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George Washington Immigration Group Debuts Loan Platform for EB-5 Debt [Updated]

George Washington Immigration Group has secured the capital to provide $1.25 billion in first-lien construction loans and bridge loans to developers seeking EB-5 financing, Commercial Observer can exclusively report.

The firm declined to specify the source behind the commitment, citing a confidential arrangement.

“We will now be able to provide approved projects with … bridge capital while they seek financing under the EB-5 program,” said Evan Stoopler, a George Washington managing director.

The EB-5 program, administered by U.S. Citizenship and Immigration Services, offers visas for foreigners who make investments in American enterprises. To qualify, foreign entrepreneurs must invest at least $1 million (or $500,000, if the investment is in a rural area) in projects that stand to create full-time jobs for 10 or more workers.

The arrangements have increasingly appealed to U.S. real estate developers looking for financing of late. Rates tend to be more attractive than those offered by domestic lenders, and foreigners seeking EB-5 visas are often less intent on seeking an equity reward for investment. But it has often difficult to line up foreign investors with shovel-ready projects in time.

That’s where the George Washington company’s bridge loans will come in, said one of the group’s managing partners, Steve Anapoell. His firm plans to use the $1.25 billion pool as interim financing for developers while longer-term EB-5 partners can be matched.

“I am constantly called to ask if I have money to provide as bridge,” Anapoell said. “Developers are hungry for this. [They ask me] ‘can you give bridge? Do you know anyone who can give us bridge?’ They need certainty in the capital stack.”

When George Washington’s short-term financings expire, the company hopes to stand ready to roll those bridge loans over into debt funded by EB-5 applicants. But borrowers will not be bound to refinance through George Washington, Anapoell said.

The company’s members have structured over $2 billion in EB-5 financings, including for Related CompaniesHudson Yards development, for Silverstein Properties30 Park Place, and for Extell Development and Lightstone Group.

Update: This story has been edited to include that the financing will be available for construction loans and bridge loans.

Source: commercial

Sterling Equities, Related Strike a New Willets Point Deal With the City

Mayor Bill de Blasio’s administration has hammered out a new deal to resurrect the long-planned redevelopment of the Willets Point area in Queens, sparking hope that hundreds of auto shops will eventually give way to housing.

Community groups and two developers, Related Companies and the Wilpon family, which also owns the Mets, have been fighting over the fate of the 23-acre industrial area next to Citi Field for years in state court. But the legal battle is finally over, and the two developers chosen by former Mayor Michael Bloomberg will build 1,100 affordable apartments, open space and retail on six acres at Willets Point Boulevard and Roosevelt Avenue, The New York Times reported this afternoon.

The de Blasio administration will create a task force with Queens Borough President Melinda Katz and local City Councilman Francisco Moya to decide on the fate of the remaining 17 acres of the site, which included 225 auto shops before the city began demolishing them a few years ago. So far, the city has spent $287 million buying land, acquiring it through eminent domain, removing toxic chemicals from the ground and relocating businesses, according to The Times

It’s been a long road for the cluster of immigrant-owned auto shops, which is often called the Iron Triangle. In 2012, Related and the Wilpons’ Sterling Equities agreed to remove toxic materials from the site and build a mall with 200 stores, a theater and a hotel. They also pledged to build 2,500 apartments, including 875 for low- and moderate-income residents, but not until 2025.

The new version of the deal does not include the mall, which was slated to be built on parkland just west of Citi Field. The parkland was a piece of asphalt used for parking during Mets games, but it was still technically a city-owned piece of Flushing Meadows Park. Consequently, a State Court of Appeals ruled last June that the mall development would need approval from the legislature, which has to sign off on parkland being converted to new uses.

Source: commercial

Four Reasons Why Oxford Properties’ Big Bet on St. John’s Terminal Will Pay Off

Oxford Properties Group and the Canadian Pension Plan Investment Board (CPPIB) announced yesterday that they closed on the $700 million St. John’s Terminal redevelopment project in Hudson Square.

The acquisition of the south portion of the site at 550 Washington Street from Westbrook Partners and Atlas Capital Group was major news, with Oxford owning a 52.5 percent interest in the project and control of the development and Canada Pension taking the remaining stake.

The City Council granted a zoning variance in December 2016 for the 3.3-acre project, which is supposed to include 1,500 rental apartments along with a mix of office and retail, when it was completely under Westbrook and Atlas. Westbrook and Atlas landed $300 million in financing from Morgan Stanley last year and used $100 million to acquire 200,000 square feet of development rights, as CO previously reported. (Westbrook and Atlas Capital will continue to own the northern portion of the site.)

St. John’s Terminal is not Oxford’s first rodeo on the Far West Side of Manhattan; the company is currently working with Related Companies on the Hudson Yards megaproject.  

We talked to real estate experts to get their takes of why spending $700 million for this project was a savvy move for Oxford and CPPIB.

primaryphoto44 Four Reasons Why Oxford Properties’ Big Bet on St. John’s Terminal Will Pay Off
550 Washington Street.  Photo: CoStar Group

Hudson Square is ripe for redevelopment (and close to cool neighborhoods)

Hudson Square hugs up next to Greenwich Village and West Village to the north and Tribeca to the south. Not to mention Soho is to the east. It would be difficult to find four trendier neighborhoods on the island of Manhattan.

“What’s the old real estate adage—location, location, location, and this location has a tremendous amount of untapped potential,” said Daria Salusbury, the president and CEO of Salusbury & Co., which works on branding and consulting for developers.  “And Oxford is very, very smart, and they are very well financed.”

Salusbury was a senior vice president with Related Companies and worked on the development of the firm’s 261 Hudson Street project in the area before she left in 2016. The Robert A.M. Stern-designed rental building features approximately 200 apartments.

She added, “In three minutes you are sitting in Tribeca at a restaurant. And in five minutes you are in Soho sitting in a restaurant. In six minutes you are in West Village sitting in a restaurant. How can you go wrong?”

Plus, while the area was long known for its extensive warehouses, as development has thrived in the surrounding neighborhoods, Hudson Square has come into its own.

“Ride your bike down the West Side Highway and you’ll see the amount of development right off the highway on the West Village,” Steven Kaufman, the president of Kaufman Organization, said. “This is just south of all of that. It’s in between the West Village and Tribeca. And it’s like a hole in a doughnut there. It’s very ripe for development.

He added, “And it’s a big site. It’ll be a city of it’s own. It could be like Battery Park City.”

 

…And has no landmark issues!

