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Category ArchiveTF Cornerstone

Cheezus: Artisanal Is Not Returning to Park Avenue (South)

Artisanal Fromagerie Bistro, which filed for bankruptcy in March 2017 shortly before it was slated to open at its new home on Park Avenue South, is no longer bowing.

Its 10,550-square-foot TF Cornerstone space (7,550 square feet at grade and 3,000 square feet—usable—in the basement) at the base of the 12-story office building at 387 Park Avenue South is now back on the market with an asking rent of $225 per square foot, a spokeswoman for the landlord told Commercial Observer. She declined to respond to questions about Artisanal but signage for the bistro was dismantled recently.

Winick Realty Group’s Aaron Fishbein, who is the broker for the retail space at the 215,000-square-foot building along with colleague Steven Baker, said they got possession of the Artisanal space in the beginning of January. He, too, declined to talk about Artisanal except to say that Barry’s Bootcamp took 4,600 square feet of the 12,150-square-foot ground-floor space and Artisanal took the balance of it, as well as the basement.

In February 2015, the landlord of 2 Park Avenue, Morgan Stanley, decided not to renew Artisanal’s lease, the same month Artisanal formed a new ownership entity with Artisanal owner Stephanie Schulman, who is romantically linked to the previous owner Vincent S. Bonfittodrory, a.k.a. Sarid Drory. As CO reported in November 2015, Artisanal signed a lease to relocate to 285 PAS from 2 Park Avenue.

The cheese-focused brasserie was initially going to open in the new digs on Park Avenue South between East 27th and East 28th Streets in summer 2016. The company filed for Chapter 11 bankruptcy in August 2016 and then again in March 2017. The latter one—in which Artisanal allegedly owes its former landlord over $3 million for unpaid rent, etc.—is still ongoing. The summer 2016 opening date got delayed to June 2017, and those plans have faded away. Meanwhile, Artisanal’s website doesn’t reflect a change in plans.

“Their plan to leave all their liabilities with the old entity did not work,” weighed in Adam Stein-Sapir, a co-managing partner of Pioneer Funding Group, which specializes in analyzing and investing in bankruptcy cases, and who is not involved in the case. “Also because of the controversy over the first filing they may have had trouble raising new money to open the second restaurant.”

The developer acquired the pre-war building in 2005 and gave it a makeover in early 2015, including a glass facade from the base to the third floor, and renovations to the lobby, elevators and roof deck featuring a glass penthouse.

A. Mitchell Greene of Robinson Brog Leinwand Greene Genovese & Gluck, the attorney for the eatery during the March 2017 bankruptcy, didn’t respond to requests for comment.

Source: commercial

While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine

Long Island City, Queens, has long been treated like Williamsburg, Brooklyn’s not-quite-ready-for-prime-time little brother.

Both waterfront communities are one stop from Manhattan and have seen great gusts of development since the beginning of the millennium, but Williamsburg has been the pricier, more desirable and cooler of the two. (Even though LIC had a much greater transportation network: eight subway lines, 15 buses and two ferry stations.)

Well, that’s likely to change when the L train takes a 15-month hiatus starting in April 2019 so the Metropolitan Transportation Authority can repair tunnels damaged by 2012’s Superstorm Sandy, real estate professionals say. (The L shutdown will interrupt 225,000 riders that ride the line between Manhattan and Brooklyn daily.)

“A bunch of residents that came to tour our building said ‘Williamsburg and Greenpoint is not for us—my commute can’t suffer [15 months] or longer,’ ” David Brause, the president of Brause Realty, which is completing a 38-story rental tower in LIC, told Commercial Observer.

fxcollaborative the forge photo by eduard hueber 02 While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine
The Forge, Brause Realty’s 38-story rental in LIC. Photo: FXCollaborative

As Brause pointed out, “This is not an isolated story.”

Brause is among a fair number of developers and brokers that informed CO of the exodus from Williamsburg to LIC. David Maundrell, Citi Habitats’ executive vice president of new developments for Brooklyn and Queens, said that just this past weekend his office had five people from Williamsburg looking for rentals in LIC.

“It’s really just worrisome to a lot of people that there is no real solution but buses and Uber,” said Eric Benaim, the president, chief executive officer and founder of Long Island City-based Modern Spaces. “In four or five minutes you can be in Midtown Manhattan [from LIC]. And we have great parkland, and there are a lot of things to do here now.”

