How long will it take for Related to fully develop its Hudson Yards area?
Nearly two years ago to the day, Related Companies agreed to pay the MTA $1 billion for the rights to the Hudson Yards land. As the real estate market collapsed, though, the two sides delayed signing the deal as various benchmarks for payments were negotiated.
Today, the MTA and Related finally announced a contract for the rights. The deal calls for the MTA to lease the land to Related for 99 years with various purchase options, and in return, the MTA will earn $1 billion for capital programs. Related plans to build 12 million square feet of commercial and residential development.
“This is a tremendously exciting development project that together with the extension of the 7 line will turn this area into a vibrant residential and commercial neighborhood,” MTA Chairman and CEO Jay H. Walder said in a statement. “We were also able to maximize value for the MTA and provide a new revenue stream to support many of our vital capital projects.”
Although Related will now put $21.75 million down as a deposit with two more payments of around $11 million due in November and next May, the deal won’t close until the economy hits various benchmarks. Related will now begin searching for tenants willing to commit to office space that won’t be ready for years, and the company will have to build a deck over the LIRR rail yards without disrupting service.
In related Related news, the real estate company also unveiled a new funding partner. After dropping Goldman Sachs earlier this year, Related will team up with the Ontario Municipal Employees Retirement System, a Canadian pension fund. The fund will provide Related with, according to The Wall Street Journal, “up to $475 million in equity.” With this infusion of capital, Related now believes work on the Hudson Yards “will be under way before the triggers are hit.” The 7 line extension, which will open well before the development takes off, will help spur this development. Now, let’s see the MTA and New York City find the money for the stop at 41st St. and 10th Ave.
6 comments
How long will it take for Related to fully develop its Hudson Yards area? Ben, it depends. Are you in some way related? LOL
In a related story from the Times, there’s too much unoccupied office space that is unable to be subdivided do to configuration issues.
In adition, there several new buildings comeing online in midtown shortly & Related wants to flood the CRE market with more expencive square footage? Good luck with getting that off the ground.
Could this money be used to fund the station at 10 ave or ha it already been designated to be allocated somewhere?
Good grief, they’re partnering with a municipal pension fund?! They do understand that those things are going bankrupt left and right, yes?
[…] Related and MTA Finally Finalize Hudson Yards Deal (NY1, 2nd Ave Sagas) […]
The following article comes from Retail Traffic
Hudson Yards Developers to Start Preparatory Work
Dec 17, 2010 10:37 AM
Related Cos. and Oxford Properties Group entered into a contract to begin preparatory work on the Hudson Yards, a 26-acre mixed-use development project in New York City. When completed, Hudson Yards will contain 13 million square feet of commercial and residential space, including 5,000 residential units, a destination retail complex, a five star, 300-room hotel and a 750-seat public school, as well as 12 acres of public open space. Tishman Construction Corp. will handle the four-month deconstruction process to pave the way for the development, with construction scheduled to begin as early as 2012.
“The Hudson Yards represents the future of New York and the commencement of this preparatory work marks an important milestone in its development,” said Stephen M. Ross, chairman and CEO of Related Cos., in a statement. “Over 65 percent of Manhattan’s office stock is over 50 years old and New York City needs the modern, green, high-tech office space that only we can provide at Hudson Yards in order to retain our competitive advantage in the global market for corporate tenants. Over the past year we have made tremendous progress in developing the most commercially viable solutions for office tenants in New York. With unsurpassed transportation infrastructure, amenities, large flexible floor plates and generous tax incentives, we have created a compelling offering and the marketplace is responding.”
The Hudson Yards will benefit from a number of transportation investments around the site, including the extension of the Number 7 subway line, which will link the project to local and regional rail transportation.
The Domain Cos. to Build Mixed-Use Center in New Orleans
The Domain Cos. will develop South Market District, a mixed-use, transit-oriented development in New Orleans. The project will encompass a five-block area across from the Superdome and New Orleans Arena and will include 450 apartment units and 170,000 square feet of upscale retail, restaurants and entertainment venues.