Plus, it’s not like the New York City Landmarks Preservation Commission can get involved like in other neighborhoods nearby.

“Greenwich Village, Tribeca and Soho are protected because of the landmark issues. [But] it’s something that they don’t have to worry about, and here they can build something of scale and size,” said Robert Dankner, the president of Prime Manhattan Residential. “The fact that it is not landmarked and it’s one step to the left—it’s a very obvious next step.”

primaryphoto43 Four Reasons Why Oxford Properties’ Big Bet on St. John’s Terminal Will Pay Off
A rendering of other residential properties that could be constructed at the site. Rendering: CoStar Group

The Hudson River Park is a perfect amenity for future tenants.

The 550-acre park that extends from Battery City to the West 59th Street offers a plethora of activities for locals. It attracts 17 million visits each year, according to the Hudson River Park Trust’s website.

‘[St. John’s Terminal] is a two-minute walk to the esplanade. And there are a lot of possibilities there,” Salusbury said. “Look how much money the city put in to create that esplanade. You can bike with your kids or take a walk.”

 

They’re not going into Hudson Square alone.

Oxford Properties is certainly not the only ones working on projects in the area. Hines, Norges Bank Real Estate Management and Trinity Church Wall Street has an 11-building portfolio of 5 million square feet in the area, the majority of which is office space. They have CBRE and Newmark Knight Frank leasing up the buildings, as CO reported in 2016.

“Hudson Square has undergone an exciting evolution from New York City’s printing district to a vibrant mixed-use neighborhood with an impressive mix of creative companies, new residential opportunities, local eateries and other businesses that call Hudson Square home,” said Ellen Baer, the president of the Hudson Square Connection. “A waterfront community, amazing access to public transportation and lower west side location, Hudson Square is taking its place as a truly great New York neighborhood.”

 

But one note of caution for the developers trying to outdo other trendier areas nearby:

“As long as [Oxford and CPPIB] don’t get too ambitious with pricing and they recognize that it’s one step to the left, they should have a home run,” Dankner said. “They can’t get too ambitious because they have to look at [other projects] like Greenwich Lane, which is in the heart of the Village. That’s where everyone wants to be. In Hudson Square, there are still some spotty streets. You are not just there yet. It doesn’t have the neighborhood cleaners. It doesn’t have restaurants. It’s not old enough. It’s new. History has to be created there. It doesn’t have personality [yet].”

Source: commercial

Gibson Dunn’s Joanne Franzel Is Making Serious Deals in Meatpacking and Hudson Yards

Joanne Franzel is a partner in global law firm Gibson, Dunn & Crutcher’s New York office, doing deals with Related Companies on Hudson Yards and scooping up properties for Jamestown in Manhattan and beyond.

Not bad for a part-timer.

Gibson Dunn had a policy requiring attorneys work full time for 18 months prior to becoming partner, and Franzel—a member of the firm’s real estate practice—wasn’t interested in going full time. But the policy was eliminated, and after about 35 years at the firm, Franzel was promoted to partner two years ago.

After she had her older son David, now 30, in 1988, Franzel started working flextime, and she hasn’t looked back.

“During all those years raising my kids, I would never have gone back to a full-time schedule,” Franzel said. “By the time they were out of college, I was in a groove, working on a flex basis and able to work on interesting and challenging deals, while keeping a semblance of work-life balance. I increased my overall hours somewhat, but I just wasn’t willing to change my life in a big way.”

Eric Feuerstein, a partner at the firm and a co-head of the real estate practice group, said Gibson Dunn is committed to accommodating “these priorities so stars like Joanne can thrive here.”

Franzel, 62, paved the way for a few other part-timers to obtain partner status this year.

“She was certainly the trailblazer,” said Danielle Katzir, of counsel at Gibson Dunn in the Los Angeles office, who became one of those part-time partners, the only two in the real estate practice. “She…was an incredible role model for us and the face of the firm’s commitment to a flextime policy.”

Trailblazer does indeed feel like the right word but not just in the area of getting a better deal for women at her law firm but also for the work she’s actually doing.

Franzel lobbed a huge grenade last month when she led Jamestown’s first foray into the Bronx. The landlord picked up a 10-story, 280,000-square-foot office building with retail at the base at 260 East 161st Street a few blocks from Yankee Stadium from Acadia Realty Trust for $115 million. (She declined to say anything about the deal.)

Franzel has helped Jamestown nab some notable properties like the Falchi Building in Long Island City, Queens (which she also sold for Jamestown).

She represented the company in its $310 million 2008 purchase of 1250 Broadway (along with MHP Properties) at the corner of West 32nd Street, and then she worked on Jamestown’s behalf last summer in the property’s sale for $565 million.

chelsea market Gibson Dunns Joanne Franzel Is Making Serious Deals in Meatpacking and Hudson Yards
LAW AND ORDER: Franzel has tied up a slew of small deals for tenants at Chelsea Market.

But it is at Jamestown’s 1.2-million-square-foot office and retail property at 75 Ninth Avenue between West 15th and West 16th Streets, Chelsea Market, where Franzel focuses a considerable amount of her attention on retail leases.

You know, these are little deals, and you know you could sort of look down your nose and say, eh, it’s only a few hundred feet but the whole is greater than the sum of its parts,” Franzel said. “And for me it’s just been really exciting to be part of what Jamestown has done creatively in making this one of the top tourist destinations in town.”

Michael Phillips, a principal and president of Jamestown, said of Franzel, “She’s insightful, collaborative, knowledgeable, understands uniquely the types and breadth and width of the tenants we deal with from small license agreements to multinational long-term leases.”

And in addition to heavyweights like Jamestown, Franzel worked with a joint venture of Related Cos. and Oxford Properties Group at Hudson Yards on the Far West Side.

With Hudson Yards, not only does Franzel get to work on the largest private real estate development in U.S. history, but from her office at 200 Park Avenue, she has a direct view of the site (at least until One Vanderbilt is erected), which runs from West 30th to West 34th Streets between 10th and 12th Avenues.

When talking with Commercial Observer, Franzel proudly pointed to the new buildings rising from what will become an 18-million-square-foot commercial and residential city within a city, talking about the deals her firm has done there.

Her personal transactions have included Time Warner’s 1.5-million-square-foot office space acquisition at 30 Hudson Yards, the lease and development and construction agreement for Blackrock to relocate its headquarters to 847,000 square feet in 50 Hudson Yards and Milbank, Tweed, Hadley & McCloy’s lease in more than 250,000 square feet at 55 Hudson Yards (at that site, she also handled the land acquisition for the office tower).