And he added, “There is obviously a buzz. I get all the time that ‘I’m hearing a lot of good things about Long Island City.’ ”

Another thing pushing residents to the Queens neighborhood: cheaper rents. The average rental unit in LIC was priced at $2,291 per month for a studio and $2,904 for a one-bedroom apartment, according to Modern Spaces’ fourth-quarter 2017 market report. Meanwhile, in Williamsburg it was $2,671 per month on average for a studio and $3,076 for a one-bedroom, according to Citi Habitats’ report for the same period.

And besides price and proximity to Manhattan, this isn’t your grandfather’s LIC—heck, it isn’t even your father’s LIC. There are more than 170,000 residents, 106,000 workers and 6,600 businesses in the neighborhood, according to the local economic development organization, the Long Island City Partnership.

Since 2006 more than 14,100 rental apartments and condominium units have been completed and there are another 19,100 in the planning stages or currently under construction. By 2020, the retail market is poised to more than double in size, adding 508,000 square feet to the current 325,000 square feet.

“Long Island City was once viewed as a location for convenience. Ten years ago you would move to Long Island City because you worked in [the] Grand Central [Terminal area], and you moved to Williamsburg because you wanted to live there,” said Stribling & Associates’ Patrick Smith, a resident of LIC and a residential agent that works in the area. “But what has happened over the course of the past 10 years is Long Island City is now perceived as a lifestyle neighborhood.”

Waterfront parks and good restaurants have sprouted up in the last few years in LIC, including Michelin-starred Casa Enrique and the highly respected Italian eatery Levante; art institutions like MoMA P.S. 1 and the Sculpture Center; two Food Cellar grocery stores and a Duane Reade; fitness facilities such as The Cliffs at LIC and Brooklyn Boulders; and schools, including the expanded P.S./I.S. 78Q and Cornell Tech on Roosevelt Island (which is technically a part of Manhattan, but it’s pretty much in LIC).

And some of the retailers are picking up on the Williamsburg-to-LIC shuffle. The Gutter, a bar and bowling alley that opened in Williamsburg in 2007, opened an outpost in LIC last year. And Sweet Chick, the popular chicken and waffles concept started on Williamsburg’s Bedford Avenue by John Seymour and rapper Nasir “Nas” Jones, announced in November 2017 plans to open an LIC eatery.

“LIC has some great restaurants and places to hang out,” said Helena Durst, a principal at Durst Organization. “It has a very cool vibe to it.”

Durst, in fact, is comfortable making a 765-foot tall bet in the neighborhood. The developer filed plans last July with the New York City Department of Buildings to erect a rental tower at 29-55 Northern Boulevard with 958 units—70 percent of which will be market-rate—and 15,000 square feet of retail. There will also be more than a half acre of open space.

Durst purchased the site in December 2016 from Property Markets Group and Hakim Organization for $175 million. The previous developers were planning a 66-story building at the site, which has a landmarked Clock Tower building with 53,000 square feet of commercial space. The developer is still planning out amenities in the building, but it banks on attracting professionals looking for value.

“We see the residential market continue to grow as people keep getting priced out of Manhattan,” Durst said.

Durst is hardly the only one who’s placing bets in LIC and as the skyscrapers keep rising, developers are trying to one-up each other with their amenity packages.

15 rooftoppool park completion 2 170313 While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine
Jackson Park will have a rooftop pool and two-acre park. Rendering: Tishman Speyer

“Renters are looking for new products that are highly amenitized,” said Erik Rose, a managing director for residential development in the New York region for Tishman Speyer. “They’ll even move out of buildings that are two and three years old for the latest and greatest.”

Tishman Speyer is expected to complete construction of its 1,871-unit, three-building rental named Jackson Park in LIC at the end of this year. The tallest structure—at 28-34 Jackson Avenue—will rise 53 stories.

The complex surrounds a two-acre private park, complete with dog run, children’s play area, outdoor seating, Ping-Pong tables, barbecue pits and bocce courts (because bocce tournaments are a thing in LIC, Rose said). In addition, there will be a 45,000-square-foot, five-story building with lounges, fitness center, 75-foot pool, sauna and full basketball court.

