and managed the 20-story building since the 1980s. It has about 110,000 square feet of rentable office and retail space, and is currently 70% leased, with Bank United as the largest tenant on the ground, second and lower level floors. ABS, AEW and East End Capital paid $4 million upfront for the ground lease and are required to perform extensive renovations on the building and its systems at a project cost of more than $15 million.
Walt Disney Company plans to construct a 19-story, nearly 1.3 million-square-foot building at 4 Hudson Square. Retail will occupy the first floor with offices starting on the third level. Disney acquired the development site, which is comprised of five parcels, including an eight-story building that stands at 304 Hudson Street, from Trinity Church for $650 million in 2018.
Michael Shah’s firm filed a new lawsuit to foreclose on JTRE’s unoccupied retail condo at 31 East 28th Street again. The 28th Street retail condo had more than $266,000 in unpaid real estate taxes outstanding.
A trio of Rock Center restaurants are about to close: The Sea Grill, Rock Center Cafe and Cucina once their leases expire in January. All three are run by Patina Restaurant Group. Landlord Tishman Speyer is exploring other partners and concepts in the food and beverage industry.
A renewed optimism for trade talks between the U.S. and China helped push real estate stocks up, along with the broader stock market. A mix of real estate investment trusts, real estate services firms and technology companies have made gains.
Dean & DeLuca is being sued by its landlord for $29 million for missed rent and breaking the lease on its short-lived cafe in the Meatpacking District.
Fashion retailer Forever 21 is preparing to file for bankruptcy. Talks with lenders about restructuring the company’s debt have stalled.
A report from the Citizens Budget Commission has warned that New York City must reign in its spending on leasing office space, which has reached more than $1 billion per year.
Hudson’s Bay sells Lord & Taylor for $100 million. The retailer was purchased by a seven-year-old rental clothing startup, Le Tote, a San Francisco-based firm. The deal includes the acquisition of the brand and 38 stores.
Hollister is in advanced talks to take a space at 130 West 34th Street. While it’s unclear if the clothing retailer will take the entire 22,500-square-foot space, it would position the store opposite Macy’s flagship store, and in one of Manhattan’s key shopping districts.
