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Thread: NYC Commercial Real Estate

  1. #1036
    Disgruntled Optimist lofter1's Avatar
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    Jun 2005
    NYC - Downtown


    Quote Originally Posted by londonlawyer View Post

    ... I'll bet that some gems on this stretch will be razed before this one.
    Another new hotel going into a great old building at the SE corner of Broadway / West 28th.

  2. #1037
    NYC Aficionado from Oz Merry's Avatar
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    Oct 2002

    Default Chambers Street

    Downtown’s next ground zero of construction: Chambers St.

    Traffic going by P.S. 234, one of five school buildings near the construction area.
    Right: The Chambers St. work will go from West St. to Broadway.

    By Julie Shapiro

    Chambers St. may be the next Fulton St.

    Starting perhaps as soon as April, the jackhammers, dust and water shutdowns that have plagued Fulton St. for the past two-and-a-half years will be heading north and west. Just like on Fulton St., the impetus for the Chambers St. project is a crumbling water main that needs to be replaced.

    The three-year, $24.5 million project will tear up Chambers St. between West St. and Broadway. In addition to replacing a water main from the 1880s, the city will also upgrade utilities and sewers and add improved street finishes like pigmented sidewalks, granite curbs and new streetlights, said Craig Chin, spokesperson for the city Dept. of Design and Construction.

    Many of the businesses on Chambers St. had not heard of the project — though one said, “They’ve been saying that [the project would start] for seven years” — and they were not pleased when told about it. On Fulton St., plywood barricades have made it impossible for pedestrians to see across the street and discourage them from lingering to shop.

    “It’s going to kill us,” said Izik Pinkhasoe, a manager at Ray’s Barber Shop on Chambers St. between Church St. and W. Broadway.

    The shop looked crowded at lunchtime on a recent weekday, but Pinkhasoe said business has dropped 60 percent in the past year, as layoffs mean fewer people working in the neighborhood. Pinkhasoe suggested that the city do the bulk of the water main work at night and on weekends, so as not to disrupt businesses.

    “This is more of an office area,” he said.

    As on Fulton St., the city will likely balance water shutoffs and other inconveniences between the needs of residents and business owners, whose desires often conflict. Doing the work entirely during off-peak hours would make the project take much longer, and some business owners said the city should do the work as quickly as possible to get it over with.

    But Mark Mozaffari, owner of the Trilogy Photo Lab on the same block as Ray’s, also said the city should work mostly at night and on the weekends — even though he lives above his store and would have to deal with the noise.

    “As long as they leave my business running, it’s okay,” Mozaffari said.

    Some small businesses on Chambers St. will be able to apply for the Lower Manhattan Development Corp.’s Small Firm Assistance Program, which offers grants of up to $25,000 to businesses with 50 or fewer employees on streets closed by construction. However, the L.M.D.C.’s $5 million program is slated to last only through the end of 2010, while the Chambers St. work will continue into 2013.

    In addition to affecting local businesses, the project will likely snarl traffic in Lower Manhattan’s already crowded streets. Chambers St. is a key east-west connector for cars traveling between the West Side Highway and the Brooklyn Bridge, and two buses run along parts of Chambers St. as well. The street is also home to the Tweed Courthouse incubator schools, Stuyvesant High School and the Borough of Manhattan Community College.

    Especially during rush hour, the sidewalks are crowded with people rushing to work, parents pushing strollers and tourists stopping to look at maps.

    The city has not formulated a detour plan yet, but they will present one to Community Board 1 early in 2010, the city Dept. of Transportation said. A spokesperson for the Lower Manhattan Construction Command Center said the agency would get involved later if D.O.T. and D.D.C. requested help.

    Downtown will get a first taste of what the construction will be like in January, when New York State’s Dept. of Transportation does its own 12-week water main project on Chambers St.

    As part of the larger Route 9A project, state D.O.T. is installing a water main at Chambers and West Sts. and is working on the crosswalk there, said Adam Levine, spokesperson for state D.O.T. That work will only affect the block of Chambers St. between West and Greenwich Sts.