Brause Realty and Gotham Organization have really turned it up at their 38-story LIC building at 44-28th Purves Street named The Forge. Leasing for the 272 units started in August 2017, and it’s already 50 percent leased. The building comes with 26,000 square feet of amenity space including an outdoor pool (pools, by the way, are commonplace at new luxury LIC rentals), movie screen, hammocks, fitness center, bike storage, residents’ lounge and rooftop lounge with views of the Manhattan skyline and art installations. The building is also feng shui-certified, and the developers are seeking a Leadership in Energy and Environmental Design Silver designation.

Nearby is G&M Realty’s two-building 1,151-rental-unit complex at 22-44 Jackson Avenue. The project includes a 48-story structure and 41-story tower, both at the former site of 5 Pointz, the once-great graffiti complex. Amenities will include bike storage, pet grooming and other pet services, a swimming pool, a game room, a laundry room, a fitness center and a courtyard.

And Rockrose Development Corp. is building a 54-story rental at the former Eagle Electric Factory at 43-22 Queens Street called Eagle Lofts with 790 units. Building highlights: roof decks and 15,000 square feet of interior amenity space for a fitness center, an entertainment lounge, rooftop barbecue areas, a yoga studio, a media screening room, a children’s playroom and a library. And all apartments will come with washers and dryers.

Last April, Rockrose opened a 51-story building with 974 apartments (195 affordable) in LIC at 43-25 Hunter Street called Hayden. It’s already 85 percent leased and has 18,000 square feet of amenities—5,360-square-foot fitness center, full-sized basketball court, billiard room, solarium, yoga studio, Zen garden, media room, children’s playroom, rooftop terraces and all the units have washers and dryers.

The competition for renters is so stiff that landlords are giving away rent to woo tenants.

“You can do a two-year lease with one to three months of free rent,” Smith said. “Some developers are paying brokers’ fees.”

But LIC will be more than just another outer-borough bedroom community. Large mixed-use projects with office and retail spaces are on the way to beef up the office market.

Tishman Speyer is building The Jacx, a 1.2-million-square-foot office and retail building at 28-10 Queens Plaza South, where WeWork has already signed on for 225,000 square feet and Bloomingdales inked a deal for 550,000-square-foot offices.

The Jacx will also include over 50,000 square feet of curated retail space, including a market, food hall, upscale dining, boutique fitness center, 175 bike spaces and an onsite valet garage for 550 vehicles, according to the project website.

Another mixed-use megaproject is the TF Cornerstone-led development in the 4.5-acre Anable Basin inlet section of LIC.

rendering licic While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine
TF Cornerstone and its partners are development a mixed-use project in the Anable Basin section of LIC. Rendering: TF Cornerstone.

Alongside partners Greenpoint Manufacturing and Design Center, Coalition for Queens and BJH Advisors, TF Cornerstone was selected by the New York City Economic Development Corporation last July to build it. The two-tower development will feature 1,000 apartments, and one of the two towers will reach 650 feet.

In addition, it will house 400,000 square feet for offices and 100,000 square feet for light industrial use. The plans also call for an 80,000-square-foot public school, a 25,000-square-foot performing arts training facility and 19,000 square feet of retail.

“One of the primary goals of this project is to support the commercial, technology, artisan and industrial businesses of Long Island City, while also balancing that work environment with market and affordable housing,” Jake Elghanayan, a principal and senior vice president at TF Cornerstone, said in a statement when the project was announced. “By providing dedicated space for skilled job training programs, the project will generate a diverse set of economic and employment opportunities for New Yorkers.”   

Most of the Williamsburg folks looking to move to LIC are renters seeking short-term space—for 15 months—while the L train is shut down, according to Smith.

Home buying is a whole other subject. The L train shutdown won’t deter potential homebuyers from plunking down money in Williamsburg if they have the long game in mind, Smith said.

Part of the problem in LIC is a lack of inventory. Until now there was not much in the way of condos in the neighborhood, as most developers took advantage of 421a to build rentals with an affordable component. Nearly 2,800 of the 17,000 units planned in LIC between now and 2020 will be condos, according to Citi Habitats’ Maundrell.

But many condo projects have been announced recently, and Benaim is predicting a shift away from rentals soon.

“I think there is going to be a condo boom probably like by the third quarter of this year,” Benaim said. “We [will be marketing] buildings as small as 12 to 15 units and as large as 800 units.”

That 800-unit condo project at 23-15 44th Drive is called Court Square City View Tower. Developer Jiashu “Chris” Xu’s United Construction & Development Group is building the planned 66-story structure that is slated to rise 984 feet, making it the tallest structure in Queens.