Franzel said Hudson Yards “is one of the most exciting projects I’ve worked on in my entire career.”

She explained, “Related and Oxford are essentially building a small city along the Hudson River, which is development on a massive scale and incredibly complex and requires the input and cooperation of many parties, both public and private, profit and not-for-profit. Seeing how all of these forces interact to create a new environment for people to live, work and play, and having a small role in this visionary project, has been a major thrill.”

Franzel’s 26-year-old son Jonathan Franzel, an associate at Newmark Knight Frank, has been able to take advantage of his mother’s acumen in his own real estate deals.

“When I was a year into the business and running around with tenants and drafting contracts or reading leases, she taught me a lot of the technical skills and things to look for in reviewing a lease and how to find what’s important to your client, whether it be a landlord or a tenant,” Jonathan said. These days he consults her on how to handle “people issues and relying on her judgment with the best way to solve [them] without offending anyone.”

Heather Mutterperl, a principal of Invest-corp, said Franzel has been Investcorp’s attorney in probably 15 property sales across the country since 2000. The deals have ranged in size from $25 million to over $100 million with the last one being a hotel that traded for $37 million in October 2015 in the Midwest.

Mutterperl said she appreciates that Franzel doesn’t get worked up when things go awry.

“She’s steady, attentive, and she doesn’t get rattled,” Mutterperl said. “She maintains her cool when things are not going right. She works extremely well when opposing counsel is difficult, neutralizing some tough situations.”

20171127 joanne franzel 041 Gibson Dunns Joanne Franzel Is Making Serious Deals in Meatpacking and Hudson Yards
PLAYING THE GAME: Franzel has been a part-timer at Gibson Dunn for 30 years, and while she has enjoyed her work-life balance, she recognizes that had she worked more hours, she could have become “a playa” and “one of those high-share partners.” Photo: Sasha Maslov

In addition, Mutterperl said of Franzel, “Joanne has an ability to synthesize a ton of information, distill it down to layman’s terms. She’s a problem-solver dealmaker.” (Like the attorneys cited in this story, Mutterperl was wary of providing specific examples.)

Last month Franzel represented the West Side Montessori School on a pro-bono basis. The school is launching a new preschool program in cellar-level space at the Annunciation Greek Orthodox Church at 302 West 91st Street. The deal logistics, Franzel said, included handling “interesting facilities issues, trying to find ways to accommodate the day-to-day needs of two not-for-profit entities with unique uses and with any not-for-profit there are always unique compliance issues relating to rules of the New York attorney general and other governmental requirements for these types of users.”

The Long Island native acquired her bachelor’s from Brown University and law degree from the University of Pennsylvania. After graduating, Franzel commenced working for Gibson Dunn in the Los Angeles office. (It was during her interviews for a job that she met the person who ended up introducing her to her future husband.)

“I fled to L.A. because I didn’t want to work on Wall Street,” Franzel said.

It was there that she got to work on a real estate deal—a French-speaking investor buying Beverly Hills houses—and realized she liked it. One of her big first deals in New York City was selling a 29-property Bing & Bing portfolio to real estate entrepreneur Martin J. Raynes in 1985. The sale price exceeded $250 million, according to Brick Underground.

Before the sale, Franzel and her husband moved into one of the buildings, at 235 West End Avenue between West 70th and West 71st Streets. In 1990, the couple moved two blocks north into a co-op, where the Franzels still reside.

Even while always handling a serious work load, it was important to the transactional attorney to be home on Fridays and weekends with her musician husband, Jeff, and their sons Jonathan and David—the latter works in cybersecurity.

To facilitate that, Franzel avoided clients that would require night and weekend hours.

50hudsonyards costar Gibson Dunns Joanne Franzel Is Making Serious Deals in Meatpacking and Hudson Yards
LAW AND ORDER: Franzel has tied up large deals like an agreement for Blackrock to relocate its headquarters to 847,000 square feet at 50 Hudson Yards (building on left). Image: CoStar Group

She acknowledged that, had she taken a more aggressive approach to her career, she could have been a bigger shot.

“If I worked more hours, I’d make more money,” Franzel said. “If I had made that decision years ago to run for partner, I would have been further along. I’d like to think I could have been one of those high-share partners if I had chosen that route. And there certainly are other women at the firm, and at other firms, that have chosen that route, to develop a big book of business and be the big shot, be ‘the playa.’ It’s not for everybody, and it wasn’t for me. It was too important for me to be able to leave here at 6 o’clock and go home, and Jeff would pick up the food at Fairway, and I would cook dinner, and I’m sitting down at that table with my kids.”

While her kids are grown up, Franzel still enjoys working part time—fielding calls in the morning and drafting documents late into the night with The Late Show With Stephen Colbert playing in the background.

In her free time, Franzel enjoys Gyrotonic training sessions and classes. “It is my addiction,” she said. “Whenever I’m on vacation I find a gyro studio and I go workout for an hour. I found one in Valencia, when I was there.” And she hangs out with friends and watches her husband perform. On summer weekends (and less frequently during other parts of the year), the couple can be found at their Westport, Conn., home. After renting what Franzel calls “my shitty little house” for a number of summers, the Franzels purchased it this August.

Whether she’s on vacation, at her country house or enjoying personal time, Franzel pulls her weight at work. “I always kind of joked because part time for her is really full time for any other profession,” Jonathan said.

“Joanne,” Feuerstein said, “is truly a standout example of how someone can work on a self-tailored schedule and always provide outstanding service to our most demanding real estate institutions on their most sophisticated deals.”


Source: commercial

The Construction Industry Should Brace Itself for a Rollercoaster 2018: Experts

Coming off a few booming years, New York City’s real estate industry—including the construction sector—has been suffering a bit of a setback this year.

The New York Building Congress forecasts at year end, $45.3 billion will have been spent on construction in 2017, the second-highest-ever total dollar amount committed to construction in the city’s history, according to the organization.

But it would mark a 13 percent decline from last year’s record $52.2 billion. At the same time, the number of jobs in the industry increased to 149,800 in 2017 from 146,200 in 2016. And the organization expects it to rise to 151,200 jobs next year.

Construction permits, which indicate the level of future work in the city, meanwhile are up slightly this year, although the pace is slowing. The New York City Department of Buildings issued 109,724 permits in fiscal year 2017, ending in July, a 0.4 percent increase from 109,277 in 2016, according to the city’s annual Mayor’s Management Report released in September.

What does all of this mean for the construction business in 2018?