    While that block of Chambers will be narrowed during the work, state D.O.T. hopes to keep two-way traffic flowing, said Bob Townley, a C.B. 1 member who attended a meeting on the project. If the street has to be made one-way, it will run westbound. In that case, the detour for cars traveling south on West St. would be to take a left on Canal St. and a quick right onto Greenwich St., then to travel back down to Chambers St. to head east, Townley said.

    Levine did not confirm details of the plan, but state D.O.T. is making a presentation to C.B. 1’s Tribeca Committee Jan. 13.

    The state D.O.T. project was originally slated to start Jan. 4 and end by the beginning of April, when the city work would start. But the state has delayed its start date to do more community notification, which could push back the start of the city’s work as well.

    Townley, who is also executive director of Manhattan Youth, wants to make sure that Warren St., one block south of Chambers, is not used as a detour during either the state’s brief project or the city’s longer one. Many young children travel on Warren St. to get to Manhattan Youth’s Downtown Community Center, as well as P.S. 234 and P.S. 89, where the group runs after-school programs.

    “I don’t envy their task,” Townley said of the detour planners. “It’s going to be interesting.”

    Michael Connolly, vice chairperson of C.B. 1’s Tribeca Committee, said that as long as the Chambers St. work was done in the most efficient way possible, he had no objections. To prevent businesses on Chambers St. from losing money, he suggested that the city replace any parking spaces that are lost during construction.

    Some small business owners on Chambers St. were unconcerned about the construction, which they saw as just more of the same.

    Steve Stoppert, one of the owners of Tribeca Hardware, said the street in front of his shop was torn up three times in the past few months, as different contractors went in to fix mistakes that others had made.

    Construction won’t stop regular customers from stopping by for a nut or a bolt, Stoppert said.

    “We don’t make much money, and we don’t care to make much money,” he said with a laugh.

  3. #1038
    Disgruntled Optimist lofter1's Avatar
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    Jun 2005
    NYC - Downtown


    Further Slide Seen in Commercial Real Estate

    January 8, 2010

    There are 920 football fields of available office space in Manhattan. More than 180 major buildings totaling $12.5 billion in value — from Columbus Tower at 1775 Broadway to the office tower 400 Madison Avenue — are in trouble, meaning in many cases they face foreclosure or bankruptcy, or have had problems making mortgage payments. Rents for commercial office space fell faster over the past two years than in any such period in the last half century.

    “I have been in the business for 12 years. I have never seen it this bad,” Peter Von Der Ahe, vice president of investments for the brokerage Marcus & Millichap, said of New York City’s commercial real estate market. According to more veteran colleagues, he said, things have not been so dire since at least the early 1990s.

    And that is not the most sobering assessment.

    “It hasn’t hit bottom,” Mr. Von Der Ahe added.

    He is not alone. More than half a dozen experts on commercial real estate in New York City said that despite some flickering signs of economic recovery here and elsewhere in the country, the universe of big buildings and giant apartment complexes has further to tumble.

    Rents, they say, will go lower. Vacancy rates are likely to rise, too. Owners of troubled properties will face a final day of reckoning and in some cases lose their properties.

    “We’re projecting the biggest value losses in the nation,”
    said Aaron Jodka, a senior real estate economist at Property and Portfolio Research, a Boston-based independent real estate research and advisory firm. He predicts that by 2011, the value of New York metropolitan area office buildings will decline by 58 percent from its late 2007 peak. It is already down 40 percent.

    Some experts point to the bright sides of a down market — for example, the opportunity to snap up some great bargains. They say that investors who already have been shopping in London for skyscraper deals may set their sights on Manhattan later this year to find deals, and that may fuel some growth in overall sales. Some New Yorkers, especially businesses who have found the market too costly, also may find some deals.

    “A correction might give opportunities,” said Jonathan Bowles, director of the Center for an Urban Future, an independent research group. “I think it’s healthy for the city’s real estate market to have a down cycle.”

    But most members of the real estate industry are lockstep in their pessimism, and the reasons are multiple: Jobs must recover first to fill offices with workers, and job growth in New York City has been all but invisible. Many buildings are also tied up in complex financial arrangements that could take years to unravel.

    Robert Bach, chief economist at the real estate brokerage Grubb & Ellis, compares recovery of the commercial market — which includes everything from office towers to rental apartment buildings to retail space — to turning a big ship around.

