30.5.12
Silverstein Building a Residential Hat on a Tower?
It seems like such a possibility may come to pass based on the news in the Full Story below. Few facts that would describe the tower to be built at 514 11th Avenue are available. The Full Story below even makes mention of the overall size of the building not being laid out- right after suggesting that it will be around 60 stories.
So what educated guess can we make of what Silverstein has planned for this site?
Bounded by 11th Avenue, the Lincoln Tunnel Approach, 40th and 41st Street, 514 11th Avenue occupies the majority of the north easterly block in the recently rezoned Hudson Yards area. If any of you readers haven't dug through the zoning details of the Hudson Yards Special Purpose District, we would highly recommend it. Better yet, contact us at Cubed Advisory and we'll fill you in on the details. In broad brushstrokes it involves some hefty FAR bonuses and transferable development rights that should create a landrush similar to what was recently seen in Chelsea. It also has some tightly controlled use restrictions all with the intent of molding a bright future for approximately 100 acres of Manhattan.
For 514 11th Avenue, this translates into the following possibility:
With a lot area of 105,050SF and a base FAR of 10, it is already a large development with 1.05MSF as of right. The Hudson Yards District provides a bonus of an additional FAR of 10 (for a total of 20) if certain conditions are met.
The easy condition is that bonus FAR of 10 through 18 (840,400SF for a total of 1.89MSF) can only be obtained by contributing to the cities "District Improvement Fund". A clever, albeit naked, way to have private development shoulder some of the cities costs associated with Hudson Yards, the District Improvement Bonus is available at a cost of $100/SF in 2005 money. The code does provide a rule stating that the "contribution" is to be adjusted for inflation, which is around $118 in 2012 money. It also stipulates cash up front before any DOB or CPC approvals are received. Still, purchasing the equivalent of land in NYC for $118SF buildable is quite a steal.
The slightly more difficult- read expensive- condition to get the site from an FAR of 18 to 20 and max out the buildable area at 2.1MSF is to transfer land from the blocks between 10th and 11th Avenues, and 30th to 33rd Street- known as the "Eastern Railyards". Transfer means purchase and if a similar situation in Chelsea is any example, this could get pricey. Currently this land is owned in it's entirety by the MTA. This option is only available once the DIB capped FAR of 18 has been achieved through "contributions".
Of course there is a "but" in all this bonus area somewhere and it is where the residential hat mentioned in the title comes in. The Hudson Yard zoning also tightens up the usual zoning rules regarding residential use in commercial areas and vice versa. 514 11th Avenue is to be a commercial area per the new rules and must fufill an FAR of 14 as commercial use before any residential will be permitted on the site. Thats as-of-right FAR of 10, plus and additional FAR of 4 (420kSF for a $50M "contribution") for a total of 1.4MSF of commercial space before the first apartment can be built. NYC zoning clearly lays out that residential use goes above commercial and therein lies the hat.
At Cubed Advisory, we are expecting Silverstein to at some point announce a 1.9 to 2.1MSF development, with a full site, 2 story, retail base of 210kSF (as noted in the Full Story below). On top of this will be an office tower of 1.26MSF wearing a residential hat of 420kSF to 630kSF, depending on how much space Silverstein can purchase from the MTA's Eastern Railyards.
Of course, this is Silverstein and he may just rewrite the rules purely on speculation. He has done it before.
Full Story
So what educated guess can we make of what Silverstein has planned for this site?
Bounded by 11th Avenue, the Lincoln Tunnel Approach, 40th and 41st Street, 514 11th Avenue occupies the majority of the north easterly block in the recently rezoned Hudson Yards area. If any of you readers haven't dug through the zoning details of the Hudson Yards Special Purpose District, we would highly recommend it. Better yet, contact us at Cubed Advisory and we'll fill you in on the details. In broad brushstrokes it involves some hefty FAR bonuses and transferable development rights that should create a landrush similar to what was recently seen in Chelsea. It also has some tightly controlled use restrictions all with the intent of molding a bright future for approximately 100 acres of Manhattan.
For 514 11th Avenue, this translates into the following possibility:
With a lot area of 105,050SF and a base FAR of 10, it is already a large development with 1.05MSF as of right. The Hudson Yards District provides a bonus of an additional FAR of 10 (for a total of 20) if certain conditions are met.
