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Originally Posted by BStyles
Anywho, back to Hudson Yards. It's a good thing nothing will get built until they start landing some tenants. That means that they have plenty of time to change the designs(unless this was the final design, which I highly doubt).
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They'll get their tenant. The first tower is expected to begin construction early next year, and they're already talking to many potential tenants. But even without one, they may have to begin sooner than they would like.
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The company is under pressure to get moving, given its agreement with the Metropolitan Transportation Authority, which owns the 26-acre rail yards. The agreement calls for the developer to begin paying hefty rental payments once an improving office market hits an 11% availability rate. It is currently 12.6%, down from 15% a year ago.
"The efforts we are undertaking ensure we are ramped up and ready to go because it's hard to predict exactly when you are going to hit on your first and second tenant deals," says Mr. Cross. "This market is very diverse when it comes to large users, and the market seems to be very resilient."
Related is focusing its planning on starting a 1.4 million-square-foot building on the southeast corner of the rail yards that would have up to 1 million square feet of office space, topped with 25 floors of apartments, according to Mr. Cross.
This 800-foot-plus tower would sit on firm ground, while the rest of the site requires an expensive roof to first be built over the tracks.
Like many developers, Related plans to effectively give away the office space at cost to a major tenant—asking for rents of about $70 a foot—while it would look to make its money on the residential above
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More on the development...
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By Steve Cuozzo
Stephen M. Ross's Related Cos. has a leathery catch on the line for its planned Hudson Yards development project -- New York-based luxury goods maker Coach, Inc.
Sources told us booming Coach is prowling for up to 600,000 square feet of office space on the West Side for a new corporate home. "Coach has been exchanging paper" with Related regarding Hudson Yards as well as with other landlords in the area, the sources said.
The company owns its 265,000-square-foot headquarters building at 516 W. 34th St., which it once used for manufacturing and where it still maintains a small factory to produce samples.
It also has a few hundred thousand square feet at 450 W. 33rd St. and at a smaller building on 34th Street. "Now, they've outgrown their premises," a source explained.
There's no letter of intent for Hudson Yards, at least not yet. But a source described the Related talks as "still a work in progress but very serious." Financially strong Coach currently has around $1 billion in cash on its balance sheet to play with.
The 26-acre Hudson Yards site bounded by 10th and 12th avenues between West 30th-33rd Streets -- most of it above the West Side rail yard -- is to be developed by Related and OMERS, the Ontario Municipal Employees Retirement System. Last May, Related signed a deal with the MTA to lease the site for 99 years, with the partners putting in a $21.75 million deposit.
The project is eventually to include 21 million square feet of development. The master plan calls for three corporate headquarters sites, 5,000 apartments in nine buildings, "destination" retail, a luxury hotel, a new public school, cultural facilities and 12 acres of public open space.
It was understood last night that Coach and Related weren't focused only on one of the office sites, but were exploring "options" at all three.
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The third tower is the one on the western yards.
From globest.com
http://www.globest.com/news/1812_181.../305414-1.html
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Related Cos. and Oxford Properties Group said Thursday they’re beginning preparatory work.
The first step will be the demolition of the circa-1930s Metals Purchasing Building, a process that a Related spokeswoman tells GlobeSt.com will cost $2 million and take around four months. Tishman Construction Corp. is managing the deconstruction.
Jay Cross, president of Related Oxford Hudson Yards, tells GlobeSt.com the terra firma segment of the 26-acre development site would likely represent the best option for delivering a building “for a tenant that wants to be in by a certain time. Since it’s the site that could be delivered the most quickly, we felt it was the site that should be prepared the earliest.”
Additionally, Cross says the 60,000-square-foot Metals Purchasing Building straddles Hudson Yards and the next segment of the High Line, the elevated park being built on disused railroad right of way. The terra firma segment of the Hudson Yards site had also been used until recently as a staging area for the New York City Department of Environmental Protection’s ongoing Water Tunnel No. 3 project. “They’ve finished their work, they’ve cleared out and now we can move in and use it as a staging area,” he says.
Much of the site will be built on a platform over the LIRR’s tracks, which are in daily use by the Metropolitan Transportation Authority, from which Related Oxford is leasing the site. With factors such as ventilation and life safety issues being taken into account, “we feel the platform design is really starting to come together, and our intention is to go back into the construction marketplace early in 2011 to test our assumptions,” says Cross.
The idea is to finalize the platform design during the course of next year, he adds, so that construction on the platform could begin as early as 2012. “That’s predicated on the assumption that we would reach our first major tenant deal” next year and therefore be in a position to have to start work in ’12.
To date, that first major tenant hasn’t materialized, although the New York Post reported last month that luxury goods maker Coach Inc. is considering the site. “First and foremost, our challenge is in getting the word out that the Yards are ready to go,” says Cross.
He notes that the Number 7 subway line extension to the Far West Side is on schedule to be completed by 2014, and as for Hudson Yards itself, “all of our agreements are in place with the MTA and all of our approvals are in place with the city. Really, there’s nothing contingent on our starting except securing tenants. That’s news to a lot of people.” Once it’s more generally known, Cross predicts it will get tenant momentum going.
“In particular, the large user market is realizing that there aren’t great chunks of space available,” he says. “And for these large users, the lead times are considerable, because they’re moving a lot of employees. For anyone looking at a lease expiry in 2015, 2016 or 2017, all of a sudden we’ve become a pretty viable option.”
Related Oxford will not be obligated to close on the deal with the MTA, and start paying its 99-year lease, until Midtown’s office availability rate declines to 11%, apartment sale prices reach an average $1,200 per square foot and the AIA Architectural Billings Index hits 50. The latter two of those triggers have already been met, as Cross noted during a RealShare New York panel discussion in October. As for Midtown’s availability rate reaching the contractual threshold, Cross says it’s reasonable to expect that to happen “during the next nine to 15 months.”
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Last edited by NYguy; Mar 31, 2011 at 5:15 AM.
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