    Taxes on commercial buildings also make up a sizable share of the revenue base for the city. Residential and commercial development generated $307.7 million in tax revenues, not including property taxes, from 2000 to 2007, according to the Real Estate Board of New York. In fact, the industry had a $12.4 billion effect — including construction costs like salaries and purchases made by workers — on the local economy during that period.

    “The tax base is enormous,” said Michael Slattery, the board’s senior vice president of research. “It helps fund many of the basic services that make our city operate.”

    Richard Persichetti, director of New York research for Grubb & Ellis, said that when the economy started to slide, office rents fell faster than in any period recorded in at least 50 years. The city has become stuck with more available office space than any other central business district in the nation except Chicago, Washington and Boston. Mr. Persichetti predicts it will take until 2014 to make a major turnaround.

    “Rents probably won’t start to recover until job growth is created and some of that available space is absorbed,” he said.

    Some foreign investors may swoop in this year and buy up some of the city’s most desirable and stable skyscrapers, said Robert White, president of the research company Real Capital Analytics which tracks the city’s troubled properties. Then the city will be left with properties in financial difficulties that are half empty and in less coveted locations. Recovery for those buildings, Mr. White said, “is going to take a little bit longer. It’s not going to be in a rush.”

    No prospective deals on these buildings are apt to be helped by the fact that they are tied up in complicated mortgage structures that grew popular in the boom years. Joseph Harbert, chief operating officer for the New York City region of the commercial brokerage Cushman & Wakefield, says that working out ownership disputes for these buildings will take much longer than in past real estate meltdowns.

    “In the ’90s, when you had the real estate workouts, you had a lot of single-lender properties. There are more parties and interests in every deal,” said Mr. Harbert.

    Regardless of these complications, Mr. Harbert, who remains generally optimistic that parts of the real estate economy could recover this spring, says that lenders, skyscraper buyers and renters will not feel comfortable moving forward until they really see that jobs are being created.

    “They’re kind of waiting for positive signs in the economy,” he said. “When jobs are going to recover, that’s the signal of when people are going to lease and buy.”

    Copyright 2010 The New York Times Company

  4. #1039
    NYC Aficionado from Oz Merry's Avatar
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    Oct 2002


    Slow-motion death for commercial towers

    Troubled properties get stuck in vicious cycle as tenants stay clear

    By Peter Kiefer

    They are not easily recognizable, but they are out there all around us, on the streets of Midtown and Lower Manhattan.

    They are a growing breed of office towers, not quite alive but not entirely dead either. They are New York's City's zombie buildings. And within the commercial real estate world, once a building is tagged as a problem site, it has a difficult time shaking off the negative label, attracting tenants and finding rental income to nurse itself back to health.

    "It is a super-slow-motion thing that is occurring," said Glenn Markman, a commercial broker for Cushman & Wakefield, explaining the vicious cycle that many Manhattan buildings have gotten stuck in since the start of the downturn.

    Indeed, as more commercial loans mature in New York, more buildings here are in choppy financial waters, defaulting on loans, sliding into special servicing and potentially going into foreclosure. Now add to that a more cautious and thriftier tenant base (which is also being wooed with concessions and discounts from a wide array of landlords) and you have the recipe for a slow-motion death spiral for a commercial building.

    As the commercial market continues to worsen, prospective tenants are asking more questions about the financial guts of a building. And when they don't like what they hear, they are often walking away.

    Some of those potential tenants are also avoiding buildings with financial problems because their brokers are steering them clear of properties where the loan is in default or the owner seems to be in financial hot water. That fear stems from a concern that there will be an erosion of services in the building, a lack of upkeep and -- in the event of absentee ownership or foreclosure -- confusion over who has authority to renegotiate in the future.

    "You don't want to enter into a long-term relationship and long-term commitments when you can see that things are going to have the potential to unravel," Markman said.

    "It's one thing when you are in a tight market, but there are very good alternatives out there, so a well-brokered tenant is going to be able to cherry-pick and avoid the buildings that could go into bankruptcy or absentee ownership."

    By some rough estimates these troubled buildings may account for up to 20 million square feet of commercial space in Manhattan, according to lists provided by Real Capital Analytics and brokers who talked to The Real Deal.