The easy condition is that bonus FAR of 10 through 18 (840,400SF for a total of 1.89MSF) can only be obtained by contributing to the cities "District Improvement Fund". A clever, albeit naked, way to have private development shoulder some of the cities costs associated with Hudson Yards, the District Improvement Bonus is available at a cost of $100/SF in 2005 money. The code does provide a rule stating that the "contribution" is to be adjusted for inflation, which is around $118 in 2012 money. It also stipulates cash up front before any DOB or CPC approvals are received. Still, purchasing the equivalent of land in NYC for $118SF buildable is quite a steal.
The slightly more difficult- read expensive- condition to get the site from an FAR of 18 to 20 and max out the buildable area at 2.1MSF is to transfer land from the blocks between 10th and 11th Avenues, and 30th to 33rd Street- known as the "Eastern Railyards". Transfer means purchase and if a similar situation in Chelsea is any example, this could get pricey. Currently this land is owned in it's entirety by the MTA. This option is only available once the DIB capped FAR of 18 has been achieved through "contributions".
Of course there is a "but" in all this bonus area somewhere and it is where the residential hat mentioned in the title comes in. The Hudson Yard zoning also tightens up the usual zoning rules regarding residential use in commercial areas and vice versa. 514 11th Avenue is to be a commercial area per the new rules and must fufill an FAR of 14 as commercial use before any residential will be permitted on the site. Thats as-of-right FAR of 10, plus and additional FAR of 4 (420kSF for a $50M "contribution") for a total of 1.4MSF of commercial space before the first apartment can be built. NYC zoning clearly lays out that residential use goes above commercial and therein lies the hat.
At Cubed Advisory, we are expecting Silverstein to at some point announce a 1.9 to 2.1MSF development, with a full site, 2 story, retail base of 210kSF (as noted in the Full Story below). On top of this will be an office tower of 1.26MSF wearing a residential hat of 420kSF to 630kSF, depending on how much space Silverstein can purchase from the MTA's Eastern Railyards.
Of course, this is Silverstein and he may just rewrite the rules purely on speculation. He has done it before.
Full Story
Labels: 514 11th Avenue, commercial, development, Hudson Yards, residential, Robert K. Futterman, Silverstein Properties
23.5.12
SPURA- At Freakin' Last!
As outlined in the Full Story below, the decades long example of the dark side of politics and the public process when it seriously goes awry- SPURA- has finally received the approval of Community Board 3.
It only took 50 years.
Currently a 7 acre blight of parking lots, the SPURA site was cleared out in the 50's to create the then ideal urban form of towers in a park. A form better known today as a housing project. Decades of political torpor and community intransigence over broken promises has finally taken a step forward with the acceptance of a plan to develop 1.65M SF of space. 1M SF of retail and approximately 900 housing units- half of which would be inclusionary housing.
At Cubed Advisory, we aren't even going to make a guess as to the value of all of this. It still has a way to go before becoming a reality and it certainly won't be one project with one set of numbers governing it. There simply isn't a meaningful way to value this or even access individual elements that will have any bearing on it's future reality. We'll just leave it as being 7 acres in the middle of Manhattan and let the mind boggle.
For those of you who want a preview of what could one day be coming to the site in terms of massing, FAR and general comportment- the EDC has posted Beyer Blinder Belle's full set of drawings in three parts- here, here and here.
Full Story
It only took 50 years.
Currently a 7 acre blight of parking lots, the SPURA site was cleared out in the 50's to create the then ideal urban form of towers in a park. A form better known today as a housing project. Decades of political torpor and community intransigence over broken promises has finally taken a step forward with the acceptance of a plan to develop 1.65M SF of space. 1M SF of retail and approximately 900 housing units- half of which would be inclusionary housing.
At Cubed Advisory, we aren't even going to make a guess as to the value of all of this. It still has a way to go before becoming a reality and it certainly won't be one project with one set of numbers governing it. There simply isn't a meaningful way to value this or even access individual elements that will have any bearing on it's future reality. We'll just leave it as being 7 acres in the middle of Manhattan and let the mind boggle.
For those of you who want a preview of what could one day be coming to the site in terms of massing, FAR and general comportment- the EDC has posted Beyer Blinder Belle's full set of drawings in three parts- here, here and here.
Full Story
Labels: Beyer Blinder Belle, CB3, Lower East Side, SPURA
22.5.12
Caveat Emptor...
...or why it pays to do a little due diligence.
Call it the Facebook IPO mindset or just some very optimistic marketing, but the development site described in the Full Story below, would appear to be over reaching what is reasonable.