Other LIC residential condo projects include Slate Property Group and Carlyle Group’s 88 unit building at 21-21 44th Drive and the 65-unit 5 Court Square by David Wu.

Condos are already achieving similar pricing to Williamsburg. The average condo in LIC sold for $1.1 million at $1,174 per square foot, according to data from Modern Spaces’ fourth-quarter 2017 report. In Williamsburg on the other hand it averaged $1.2 million at $1,264 per square foot, according to the Citi Habitats report.

“[LIC] has an extremely strong condo market, because there is really no supply and a lot of demand,” Maundrell said. “The demographic that is moving into Long Island City would like to buy but they can’t.”

With all of the new skyscrapers that will be popping up around LIC, one could mistake it for parts of Manhattan—just don’t call it Billionaires’ Row for non-billionaires.

“I wouldn’t call it Billionaires’ Row, because Billionaires’ Row has Central Park to look at,” Maundrell said. “And Billionaires’ Row doesn’t have rental buildings.”

It might not be West 57th Street in Manhattan, and it might not be Bedford Avenue in Williamsburg—but it is something exciting.

Source: commercial

TF Cornerstone Lands $144M Wells Fargo Refi for 45 Wall Street

Wells Fargo has provided TF Cornerstone with a $144 million Freddie Mac financing package to refinance the developer’s residential skyscraper at 45 Wall Street, according to property records filed today with New York City Department of Finance.

The loan, which closed on Dec. 15, replaces a $134 million Fannie Mae loan that was assigned to J.P. Morgan Chase on Nov. 30. Wells Fargo’s $144 million Freddie Mac refinance paid that loan off, and the bank provided an additional $9.8 million in proceeds, records show.

buildingphoto 55 TF Cornerstone Lands $144M Wells Fargo Refi for 45 Wall Street
Entrance to 45 Wall Street. Courtesy: CoStar Group.

J.P Morgan provided a modification in the form of a first mortgage in order to give the borrower time to refinance its maturing Fannie Mae debt—which was then assigned to Wells Fargo two weeks later.

The 27-story, 493,187-square-foot residential high-rise building—located between William and Broad Streets in the Financial District—was built in 1958 and is comprised of 435 residential and five commercial units, according to PropertyShark. Eight of the residential units are vacant, according to TF Cornerstone’s website. Monthly rents at the property run from $2,845 for studios to $6,849 for three-bedrooms.

The building’s use was converted from office to residential in 1996, and is the former headquarters of Atlantic Insurance Company, according to CoStar Group. Chase Bank and Tourbillon are the building’s largest commercial tenants, occupying 8,341 square feet and 2,952 square feet, respectively.

Representatives for Wells Fargo and for TF Cornerstone did not provide comment before publication. 

Source: commercial

Deli, Pizza Joint Ink Deals at TF Cornerstone’s DoBro Rental

A convenience store (in two leases) and a restaurant will take more than 4,500 square feet at TF Cornerstone’s new 714 unit rental project in Downtown Brooklyn at 33 Bond Street, Commercial Observer has learned.  

Dépanneur, a Brooklyn-based store that calls itself a “better bodega,” has signed two leases at 300 Livingston Street (the retail portion of 33 Bond Street) for two separate ground-floor spaces, according to Winick Realty Group.

The larger of the spaces, which is 1,820 square feet, will be an upscale “corner store” similar to the ones the company has in Williamsburg at 242 Wythe Avenue at North 3rd Street and in Clinton Hill at 519 Myrtle Avenue at the corner of Grand Avenue.

Dépanneur’s second space at 300 Livingston Street will encompass 1,051 square feet, and there it is working on a new concept, according to a Winick spokeswoman.

Both Dépanneur deals are for 15 years and the stores are expected to open in the second quarter of 2018. The asking rent in the deals was $125 per square foot.

Winick’s Steven Baker, Aaron Fishbein and Daniyel Cohen handled the deals for the landlord alongside TF Cornerstone’s Steve Gonzalez in-house. Ripco Real Estate’s Andrew Clemens and Ben Weiner, who represented Dépanneur in the deals, did not immediately respond to a request for comment.

In addition to the transactions with Dépanneur, fast-casual pizza restaurant Simó Pizza has signed a 10-year deal for a 1,633-square-foot space on the ground floor of 300 Livingston Street. Simó Pizza, created by Italian chef and restaurateur Simone Falco, did not have a broker in the deal. It is also expected to open in the second quarter of 2018. The asking rent was $125 per square foot as well.