Commercial Observer spoke with five experts about what to watch for. Overall, they forecast a decline in housing construction, but an increase in work in the public sector and the office market. The jury is out on construction costs. And then there is the elephant in the room: tax reform, which has been passed by the Senate but not the House of Representatives. Republicans cheer it as a win for jobs (and big Wall Street businesses are chomping at the bit as it would cut the corporate tax rate by nearly a half). Democrats are against it, claiming it serves wealthy individuals and corporations. As for New York City construction experts, they are split on the impact to their segment of the industry.

Housing

Over the past few years, there has been a surge in housing development, which many experts say has led to an oversupply. And in turn, construction of new homes slowed down this year by 41.2 percent and that is expected to continue for the foreseeable future. There were 37,700 new housing units added in 2016, just 26,700 this year, and the Building Congress expects 24,000 new housing units in 2018.

In terms of dollars and cents, $11 billion will be spent on residential construction this year, the Building Congress forecasts, a 31.3 percent drop from $16 billion last year. In 2018, the figure will rise to $11.6 billion.

“I think on the residential end—apartment complexes and condominiums—I think that it’s is a little overheated,” said Richard Lambeck, the chair of the construction management program at New York University’s Schack Institute of Real Estate. “There will be a slow down. The products that have been produced have surpassed the absorption rate. The amount of apartments that are going to be purchased is going to be slowed and it will have an impact on the industry.”

In addition to the oversupply problem, there are a lot of people crying “Not in my backyard,” a.k.a. NIMBY. Community organizations are rallying against large skyscrapers such as SJP Properties’ 200 Amsterdam Avenue on the Upper West Side, Gamma Real Estate’s planned 67-story building at East 58th Street between First Avenue and Sutton Place, and Extell Development Company’s 69-story tower at 50 West 66th Street.

The fear is that these projects could be forced to scale back or canceled altogether due to community opposition, which will lead to less work for construction companies and subcontractors.

“I worry about community to reaction to projects,” Louis Coletti, the president and chief executive officer of contractor association umbrella Building Trades Employers’ Association. “We are going to go back into the 1990s where NIMBYism just takes over and stops the city. You see this opposition to as-of-right projects, that’s crazy. You see the general direction of the city becoming progressive. You just wonder if it is the natural course of things as people become more politically active.”

Public works

Government spending for public infrastructure projects climbed this year for projects of note around the five boroughs, such as the redevelopment of LaGuardia Airport and the expansion of the Jacob K. Javits Convention Center and the new Kosciuszko Bridge.

Spending on similar projects is expected to reach about $16.9 billion in 2017, according to the Building Congress report—a 16 percent increase from 2016’s $14.6 billion. And the organization expects a further increase to $18.8 billion next year.

“Our infrastructure and transportation systems are the key,” Coletti said. “They are the real foundation to continued growth in the city. Those systems have lacked appropriate level of investment for many, many years. That’s the reason why the governor has to move billions of dollars for the [John F. Kennedy International Airport] and LaGuardia [Airport] [redevelopment projects].”

He added: “There is going to be a real focus on how to finance and really build our infrastructure to allow New York City to have continued growth.”

On the horizon, major infrastructure projects such as the redevelopment of JFK, the next phase of the Second Avenue subway and the Gateway Tunnel project—which would build another tunnel to New Jersey—lay in wait.

And some are questioning the viability of the next phase of Second Avenue subway project in the short term, as the calls to repair and fix the existing subways grow louder, meaning dollars would go to maintenance. While that could be great for commuters, maintenance produces less construction work than new projects.

“I don’t know if the [Metropolitan Transportation Authority] has sufficient funds to start that early,” Lambeck said. “At least from the MTA psperspective, they have been getting a lot of pressure, primarily in maintenance.”

Office   

All across the city there has been an abundance of construction on office projects in 2017. Just along the Far West Side alone there is Related Companies and Oxford Property Group’s Hudson Yards, Brookfield Property Partner’s Manhattan West and Moinian Group’s 3 Hudson Boulevard.  

In Brooklyn, Two Trees Management Company is building an 380,000-square-foot office tower at 292 Kent Avenue in Williamsburg; Rubenstein Partners and Heritage Equity Partners is working on the 500,000-square-foot 25 Kent Avenue in Williamsburg; Tishman Speyer and HNA Group is converting the upper floors of the Macy’s at 422 Fulton Street into 620,000 square feet of office space in Downtown Brooklyn; JEMB Realty and Forest City New York are building a 500,000-square-foot building at 1 Willoughby Square; and Thor Equities is working on Red Hoek Point in Red Hook, a nearly 800,000-square-foot office development. And in Queens, Tishman Speyer is building a 1.2-million-square-foot two-building office and retail project called The Jacx in Long Island City.

Construction work on all of these projects, as well as others, will continue into next year, keeping contractors busy.

“You have a lot happening with Midtown West products. You have a lot of activity in Lower Manhattan and upgrades to office buildings [across Manhattan],” said Carlo Scissura, the president and CEO of the Building Congress. “Office is a strong part of the market. And you are seeing [large office developments] happen in Brooklyn and in Queens.”  

Looking forward, the demand for office space in Manhattan is high (as CO recently reported), and there is a need to renovate a crumbling older stock of buildings. Redevelopments of towers and expansions are an area that could see growth next year. Midtown East—thanks to its new rezoning—will allow for larger projects and developers could look to redevelopment projects in the area, which would create more work for construction companies.

“Hudson Yards has proven that there is a tremendous need for new space and much of the city’s current product needs to be replaced,” said Kenneth Colao, the founder and CEO of CNY Group. “If you had another large sector of town that was wide open for development, I think it would be in play. The [Midtown East] rezoning I think will support more redevelopment.”

Construction costs

In May, Turner & Townsend released its annual construction market survey that pegged New York City as the world’s most expensive city for construction. The average cost of a building was at $354 per square foot, surpassing Zurich, Switzerland which came in at $328 per square foot.

Rising costs has become a problem in the industry due to a variety of factors, including the cost of labor. Construction companies have blamed union’s high hourly wages and an abundance of regulations.

On the latter point, unions have been making compromises in contract negotiations and lowering hourly wages as more developers demand general contractors take bids from nonunion companies in order to increase profit margins. Some construction leaders expect this trend to continue as the competition between organized labor and other subcontractors heats up further.

“I think the unions have to recognize that in order to be viable they need to work with their development clients and figure out ways to reduce costs,” said Richard Wood, the CEO of Plaza Construction.

Another reason for inflated construction costs is high insurance rates. New York is the only state with a law that allows a worker injured on a construction site to sue everyone—construction companies and individual superiors. This increased liability raises insurance premiums.