Located at 79-89 Avenue D and currently occupied by a one story Rite Aid, Eastern Consolidated has put a price tag on the property of $22.5M. The site clearly has a large footprint and a (locally) impressive buildable SF of around 72k. This number swells to 96kSF buildable when 20% of the residential floor area is designated low income.
The problem is in the location. Similar to 109 Gold Street that we previously blogged about, 79-89 Avenue D is sitting across the street from a public housing project. In this case it is the Jacob Riis Houses. These buildings will limit the rent potential of units built on the site and will kill all but the most bargain priced condo development.
We have been putting our 'Cubed Advisory back-of-the-napkin-estimate' technique to this one as a multifamily rental and just aren't seeing a $/SF rent that will make the asking price make sense. With residential rents in the micro area facing the Jacob Riis houses struggling to get out of the $45/SF range, an all market rate building could expect to bring in around $2.6M annually or $2.9M with a blend of low income and market rate- an increase made less viable when the cost of construction is factored in. With that kind of income backed up against a very rough construction cost, the land barely touches a useful value of $10M. That is under $140/SF buildable, which is not coincidentally close to what Eastern Consolidated quotes as nearby comps (for properties not facing a housing project). But, it certainly is nowhere near the $234/SF buildable asking price for the bonused model or $311/SF buildable as of right.
What this site, does have going for it is it's footprint. With typical lots in the area being 2500SF, the 13kSF footprint of 79-89 Avenue D has the ability to support a very large retail space. In fact it currently is one and is probably making over $800k a year in rent from it already. It is this potential for a large retail space/spaces that can command a higher rent than residential (~$62/SF on the block) and contribute a little over 30% to the rent roll that will allow bids for this site to approach what Eastern Consolidated is asking. Again, the 'Cubed Advisory back-of-the-napkin-estimate' would figure the land could command a price of $20M as a ground floor retail development with housing above. Still 10% below the ask.
All that remains to be seen now is whether the site languishes pending a market dictated price chop. Of course if some smart developer with plans to change the micro market of Avenue D can find an underwriter willing to prop up the financial model, well- that could work too.
Full Story
Call it the Facebook IPO mindset or just some very optimistic marketing, but the development site described in the Full Story below, would appear to be over reaching what is reasonable.
Located at 79-89 Avenue D and currently occupied by a one story Rite Aid, Eastern Consolidated has put a price tag on the property of $22.5M. The site clearly has a large footprint and a (locally) impressive buildable SF of around 72k. This number swells to 96kSF buildable when 20% of the residential floor area is designated low income.
The problem is in the location. Similar to 109 Gold Street that we previously blogged about, 79-89 Avenue D is sitting across the street from a public housing project. In this case it is the Jacob Riis Houses. These buildings will limit the rent potential of units built on the site and will kill all but the most bargain priced condo development.
We have been putting our 'Cubed Advisory back-of-the-napkin-estimate' technique to this one as a multifamily rental and just aren't seeing a $/SF rent that will make the asking price make sense. With residential rents in the micro area facing the Jacob Riis houses struggling to get out of the $45/SF range, an all market rate building could expect to bring in around $2.6M annually or $2.9M with a blend of low income and market rate- an increase made less viable when the cost of construction is factored in. With that kind of income backed up against a very rough construction cost, the land barely touches a useful value of $10M. That is under $140/SF buildable, which is not coincidentally close to what Eastern Consolidated quotes as nearby comps (for properties not facing a housing project). But, it certainly is nowhere near the $234/SF buildable asking price for the bonused model or $311/SF buildable as of right.
What this site, does have going for it is it's footprint. With typical lots in the area being 2500SF, the 13kSF footprint of 79-89 Avenue D has the ability to support a very large retail space. In fact it currently is one and is probably making over $800k a year in rent from it already. It is this potential for a large retail space/spaces that can command a higher rent than residential (~$62/SF on the block) and contribute a little over 30% to the rent roll that will allow bids for this site to approach what Eastern Consolidated is asking. Again, the 'Cubed Advisory back-of-the-napkin-estimate' would figure the land could command a price of $20M as a ground floor retail development with housing above. Still 10% below the ask.
All that remains to be seen now is whether the site languishes pending a market dictated price chop. Of course if some smart developer with plans to change the micro market of Avenue D can find an underwriter willing to prop up the financial model, well- that could work too.
Full Story
Labels: affordable housing, development, East Village, Eastern Consolidated, multifamily