“Dépanneur and Simó Pizza are ideal tenants for the unique retail mix we’re in the process of curating at… 33 Bond Street,” Baker in a prepared statement. “From a strategy standpoint, the retailers we’ve secured leases for represent the best possible value to the neighborhood. Additionally, they offer residents of 33 Bond with an amenity that positively contributes to their active lifestyles.”

Simó Pizza and the Dépanneur stores will join a 52,000-square-foot fitness concept by Chelsea Piers, which signed a lease at 33 Bond Street in July, as CO previously reported.

Source: commercial

Owners Magazine 2017: Interviews with NYC’s Top Landlords

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At the risk of stating the forehead-slapping obvious, it’s been a strange 12 months.

There’s been a mixture of good and bad real estate news that can paint a picture of continued stability or darkening clouds on the horizon, depending on your point of view.

By October, the vacancy rate in all three major Manhattan markets for office space appeared to be falling, per Cushman & Wakefield data. Hundreds of thousands of square feet have been leased by Spotify, GroupM, Amazon and others. All of that is inarguably good news.

However, a year ago, few people knew that we were sitting on a retail powder keg ready to blow and take some of the biggest names in the industry with it, like Toys “R” Us, Aerosoles, Payless, Radio Shack…you get the idea. This is inarguably bad.

This is one of the reasons why it’s important to have a magazine like this one.

Yes, the data, the deals and the numbers are critical to understanding the state of real estate. But it’s also important to get a sense of what the key players are thinking right now. That’s why we asked 36 of the biggest names in the business what their vision of the market looks like.

We’ve supplemented these questionnaires with our own reported features.

Last year, New York was considered immune to the vicissitudes of the world economy because we were always a safe, stable place to park cash. That looked like less of a sure bet when China announced new outbound investment rules. Lauren Elkies Schram examines the topic in her story in this issue.

Some in the real estate community long hoped for a challenge to Mayor Bill de Blasio in this year’s mayoral election and put substantial money behind Paul Massey (one of their own) to take the reins of City Hall before that fizzled out. At the risk of propagating a Dewey-Truman blooper (we ship this magazine before Election Day), Aaron Short reported what developers are expecting and hoping for in de Blasio’s second term.

While many developers have spent the last few years touting the Far West Side of Manhattan, there is actually quite a bit of activity on the East River, something that Rey Mashayekhi examines in depth.

Finally, Liam La Guerre looked at something that’s always been written off as anathema to real estate developers: technology. It turns out, the shrewd owners are not only interested in tech, but they’re also developing their own. — Max Gross 

Source: commercial

Lendlease Hires Acquisition Manager to Grow Development Business

As part of its efforts to become a major developer in the United States, Australia-based construction and real estate investment company Lendlease recently hired real estate development associate Christie Walker from Wood Partners to be the company’s acquisition manager, Commercial Observer has learned.

With about a decade of experience, Walker is responsible for sourcing, negotiating and underwriting deals to acquire land and create joint ventures for development projects. She works directly with Melissa Román Burch, executive general manager of development.

“We are actively building our capabilities and expertise in acquisitions to support our investment and development objectives in New York,” Burch said in a prepared statement. “Christie brings a strong track record in large-scale acquisitions to Lendlease during this exciting time of growth for the firm.”

Currently, Lendlease has just one project under development in New York City—the Rafael Viñoly-designed 65-story, 130-unit condominium at 277 Fifth Avenue between East 31st and East 32nd Streets. That tower, which is being built in collaboration with Victor Group, is expected to be completed in 2019.

Walker will be looking for further opportunities to build on that project; she is trying to identify large-scale developments (200,000 square feet and up) in the five boroughs and the metro area. She officially started at Lendlease on Sept. 25.

“We are really looking to develop all asset classes of real estate,” Walker, 31, said. “We have a very broad mandate—condos, rentals, office and mixed-use. Really opportunities where we can create a sense of place.”

Lendlease’s hiring of Walker is also reflective of its efforts to expand diversity at the firm; the company recently began a campaign to hire more female graduates and give internships to more women. “Working alongside another female executive like Melissa Burch is a very exciting prospect for me,” Walker said. “It’s actually the first time that I’ll be working for a woman. I am excited about our mission to develop a large pipeline in the city.”