Domain plans to break ground on the first phase of the development in late 2011, with completion scheduled for the second half of 2013.
RED Opens First Phase of CityScape in Phoenix
RED opened Phase I of CityScape, a 2.5-million-square-foot mixed-use development in Phoenix. Callison provided master planning, architecture and interior design for the project. Phase II, which will consist of a hotel and retail components, is currently under construction.
Watt Commercial Redevelops California’s Palo Woods Center
Watt Commercial Properties completed the redevelopment of Palo Woods Shopping Center in Harbor City, Calif. The $14 million project included the conversion of an existing Kmart building into two separate retail spaces, upgrading façade treatments and making improvements to landscaping, draining, lighting and the parking lot.
New Cinema Grill Signs Lease at Missouri City Shopping Center
TMJ Property Services and Pinnacle Alliance Fund Inc. purchased Missouri City Shopping Center, a 5.5-acre retail property in Missouri City, Texas, for new tenants AutoZone and Star Cinema Grill. Star Cinema Grill will occupy approximately 40,000 square feet of space, with nine theaters, 1,300 seats and a full restaurant and bar. Kristen Barker, of Wulfe & Co. Inc. represented Star Cinema Grill in its lease.
Divaris Appoints Susan McGee SVP of Leasing
Divaris Real Estate Inc. appointed Susan McGee as senior vice president of shopping center leasing in its Rockville, Md. office. In her new position McGee will be responsible for tenant and landlord representation and will support the expansion of the firm’s services in the metropolitan Washington, D.C. region. McGee, who at one point in her prior career worked at Divaris, has held leasing positions with Renaud Consulting and Carl M. Freeman Associates Inc., among other companies.
Regency to Renovate Baltimore’s Southside Marketplace
Regency Centers completed an interior and exterior store remodel of Shoppers Food & Pharmacy store at Southside Marketplace in Baltimore, Md. The remodel is part of a $7 million renovation taking place at the 125,146-square-foot neighborhood shopping center. Eventual upgrades will include a new exterior façade, new pedestrian plaza, updated architectural components and improvements to signage, lighting, landscaping and the parking lot. Completion is scheduled for May 2011.
In addition, Regency signed a 12,750-square-foot lease with Sports Lab, a sport-specific strength training, conditioning and rehabilitation center, at its Roswell Crossing shopping center in the Atlanta metro market. Andre Jones, of ICON Commercial Interest, represented Sports Lab in the transaction. The business plans to open its new location in January.
Regency also signed six smaller leases at Roswell Crossing and Powers Ferry Square, also in the Atlanta market. The tenants included Your Pie, Barkers Red Hots, Pretty Please, Pigtails & Crewcuts, Cup Cake Lingerie and Full Cup.
Other Notable News
ICSC promoted Jorge Lizan to vice president of business development. In his new position, Lizan will continue to manage business activities and programs in Latin America, in addition to managing new business initiatives for ICSC globally. Lizan has more than 15 years of experience in real estate.
Charles Dunn Co. hired Ron Azad as senior managing director of real estate services. In his new position, Azad will be responsible for overseeing the firm’s property management and asset management operations. Prior to joining Charles Dunn, Azad worked as managing director of portfolio management and development with Adler Realty Investments.
Grubb & Ellis Co. hired Richard L. Jarocki Jr. as managing director of debt and equity finance. Prior to joining Grubb & Ellis, Jarocki worked at Rock Financial Consulting, where he advised fund managers and financial institutions on debt vehicles and processes.
CB Richard Ellis appointed John Merrill as managing director and market leader for its Indianapolis operations. Merrill has been a part of CBRE’s investment properties group for the past 14 years.
Callison hired Shawn Rush as associate principal in its Seattle office. In her new position, Rush will focus on business development for the firm’s global retail studio. She has more than 25 years of experience in architecture and design.