    What's more, that amount of problem space is expected to grow in the next couple of years, as more loans are scheduled to come due.

    A number of landlords are scrambling to avoid a morbid fate. Some are offering deeper discounts to quickly fill the vacant space.

    Take Worldwide Plaza: Before George Comfort & Sons purchased the 47-story office complex from Deutsche Bank in July, it had hundreds of thousands of square feet of vacant space that couldn't be leased, according to Woody Heller, who heads Studley's capital transactions group.

    The building was tainted because it was part of Harry Macklowe's portfolio of Manhattan office towers that was purchased at the height of the market and then returned to lenders. "It had 700,000 square feet available, but if you wanted to lease space in that building, could you have? Not really," Heller said. "You could have gotten a space tour, but who was authorized to sign the lease? Who was authorized to sign a check or concession?"

    Since their purchase of the building, George Comfort & Sons has reportedly been in active negotiations for 1.5 million feet of potential leases at Worldwide Plaza, indicating that once a financially healthy owner steps in, things can turn around.

    Heller noted that there are two categories of available buildings: those that can make deals and those that can't. "Until the financial structure solidifies, it is unlikely a tenant broker will put their tenants in a position of peril," he said.

    In the case of 290 Madison, the building's deteriorating financial health appears to be tied to a growing vacancy rate.

    According to new reports, the six-story office building is owned by APF Properties, whose $11 million note was 60 days delinquent in October. The building was reportedly fully occupied at the time of the purchase in 2006.

    Today, it is 71 percent vacant, according to data from research firm Costar Group. Howard Kessler of Newmark Knight Frank is representing the building, but declined to comment.

    In response to a growing number of defaults, the Treasury Department released new rules in September designed to make it easier for distressed property owners to restructure loans that were packaged by Wall Street firms and sold as securities.

    The Timekeeper Building at 307 East 53rd Street is dealing with its own distress situation. "It really is a very, very frustrating situation," said Jerry Marshall, president and CEO of Amerimar, which owns the 31,000-square-foot building.

    Last month, the loan on the Timekeeper fell into default status. According to Marshall, Amerimar was procedurally forced to go into default after the firm reached out to their loan servicer for more time to invest in a build-out of their vacant space.

    Marshall said that Amerimar has a vacant suite and floor, but is hopeful that it can find a tenant in the coming weeks. He said the firm was not having trouble attracting tenants because of the default on the loan. He also said Amerimar was offering "competitive market deals without special incentives."

    One broker, who is representing a midsize Manhattan office building but asked to remain anonymous, said that attracting new tenants was a greater challenge than retaining current ones in buildings with financial problems.

    "If it is an educated tenant or broker, they are going to ask for certain measures to be taken and it is going to limit the owner's ability to make deals," the broker said.

    The most common measure, according to the broker, is a "non-disturb" agreement between a tenant and the landlord's lender. It is designed to ensure the tenant will remain in possession of the leased space even if there's a foreclosure action against the landlord.

  5. #1040


    Bolding my own. What most concerns me is the stuff about the Winter Garden. Hopefully the removal of the grand staircase means that the underground connector to the WTC will open up right into that area. Anyone know for sure?

    Aging World Financial Center set for overhaul

    Owner Brookfield ponders a major freshening as leases of two large tenants near expiration and work on new Ground Zero buildings proceeds; new West Street entry eyed.

    By Theresa Agovino

    Brookfield Properties has plans for a major renovation of World Financial Center, the mega office complex it owns downtown, which is at risk of losing two major tenants in the next three years. The decision to overhaul the aging property comes as some experts predict a sharp increase in lower Manhattan's vacancy rates in the next few years.

    Sources briefed on plans say Brookfield wants to create an entirely new entrance on West Street, eliminate the grand staircase which leads down to the signature Winter Garden from the east, and add more retail space.

    The company plans to present its ideas to its board next month for approval, according to one source close to company. Those briefed on the plans weren't given cost estimates or a timetable for the changes. Brookfield had no immediate comment.

    The space is more than 20 years old and will be competing for tenants with at least two new towers that are going up at Ground Zero. Those towers are slated to be completed by 2013.