Prior to Wood Partners, where she worked for about two years, Walker was an associate in investments at RXR Realty, and began her career at Rockrose Development in 2008, shortly before the company split off TF Cornerstone. Walker went to the TF Cornerstone side and assisted with the deal teams to acquire the land for 1.2 million-square-foot rental at 606 West 57th Street in Midtown and and the 714-apartment building at 33 Bond Street in Downtown Brooklyn.

Walker, a native of Nashville, received a economic policy degree from New York University in 2008.  

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

Is ‘DoBro’ Finally Happening?

For more than a decade, Downtown Brooklyn was always about to turn a corner in terms of livability—or so developers said.

In 2007, Albee Development—a consortium of Acadia Realty Trust, Curbcut Urban Partners and Washington Square Partners—purchased the site of the former Albee Square Mall, expecting to hit the ground running on a new and exciting shopping, entertainment and residential destination. 

Then, of course, everything fell off a cliff.

“We bought the property in ’07—a defunct, failed, multilevel retail project that had tried to find success on Fulton Street for several decades with the expectation that we were going to be going great guns through ’08 and ’09,” said Acadia Chief Operating Officer Christopher Conlon. “Our project, along with many others, stalled from 2008 to 2011.”

While predictions for a more residential, leisure-oriented Downtown Brooklyn have been giddy for at least a decade, it is only now, on the heels of the recent opening of Albee Development’s project—the long-awaited City Point—and its amenities, such as the Alamo Drafthouse movie theater and the DeKalb Market food hall, that the business district’s lifestyle potential is coming to fruition.

“First come the people. Then comes the necessity retail—dry cleaners, liquor stores, candy stores. Then after that, when the critical mass is here, that’s when the last wave comes in and you get the leisure and nighttime activities,” said Brooklyn broker Timothy King, the managing partner at CPEX Real Estate Services.

That’s where DoBro appears to be in 2017 with a slew of dining and drinking options either open or in the works.

“The neighborhood went from the sort of place where, if you passed out on the sidewalk at night, they wouldn’t find you until the next day, to where it’s much more of a neighborhood,” King said.

The area’s expansion has been underway since then-New York City Mayor Michael Bloomberg and the City Council passed the Downtown Brooklyn Plan in 2004, a rezoning which, according to the city’s website, allowed for “the creation of 4.5 million square feet of new commercial office space, 800,000 square feet of retail, 1,000 units of housing, new open space and retail amenities, as well as streetscape improvements.”

ric 2406 pano dtedit Is DoBro Finally Happening?
City Point in Downtown Brooklyn. Photo: Acadia Realty Trust

As it happened, many of the plans that came together over the next several years were put on hold due to the 2008 financial crisis.

“The rezoning was a pre-financial-crisis event,” Conlon said. “Had there not been a global financial crisis right after the rezoning, [this development] probably would have happened a lot sooner. The development world shut down with the crisis, and people couldn’t get financed. Tenants weren’t moving, and everything sort of seized up.”

But the crisis was simply the first obstacle. Once it abated and development money began freeing up, you still had a very buttoned-up, office-centered neighborhood with little residential presence or nightlife. This evolved slowly, as many developers waited for others to make the first move.

Residential was the first to push ahead. Slowly high-rise apartment buildings like The Brooklyner at 111 Lawrence Street and 388 Bridge Street and Avalon Willoughby West at 100 Willoughby Street kept rising year after year in Downtown Brooklyn and surpassing one another as the tallest building in Brooklyn, bringing thousands of residents to the area.

But catering to these residents stagnated. Conlon recalls how retailers would send representatives into the area to scout potential locations.

“They would get orders from their corporate office—‘Go find us a store in Brooklyn,’” he said. “So they would send their retail real estate experts out to Brooklyn, and they would take the subway out and walk around…[and a] lot of retailers looked and were like, ‘I don’t get it,’ and they just left. They went to Williamsburg.”

Of course, they could hardly be blamed for failing to see the potential for a vibrant social and shopping life in an area that had virtually none.

“Downtown Brooklyn has always been a very bustling place during the commercial hours—there are 100,000 office workers there every day—but after dark, when those businesses close down, it got very quiet,” said Tucker Reed, a principal at Brooklyn-based Totem Real Estate and the president of the Downtown Brooklyn Partnership until last year.