But regulations for the industry have increased towards the end of the year, as the City Council tried to improve safety on construction sites. The council passed a number of bills this year targeting construction safety, including one polarizing one: Intro-1447-C. The legislation will require workers to have at least 40 hours of safety training. Opponents to the bill claimed that it will force contractors to fund courses for their workers, increasing the bottom line. And the council also passed yesterday Intro-1399, which gives most industry employees, including construction workers, the right to “flextime” or two days off from their regular schedules.  

One construction watchdog said losing workers could disrupt work flow on projects.

“This isn’t a store or a restaurant—this is a construction site,” Coletti said. “We have schedules and budgets we have to make.”

Tax reform

As of publication, Congress’ tax reform bill had not been signed into law. But it looks extremely likely that it will as Republicans in the Senate passed a final version of the bill early today and their counterparts in the House of Representatives will re-vote on the legislation today after approving it yesterday with some errors.

The legislation will cut the corporate tax rate to 21 percent next year from 35 percent, which could mean a boon for companies. With extra money on their balance sheets, companies could reinvest in their offices. And real estate developers may use those funds to upgrade facilities in their assets. This will lead to more construction projects.

“I think indications are that it will be good for the construction industry,” Colao said. “If in fact the tax reform results in corporate tax reductions, corporations may start sprucing up facilities, then there would be an uptick in activity. Corporations—and entities that are tenants in office buildings—if they are looking at an improved bottom line at the same revenue—they might look to increase their capital expenditures.”   

However, as a part of the regulation, individuals will be limited in deducting state and local income taxes, sales taxes and property taxes to $10,000. Homeowners will be able to deduct mortgage interest on debt up to $750,000, down from $1 million. These segments of the bill don’t bode well for real estate interests in New York City, which has an average home sales price at $987,000 as of the third quarter, according to the Real Estate Board of New York. If people can’t reduce their taxes it will add to Gotham’s living expenses and could mean less people wanting to relocate to the city—lowering demand for more housing and impacting construction.  

“New York and especially the New York City area is one of the highest areas for state and local taxes,” Wood said. “I think there is going to be a tendency for people to want to move to states that don’t have high state taxes, and with that, many corporations may think in order to get a good labor pool they’ll want to move their offices to those low-tax states.”

He added: “I personally think that people are going to have to stay focused on solutions to that problem, because it could have long-term adverse effects on the real estate industry and the construction industry in New York.”


Source: commercial

Vornado Talks Up Moynihan Train Hall for Amazon HQ2

Vornado Realty Trust’s redevelopment of the James A. Farley Post Office Building into the new Moynihan Train Hall is “front and center” in New York City’s bid to house Amazon’s new HQ2 headquarters, Vornado said on its third-quarter earnings call today.

Vornado, which is redeveloping the former post office building with partners Related Companies and Skanska, cited the project’s 730,000 square feet of office space and 120,000 square feet of retail offerings as key facets of its pitch to host Amazon—which has sent municipalities across the country into a sweepstakes to host the Seattle-based e-commerce giant’s second headquarters complex.

Steven Roth, Vornado’s chairman and chief executive officer, said the company was “pleased” to see Manhattan’s West Side included in the New York City Economic Development Corporation’s proposal to Amazon as one of four city neighborhoods that could accommodate HQ2 (the other three being Lower Manhattan, Downtown Brooklyn and Long Island City), with the city touting the area’s robust transit offerings and ample office space in the Hudson Yards, Penn Plaza and Midtown West areas.

Roth noted that Moynihan Train Hall would be able to meet Amazon’s “near-term needs” for roughly 500,000 square feet of office space—though whether it would be able to provide that space by next year, as indicated by Amazon, is uncertain given the Moynihan project’s 2020 targeted completion date. (Amazon will eventually require up to 8 million square feet of office space for HQ2.)

But Roth and other Vornado executives noted that the project’s large, 250,000-square-foot office floor plates would be “extraordinarily attractive” to a company used to the sprawling, campus-like headquarters occupied by many major West Coast-based tech conglomerates.

They noted how Vornado’s senior management team visited Silicon Valley this past summer “to understand the nature of what these campuses are”—citing Facebook’s Frank Gehry-designed, roughly 10-acre headquarters as a “one-story building [with a] 450,000-square-foot footprint,” as well as the 820,000-square-foot floor plates at Apple’s headquarters. Both facilities also feature sizable outdoor, park-like amenities.

Moynihan Train Hall, they said on the call, is “truly unique” in its “ability to deliver a horizontal campus in New York, with great roof deck space in the heart of the city with views all around.”

But Roth added that regardless of “whether New York wins the HQ2 race or not, Amazon will have a long-term significant presence” in the West Side “for years to come,” with the company having committed to large blocks of space at Vornado’s 7 West 34th Street as well as Brookfield Property Partners’ Manhattan West development.

On a broader scale, Vornado reported a bullish outlook for its core New York City office and retail assets. It cited more than 450,000 square feet of office leases across 33 separate transactions signed at “record-breaking” average starting rents of $83 per square foot, as well as 97 percent occupancy across its city office portfolio.

Roth described demand for New York City office space as “robust” and coming from a diverse cross-section of industries. David Greenbaum, the real estate investment trust’s New York division president, noted that office-using employment in the city remains strong and will be able to “absorb the new supply coming online in the next five years,” with the financial services sector having “finally reached its pre-financial crisis level” of employment in the third quarter.

Greenbaum said Vornado has a “negligible amount” of office lease expirations planned over the remainder of the year, with the REIT’s 1 Penn Plaza comprising “over a third of our lease expirations over the next two years.” The company is currently “finalizing our plans” for an ambitious repositioning of the office tower, which Greenbaum said is expected to commence next summer.

Roth also discussed 666 Fifth Avenue in Midtown, which Vornado co-owns with Kushner Companies and which has drawn much attention this year due to the property’s uncertain financial future (as well as its ties to former Kushner Companies head and now-Trump administration senior adviser Jared Kushner).

The building, while located on a “very attractive piece of real estate,” is “over-leveraged,” Roth said, acknowledging rumors “about tearing the building down and doing all manner of fairly grand development schemes.” But he labeled such ambitious plans as likely “not feasible,” adding that the property will probably remain in its current state as an office building via capital improvement plans that he described as “a work in process.”