    Merrill Lynch currently rents 3 million square feet at the center, but its lease expires in 2013. In 2008, Merrill Lynch was purchased by Bank of America, which has a new headquarters near Times Square on West 42nd Street as well as acres of other space in Manhattan. Real estate executives have wondered whether Bank of America would renew either the entire lease or part of it.

    Meanwhile, the lease on the vast bulk of the 510,000 square feet that Deloitte leases at the complex expires in three years, according to published reports. The firm has already hired Cushman & Wakefield Inc. to scout for what reports say is anywhere from 600,000 and 800,000 square feet. Deloitte has checked out numerous buildings but could also stay at the World Financial Center.

    Downtown's vacancy rate is currently 9.6%, the lowest in the city, according to Cushman & Wakefield. However, many expect it could spike as Goldman Sachs moves into its new headquarters just north of World Financial Center, AIG leaves the two towers it recently sold, and the new buildings open at the World Trade Center.

  6. #1041
    Disgruntled Optimist lofter1's Avatar
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    Jun 2005
    NYC - Downtown


    The staircase is one of the best aspects of the Winter Garden. Take it down and it turns the place into a big hallway. Dumb move.

  7. #1042


    Agreed, my first interior view of the Winter Garden was seen at the top of those stairs, after a visit to a friend working in one of the towers.
    It was a spectacular sight, looking down at the palm trees,
    marble floors and all the Glitz.
    The grand stairs make (mostly) the space what is.

  8. #1043


    The entrance facing the WTC is uninviting with the large glass curved drum concealing restrooms and the underside of the stairs; and effectively blocking out the glass atrium and palms.

    I think the space could work better if they removed the center portion of the stair. This would result in two grand staircases servicing opposite sides of the second level. The 2nd floor level that overlooks ground zero could still remain.

  9. #1044


    Quote Originally Posted by Derek2k3 View Post
    The entrance facing the WTC is uninviting with the large glass curved drum concealing restrooms and the underside of the stairs; and effectively blocking out the glass atrium and palms.

    I think the space could work better if they removed the center portion of the stair. This would result in two grand staircases servicing opposite sides of the second level. The 2nd floor level that overlooks ground zero could still remain.
    A great idea. Send an e-mail to Brookfield!

  10. #1045
    Build the Tower Verre antinimby's Avatar
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    Sep 2004
    in Limbo


    20 or so years old and it's already "aging."

    They don't make 'em like they used to, that's for sure.

  11. #1046


    Besides the design looking a little 80's, it looks fine. They replaced almost everything after 9/11.

    "Aging" here means it's not making as much money as they'd like.

  12. #1047


    They hired the generic shopping mall experts. They did the East River Mall in Harlem and Gateway Plaza.

    New York, NY
    500,00 square feet
    Expansion and renovation

    World Financial Center

    GreenbergFarrow is working on the retail and office portion of an ambitious project to more fully utilize the World Financial Center. The World Financial Center consists of four office towers, retail spaces, restaurants and the famous Winter Garden. The project includes connection to the new WTC, a new entrance pavilion, relocation of lobbies for the office towers and the complete reconstruction of the lower levels to accommodate additional retail spaces.

    This is looking north. West Street would be on the right, the marina on the left. You see the rotunda of 2WFC in the foreground and the Winter Garden further back with two restaurants around it.

    You can see they're simplifying the passageways and cutting openings in the 2nd level to make it more like a shopping mall. They're expanding the spaces east to be in line with West Street.

    Can't tell what will happen to the winter garden or how it will connect to the WTC. The proposed corridor is in line with the 2nd level of the Winter Garden that overlooks the WTC site.

    You can see how much room there is between the bases and West St. There will lots of retail between this and the WTC, - are there enough chain stores to go around for all this?

  13. #1048


    Ugh, I loathe NYC's big property developers. Loathe.

  14. #1049


    Are you freaking kidding me? They're actually going to add onto the buildings so they can fit more retail? What a bunch of clods.

  15. #1050
    Disgruntled Optimist lofter1's Avatar
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    Jun 2005
    NYC - Downtown


    There isn't all that much room on the east side between the bases at WFC and West Street, particularly at the north end. No doubt they can squeeze stuff in there, but let's just hope they do it with some grace.

    That stretch along West Street has always been fairly brutal and useless, but it played off the high bleak wall of the old WTC superblock platform to the east.

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