“I remember three or four years ago went Ganso, a little Japanese ramen place on Hoyt Street, opened up, and we were like, ‘That’s a game changer’—the first neighborhood scale restaurant isn’t an iconic destination like Juniors or something. When Macy’s closed at 7 o’clock, the neighborhood was pretty deserted.”

“No business wants to take the risk until the neighborhood has changed,” said Jake Elghanayan, a senior vice president at TF Cornerstone, which recently unveiled the 25-story, 714-unit residential rental building 33 Bond at the corner of Bond Street and Atlantic Avenue and will open a 52,000-square-foot outpost of Chelsea Piers in the building in the spring of 2018. It became a catch-22.

“It’s difficult to get retailers to be the first one in, so everything takes a little longer because there’s always a nervousness about going into a new neighborhood for a retailer. So the deals we’ve had, we’ve had to try to de-risk the opportunity for the retailer, showing how the demographics and the population will change in the next few years.”

There were occasional signs of life and hope from independent operators over the years. Brooklyn Fare, the supermarket that evolved to include a four-star eatery, opened in 2009 at 200 Schermerhorn Street at Hoyt Street; the Catskills-inspired bar Livingston Manor opened at 42 Hoyt Street, by Livingston Street, in 2014. 

But the most likely catalyst for heavy activity was the progress of City Point, which opened last year at 445 Albee Square West, bringing with it an outpost of the food-and-drink-offering movie chain Alamo Drafthouse, as well as the 60,000-square-foot, 40-vendor DeKalb Market.

“People believed in the market before City Point opened, knowing it was on the horizon,” said Dan Marks, a partner at TerraCRG. “Just knowing that a project of that scale is on the way gave people a lot of confidence to build there.”

But City Point’s first salvo has been very impressive: Conlon said that the Drafthouse, which will add a beer garden to its already existing House of Wax restaurant this fall, is already No. 1 in sales among the chain’s 43 theaters nationwide.

house of wax full shot photo by victoria stevens Is DoBro Finally Happening?
The House of Wax bar at City Point in Downtown Brooklyn. Photo: Victoria Stevens

In addition to Alamo, DeKalb Market, Trader Joe’s and Century 21, as well as other retail outlets setting up shop at City Point, the area will be getting Brooklyn’s second Apple Store at the 32-story 300 Ashland Place, a Two Trees Property on Ashland Place near Lafayette Avenue, which also houses 379 luxury rental units, and will host the new Whole Foods 365 outlet, a BAM movie theater and a branch of the Brooklyn Public Library.

Other offerings include the 6,000-square-foot brewpub Circa Brewing Company, at 141 Lawrence Street between Willoughby and Fulton Streets, which offers beer brewed on the premises to drink along with its wood-fired pizza.

The Kimoto Rooftop Garden Lounge is now open at 216 Duffield Street between Willoughby and Fulton Streets, above the Aloft and Sheraton Hotels, with “breathtaking views of the Statue of Liberty, Barclays Center and Hudson River,” according to their website, along with its Asian-inspired menu.

The Ashland offers the second New York outpost of the Gotham Market food hall with highlights like the “beer, bourbon and barbecue” joint Mason Jar, the brick-oven pizzeria Apizza Regionale and the premium chicken outlet Flip Bird. 

Inside 33 Bond, TF Cornerstone will host the second Brooklyn outlet of Devoción, which describes itself as “the only exclusively farm-to-table coffee roaster in the world.”

“They have their first location in Williamsburg,” Elghanayan said. “It’s a beautiful store that’s won lots of awards and has great Colombian coffee. We thought it was a great offering, and they’ll probably be open before the spring.”

While the proliferation of leisure could be seen as long overdue, some believe it a natural progression that’s happening right on time.

There will almost certainly be no shortage of foot traffic in the neighborhood—the residential and mixed-use developments aren’t letting up. Projects like the aforementioned 58-story, 826-unit AVA DoBro (also known as Avalon Willoughby West) at 100 Willoughby Street, from Avalon Communities; Steiner NYC’s 600-unit The Hub, at 333 Schermerhorn Street; and The Ashland at 250 Ashland Place, from The Gotham Organization, a 53-story tower with 586 rentals, have begun giving the area the density it needs to support a vibrant social and community life.

Given the area’s proximity to so many already thriving Brooklyn neighborhoods, Regina Myer, the current president of the Downtown Brooklyn Partnership, added that the new retail offerings add to an already rich assortment of cultural offerings not far away.