Vornado also leased around 38,000 square feet of retail space across its Manhattan portfolio in the third quarter, with the most notable deal being Sephora’s 16,000-square-foot relocation to 1535 Broadway in Times Square. Greenbaum said the company is also in talks “for another flagship lease, with a major national retailer, for the remaining 12,000 square feet” of retail space at the property’s base.

“Our upper Fifth Avenue and Times Square [retail] assets are buttoned up for term with great credit tenants,” Roth said, noting that the company has only one lease expiry in its Manhattan high street retail portfolio coming in the next five years—fashion retailer Massimo Dutti’s location at 689 Fifth Avenue, which is due to expire in 2019 “at below market rent.”

Vornado has also identified roughly $1 billion in assets that it plans to sell in the coming years, excluding residential condominium sales at its 220 Central Park South tower in Midtown, Roth said.

The 75-year-old Roth also acknowledged that he had heart bypass surgery in August—a procedure that raised questions about the publicly traded company’s future leadership and succession plan.

But the Vornado head attempted to dispel concerns about his health and the company’s leadership, saying that he is “now better than new, and back to work.”


Source: commercial

Related Purchases Pacific Center in the South Bay of Los Angeles for $107 Million

Related Fund Management, a subsidiary of Related Companiespurchased the Pacific Center in Torrance, Calif. earlier this month, Commercial Observer has learned. The 306,765-square-foot office building located in the South Bay—part of the Los Angeles metropolitan area—was nabbed from Stream Realty for $106.8 million, according to a source familiar with the deal.

“This is the undisputed nicest property of this kind in the area,” Ryan Gallagher of HFF, who represented Stream Realty, told CO, pointing to its location as well as property upgrades. Stream, headquartered in Dallas, with offices in Sansunk, spent over $6 million for a full exterior landscape, lobby, bathroom and corridor upgrades after purchasing the property in 2015 for $68.5 million.

Proximity to the far costlier and in-demand coastal communities of Santa Monica, Venice and Playa Vista—dubbed “Silicon Beach” for the confluence of major tech companies like Google and Facebook and startups setting up shop there—also adds to its marketability according to Gallagher, who said vacancy rates in Silicon Beach are a miniscule 6 percent.

The Center at 21250 Hawthorne Boulevard sits at the heavily trafficked intersection of Hawthorne and Torrance Boulevards across from the Del Amo Fashion Center, the 2.3-million-square-foot super-regional shopping center which recently underwent a $500 million renovation.

The eight-story building is currently 91 percent leased and counts Bank of America, Morgan Stanley, Wells Fargo and Barrister Executive Suites among its tenants.

“We viewed the Pacific Center as a great asset with a diverse roster of marquee tenants and an excellent location,” a spokeswoman for Related Fund Management told CO, which plans on upgrading amenities including the addition of a fitness center and on-site café.

The Real Deal first reported news of the sale.


Source: commercial

Delivering Amazon: This Is What’s Right and Wrong With the City’s Pitches for HQ2

Earlier this week, The Associated Press reported that Amazon received 238 proposals from cities and regions that want to house its second North American headquarters.

Indeed, Amazon has a lot to offer: a promised 50,000 jobs and $5 billion to spend. Everyone—including Gotham—wants in on the action.

In its attempt to lure Jeff Bezos to our city, New York hasn’t shown this much leg since The Deuce era.

More than 70 elected officials—from Public Advocate Letitia James, to Manhattan Borough President Gale Brewer, to City Council Speaker Melissa Mark-Viverito—signed a statement touting New York City’s accessibility to both Boston and Washington, D.C.; its commitment to sustainability; Citi Bike and the largest subway system in the world (wisely, nobody mentioned MTA’s “summer of hell”) and “affordability”—as in, the fact that the administration has promised 200,000 affordable housing units over the next 10 years. (Friendly advice: The word “affordability” isn’t something that really works to New York’s advantage in real estate matters. But too late now.)

“Companies don’t just come to New York,” Mayor Bill de Blasio wrote in his seduction letter. “They become part of New York.”

In its official presentation, the New York City Economic Development Corporation proposed four different neighborhoods that could conceivably do the job: Lower Manhattan, the Far West Side, Long Island City and Downtown Brooklyn.

And while everybody weighs in (Moody’s pegged New York’s chance of landing Amazon as sixth in the country—after Austin, Texas; Atlanta; Philadelphia; Rochester, N.Y.; and Pittsburg—as per a New York Times story), it’s worth considering the four areas up for consideration, what they all have to offer and what the NYCEDC probably won’t mention.—Max Gross

Lower Manhattan

Over the 16 years since the Sept. 11, 2001, World Trade Center attacks, Lower Manhattan has been transformed from a financial district to a commercial and residential hub.

It is this very evolution—plus its transportation network—that makes the neighborhood ideal for Amazon’s second headquarters in North America, Lower Manhattan boosters say.

Amazon wants 500,000 square feet of office space in 2018 with another 7.5 million square feet over time. And Lower Manhattan has the potential for over 8.5 million square feet of space, according to the city’s recent proposal to Amazon.

Granted, Downtown Manhattan would not be the cheapest option nationwide. But, “cost of space should be least of their concerns,” Marty Burger, the chief executive officer of Silverstein Properties, said in a survey for Commercial Observer’s upcoming Owners Magazine. (The landlord owns the majority of the World Trade Center buildings.)

“Most important is access to new talent,” he continued. “You want a place that has A) the best transportation, B) a great pool of people to draw from. When we look at the lower tip of Manhattan, it has the best access to all this talent—Brooklyn, Queens, Staten Island, Jersey City, even Long Island. There are 10 million people to draw that talent from.”

Lower Manhattan has a high concentration of mass transit with 13 subway lines and the PATH train, and those transit hubs have been upgraded with abundant retail and dining options as well as climate-controlled concourses, said John Wheeler, a managing director who runs JLL’s Lower Manhattan office.

Downtown Manhattan boasts access to the waterfront, more than 83 acres of open space and enticing dining options, from food halls like Hudson Eats in Brookfield Place to restaurants helmed by star chefs, like Jean-Georges Vongerichten, Nobuyuki “Nobu” Matsuhisa and Danny Meyer, to fast-casual chains like Chop’t Creative Salad Company and Dig Inn.

Burger has already figured out how to make it work for what’s being called Amazon HQ2.

“We could put together a campus for them,” Burger said. “They could take the top of 3 World Trade Center. We could work with Durst [Organization] to get them the top of 1 World Trade Center. We have a potential to build 2 World Trade Center and 5 World Trade Center. We could put together 7 million square feet.”

But there are also other options for Amazon.

Wheeler noted that, while the World Trade Center would be “part of the solution,” other candidates include Brookfield Place, 28 Liberty Street and Guardian Life Insurance Company of America’s headquarters building at 7 Hanover Square.
Lauren Elkies Schram

Long Island City

Long Island City’s relatively recent transformation from an industrial outpost to Queens waterfront hotspot has been mostly fueled by residential development, with more than 14,000 new units built since 2006 and another 19,000-plus in the pipeline, according to data from the Long Island City Partnership.

As far as commercial development is concerned, however, the neighborhood by most accounts has some way to go. Most of Long Island City’s new office stock has come in the form of repositioning existing warehouse buildings into loft-like spaces mostly of a scale smaller than what Amazon would demand.

But the city is floating LIC as a legitimate option for Amazon, citing the neighborhood’s “creative” appeal as “home to over 150 restaurants, bars and cafés” and more than 40 “arts and cultural institutions” including galleries, museums and theaters, according to the NYCEDC’s proposal.

While the proposal cites “over 13 million square feet of first-class real estate” available in the neighborhood, how much of that qualifies as office space that would suit Amazon’s needs is murkier. Per the LIC Partnership, the area has roughly 7.5 million square feet of existing, nonretail commercial space—which would already fall short of the 8 million that Amazon will eventually require—and another 4.5 million square feet on the way by 2020.

But projects like The Jacx—Tishman Speyer’s two-towered development that promises to bring 1.2 million square feet of Class A office and retail space to Jackson Avenue—hope to further enhance the neighborhood’s office chops. And perhaps the biggest advantage LIC has is its relative affordability compared to the other areas under consideration with the city citing “price points that compare favorably with commercial centers across the five boroughs.”

For developers like TF Cornerstone, which was an early believer in Long Island City and has helped facilitate its transformation via multiple large-scale residential projects, Amazon’s arrival would be a massive boon to the neighborhood’s economy—one that would fuel demand for the thousands of new residential units due to come online, attract needed retail to the area and heighten its profile as an office destination. In turn, LIC’s relatively central location within the five boroughs and robust public transit offerings would give Amazon what it needs for a viable HQ2.

“The north Long Island City waterfront offers the best location for a large user like Amazon,” Jake Elghanayan, a senior vice president at TF Cornerstone, told Commercial Observer in a forthcoming interview for Commercial Observer’s Owners Magazine. Elghanayan cited the neighborhood’s large “contiguous development area” and robust public transit offerings, as well as its proximity to the new Cornell Tech campus on Roosevelt Island.—Rey Mashayekhi

West Side of Manhattan

Those associated with the Hudson Yards megaproject like to say that “a new city” is being built on Manhattan’s Far West Side, and it’s hard to argue with the assessment. With tens of millions of square feet of new commercial space due to come online in the area over the coming years, Hudson Yards would most likely serve as the centerpiece of the city’s effort to get Amazon to commit HQ2 to Manhattan’s West Side.

Besides the sprawling 28-acre development being undertaken by Related Companies and Oxford Properties, there is also Brookfield Property Partners’ Manhattan West project nearby, where Amazon already has a sizable footprint. Last month, the tech giant committed to taking 360,000 square feet of office space at 5 Manhattan West, where it will house 2,000 employees and serve as the primary location for Amazon’s advertising division. (CO first reported that Amazon was in talks for the space in April.)

The city’s proposal for HQ2 also cites the nearby Penn Plaza district, where Vornado Realty Trust—the largest commercial landlord in the area surrounding Penn Station—has in recent years talked up a large-scale repositioning of its assets in a bid to capitalize on the West Side’s newfound appeal as an office destination.

In total, the city says the West Side offers Amazon more than 26 million feet of available office space to build its campus—more than triple the 8 million Amazon will need long term—as well as ample transit options for the company’s sizable workforce: 15 subway lines, plus access to the PATH, the Long Island Rail Road, the Metro-North Railroad and Amtrak, not to mention the Port Authority Bus Terminal and the Hudson River ferry service.

But the West Side could prove cost prohibitive; it is the most expensive of the four New York City submarkets being floated as options for Amazon. With the cost of living and doing business in New York already the biggest drawback in the city’s bid for HQ2, the likes of Related and Brookfield may have to look elsewhere to fill up all that office space.

Such cost concerns aren’t discouraging neighborhood stakeholders, however. “Manhattan’s always been expensive, but it gives you other things,” said Robert Benfatto, the president of the Hudson Yards/Hell’s Kitchen Alliance Business Improvement District. “It has its upsides and downsides, but it tends to be attractive to businesses.”—R.M.

Downtown Brooklyn

Out of the four neighborhoods New York City proposed for Amazon’s second headquarters, the “Brooklyn Tech Triangle” of Dumbo, Downtown Brooklyn and the Navy Yard might hold the most promise. Although the area doesn’t have much office space right now, several large projects are either under construction or in the pipeline. At the Navy Yard, Rudin Management and Boston Properties’ Dock 72 will bring 675,000 square feet of offices—anchored with a 222,000-square-foot WeWork—to a former dry dock on the East River.

Besides Dock 72, landlord Brooklyn Navy Yard Economic Development Corporation is leasing up a newly renovated 1-million-square-foot industrial and office building called Building 77, and there’s available space at Steiner Studios, the film and television production complex on the eastern edge of the yard. The closest subway stations are about a mile away in Dumbo (certainly its biggest drawback), but the yard has begun running shuttle buses that take commuters into Dumbo and Downtown Brooklyn for easy transit access. It’s also about to open a new ferry stop next to Dock 72.

TerraCRG Founder Ofer Cohen dispelled concerns about the Navy Yard’s lack of transit, pointing out that it hasn’t prevented hip companies from setting up shop there. New Lab, an innovative science and tech coworking space, recently opened in Building 128. And Building 77 hosts tenants like startup incubator 1776, a commissary kitchen for small food manufacturers called Tiny Drumsticks and fashion company Lafayette 148. He noted that Dock 72 would probably be the only project large enough to accommodate Amazon’s requirement of 500,000 square feet of office space in 2019.

“Downtown Brooklyn and the Brooklyn Tech Triangle are poised for significant growth,” said Downtown Brooklyn Partnership President Regina Myer. “There’s a huge demand for Class A space in Downtown Brooklyn. We have 1,400 innovative companies in the broader tech triangle. And we have an amazing pipeline of new talent for companies relocating to the tech triangle because we have 10 different colleges.”