“The culture has always been here,” Myer said, referring to such entities as BAM, BRIC and the Theater for a New Audience. “They’re the ones that have been making Downtown Brooklyn a great place to come and see entertainment for years. So it’s amazing now that there are great places to eat finally, how that’s really catching up.”

Given some of the new projects on the way, the area is hardly done experiencing new places to eat, drink and be merry. The mixed-use Caesura at 280 Ashland Place, being developed by the Jonathan Rose Companies at the corner of Lafayette Avenue, in addition to offering 123 rental apartments will host the Center for Fiction, the Mark Morris Dance Group and a 2,800-square-foot craft brand restaurant from the founders of ‘Wichcraft. The project is due to be completed this year.

Longtime city residents have marked the neighborhood’s growth in traditional New York ways.

“To me, a great indicator [of the neighborhood’s change] is the ability to catch a cab by Fulton Mall,” Reed said. “All of a sudden, there are cabs stopping by the corner of Willoughby Street. Before—and before Uber—you had to walk back to Fort Greene or Brooklyn Heights to find a cab… The cabs follow demand.”

What’s most exciting to those with whom Commercial Observer spoke is that the current explosion feels like the tip of the iceberg. Now that Downtown Brooklyn is massing growth and showing both a desire for, and the success of, more leisure and lifestyle-oriented outlets, the floodgates are open now for exponential growth in the years to come.

“If you took a panoramic picture of the neighborhood five years ago and laid it next to the same picture from today, people might think you were speaking about a different city. The same will hold true five years from now,” King said. “Retailers are like a herd of animals—very few retailers like to be the first guy in. But once the marketplace is established and proven, it’s an awful lot easier to get the next folks to follow.”

Source: commercial

Chelsea Piers Plans 52K-SF Gym in Downtown Brooklyn

Source: commercial

Farm-to-Table Coffee Roasters Devoción Opening Second Brooklyn Location

Devoción, a Colombia-based coffee purveyor, is opening its second Brooklyn café, this one at TF Cornerstone’s 300 Livingston Street, the retail component at the base of the residential building known as 33 Bond, in Downtown Brooklyn, Commercial Observer has learned.

“Our second New York location is, to some degree, more important than our first, so I am excited to have found such a great location in Brooklyn that is evolving quickly,” said Steven Sutton, the founder of Devoción, in prepared remarks.

The ground-floor space is 1,722 square feet and the 40-seat café will open in late-2017, according to a spokeswoman for Winick Realty Group. The asking rent in the 15-year deal was $125 per square foot, she said.

The café will offer the brand’s trademark farm-fresh direct trade coffee, as well as in-house freshly baked pastries and sandwiches.

“With a network of over 400 microlot farms throughout Colombia, Devoción is the only true farm-to-table coffee roaster serving the freshest coffee in the U.S. as they overnight their beans from Bogota to their Williamsburg showroom via FedEx for roasting in as little as 10 days from ‘green state,’ ” Winick said in a news release.

300 livingston street Farm to Table Coffee Roasters Devoción Opening Second Brooklyn Location
Rendering of 300 Livingston Street. Image: Courtesy of Winick Realty Group

Steve N. Gonzalez, the director of retail leasing at TF Cornerstone, said Devoción offers “a unique concept that will greatly serve the 714 residential units in the building, as well as the ever evolving retail landscape of Downtown Brooklyn and Boerum Hill.”

Winick’s Steven E. Baker, Aaron S. Fishbein and Daniyel Cohen represented TF Cornerstone. Jordan Covell of Covell Consulting represented Devoción. Covell didn’t immediately respond to an email inquiry.

“The building at 300 Livingston Street is uniquely situated between two of Brooklyn’s fastest-growing neighborhoods and, specifically, it is positioned on the traffic path that leads Boerum Hill residents to the many area train stations,” Baker said in a statement. “This accessibility helped draw Devocion to 300 Livingston Street and will help to make them a staple to the neighborhood.”

Founded in 2006 in Colombia, Devoción then came to New York City in 2013, at 69 Grand Street at Whythe Street in Williamsburg.

As CO previously reported, the development at 300 Livingston Street is 25 stories with 714 units, 20 percent of which will be affordable, along with 55,000 square feet of retail over two floors. Devoción marks the first tenant to sign on in the retail portion. The building has been topped off and is slated to come online by the middle of this year.

Source: commercial