Myer pointed to several sites in Downtown Brooklyn that could host Amazon. Rabsky Group could build an office building as large as 770,000 square feet on its vacant parcel at 625 Fulton Street, and RedSky Capital could develop a huge commercial and residential project on its assemblage bounded by Dekalb Avenue, Flatbush Avenue and Fulton Street. And Tishman Speyer is developing the Wheeler, a 10-story office building, on top of the Art Deco Macy’s department store at 422 Fulton Street.

CPEX Real Estate’s Timothy King, the brokerage’s managing partner, pointed out that Amazon would have convenient access to plenty of retail and amenities in Downtown Brooklyn, including hospitals, hotels, shopping, restaurants and bars. And when you consider Atlantic Terminal, the broader tech triangle offers 13 subway lines. “Short of going out in the desert somewhere and building some kind of utopian village,” he said, “I’d be hard pressed to find some place better for Amazon than beautiful Downtown Brooklyn.”—Rebecca Baird-Remba


Source: commercial

Javits Center and Moynihan Train Hall Push Up Construction Starts in August

Construction has ramped up in New York City—boosted by the start of massive institutional projects such as the Jacob K. Javits Convention Center expansion and the Moynihan Train Hall conversion.

The dollar amount for construction starts in New York City for nonresidential buildings spiked for the month of August, as $3.66 billion worth of projects commenced, notching a 203 percent jump from the same period last year when it was $1.21 billion, according to information Dodge Data & Analytics provided to Commercial Observer.

Dodge defines the category of institutional projects as education centers, health care facilities, transportation terminals, amusement venues and churches.

The results differ from the more investor-focused nonresidential commercial buildings, such as offices, retail, warehouses and garage spaces, which have been in a slump. As CO previously reported, for the first half of the 2017, construction starts for commercial buildings not including institutional developments fell 35 percent year-over-year to $3.72 billion from $8.14 billion in 2016.

However, when including institutional developments, the city has seen $12.36 billion worth of nonresidential building construction year to date through August, a 54 percent increase from the first eight months of 2016 when it was $8.02 billion.

29882836071 9f41672bee o Javits Center and Moynihan Train Hall Push Up Construction Starts in August
A rendering of the Moynihan Train Hall. Photo courtesy: SOM

“What this means is that as we approach the peak of a nonresidential building cycle, institutional building makes a larger contribution towards keeping the expansion going,” said Robert Murray, Dodge’s chief economist. “This is the typical progression of a nonresidential building cycle, because it generally takes longer to get the financing arranged for institutional building projects.”

The Javits Center project and the Moynihan Train Hall are both in Manhattan, so that borough led the way with $3.06 billion in the month.

Brooklyn landed in second place with a 117 percent increase to $402 million in construction starts in August, up from $185.6 million. In Kings County, like Manhattan, institutional projects played a big role in the amount of development that launched in August. Two of the largest projects that began that month were the new $92.7 million elementary school P.S. 746 at 244-254 58th Street in Sunset Park, and the $74.4 million renovation and expansion of P.S. 32 at 317 Hoyt Street in Gowanus.  

For the first eight months of the year, Queens saw the largest percentage jump in construction starts for nonresidential buildings. The borough witnessed a 256 percent gain to $4.2 billion year as of the end August from $1.18 billion during the same time frame last year. This enormous jump is also due to one institutional project: the redevelopment of the Central Terminal B building at LaGuardia Airport, which Dodge said accounted for $3.4 billion.

On the horizon, Murray expects more institutional projects to begin soon, such as redevelopment work at John F. Kennedy International Airport and other projects at LaGuardia.

He also said at least one massive commercial office building that is not an institutional project started last month—50 Hudson Yards—and it will show up in Dodge’s next construction starts report later this month. Related Companies, Oxford Properties Group and Mitsui Fudosan America closed on nearly $4 billion in financing for 50 Hudson Yards last month, as CO reported at the time.

“[The construction market] is not heading for a collapse anytime soon,” Murray said.


Source: commercial

Forty Developers and Organizations Vie for New Amazon HQ in New York City

New York City has received more than two dozen proposals for a new Amazon headquarters from landlords and organizations across the five boroughs, the New York City Economic Development Corporation announced today.

The proposals amount to 50 million square feet of potential commercial space in 23 different neighborhoods, the city said in a press release. More than 40 different organizations and developers submitted responses including at least 50 individual sites, according to the agency.

Just as it finished up work on the first phase of its biosphere-inspired headquarters in Seattle, Amazon issued a request for proposals from cities for a second headquarters on Sept. 7.

The e-commerce giant laid out preferences for cities with more than a million people, a stable and friendly business environment, and “the potential to attract and retain strong technical talent.” Amazon asked for cities to find sites that could offer up to 500,000 square feet of commercial space by 2019 and up to 8 million square feet beyond 2027. It expects to pour $5 billion into construction of the new campus, which would employ up to 50,000 workers.

A week later, EDC issued its own request for expressions of interest, canvassing for landlords and communities in New York who would be willing to meet Amazon’s ambitious requirements for a new campus. The city will present its proposal by October 19, which is Amazon’s deadline

“From the moment Amazon released its request for proposals, New York’s real estate, business, and community leaders have worked together to best position the city to win the company’s second headquarters,” Deputy Mayor Alicia Glen said in today’s release.

Borough presidents have also been making pitches to lure Amazon to their corners of New York City. Brooklyn Beep Eric Adams touted the construction of the “Innovation Coast” in Williamsburg and Industry City. As part of his proposal, Adams convinced a handful of powerful Brooklyn landlords to team up, in order to cobble together enough space to house Amazon’s massive proposed development. Jamestown, Rudin Management, Forest City New York and Rubenstein Partners agreed to band together, Crain’s New York Business reported. Jamestown could offer up all or part of its 6-million-square-foot Industry City complex in Sunset Park, and Rudin could lease out its Dock 72 project at the Brooklyn Navy Yard.  

And Bronx Borough President Ruben Diaz highlighted a wave of new investment and development in the borough, as well as its transit and highway connections that make it easy both to get upstate and down to Manhattan.  

Of course, the mega-retailer already has a significant presence in the five boroughs. Earlier this month, it inked deals for 360,000 square feet of office space at 5 Manhattan West and a $100 million, 855,000-square-foot distribution center on Staten Island.

But Related Companies Chairman Stephen Ross recently summed up what many urban planning experts have already said about New York’s unlikely bid. “I can’t see them coming to New York,” he told Bloomberg last week. “As much as I would like to see them, the cost of doing business in New York is far greater than anywhere else. And they’re always looking to do things—at the scale that they do things—not at the highest price point.”


Source: commercial