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In The Pipeline: CoStar Development & Construction News for Sept. 8 - 14

News and Notes on Trends, New Projects and Construction In the Commercial Real Estate Development Pipeline Around the U.S.
September 9, 2013

‘City Within a City’ Begins to Rise On NYC’s Far West Side

With three towers totaling more than 8.6 million square feet under construction to reclaim the World Trade Center site skyline over the next three years, it’s easy to forget that what may be the largest private real estate project in U.S. history is rising a few miles to the west.

Construction is now moving forward at a rapid clip at Hudson Yards, considered breathtakingly speculative five years ago during the downturn and looked upon cautiously by investors as recently as six months ago. Concrete is pouring for the first 52-story office building known as the South Tower at 30th Street and 10th Avenue.

The 1.7-million-square-foot, 895-foot tall tower is scheduled for completion on Manhattan’s far West Side in 2015. Leather-goods retailer Coach Inc. has leased 740,000 square feet to anchor the building, and cosmetics maker L’Oreal SA and SAP AG, a German software company, have leased 402,000 and 115,000 square feet, respectively, bringing the building to more than 85% committed. In a deal announced last month, supermarket chain Fairway will occupy 46,000 square feet of retail.

Related, Oxford, and architect/master planner Kohn Pedersen Fox (KPF) will pair the building with another spire, the 69-story North Tower, with Time Warner reportedly negotiating to relocate into 1 million square feet, leaving its current headquarters at Columbus Circle. Once that deal is complete, Related will begin construction of a mammoth platform over the rail lines.

In all, The Related Companies LP and Oxford Properties Group Inc. are developing up to 16 high-rises totaling more than 13 million square feet of office, residential, hotel and retail space on 26 acres at the site bordering the West Side Rail line along the Hudson River.

In The Pipeline is a column on significant acquisitions of commercial land for sale, and other transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new commercial real estate project -- and sign up to be added to our distribution list to receive future In the Pipeline columns by e-mail.

But Related and Oxford are hardly the only developers active in the area, which will eventually see at least 18 million square feet of construction, making it one of the largest private real estate projects in U.S. history.

The $15 billion project includes up to $6 billion in public infrastructure investment, anchored by the extension of the No. 7 subway train line to 11th Avenue and 34th Street. Public dollars are also funding the renovation and expansion of the Jacob Javits Center.

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Jay Paul Co. Begins Clearing Site for Office/Residential Tower

Demolition of the existing five-story structure at 181 Fremont St. has begun in preparation for a new 684,000-square-foot office and luxury residential tower in San Francisco's reconceived Transbay neighborhood.

Jay Paul Co. will start construction in November of the 54-story tower in the city’s reconceived Transbay neighborhood to be anchored by the future Transbay Transit Center, according to its commercial real estate advisor Cornish & Carey Commercial Newmark Knight Frank (C&CCNKF). Jay Paul Co. plans to unveil the completed tower in the fourth quarter of 2015 and will pursue LEED Gold or Platinum certification.

Designed by Heller Manus Architects, the 800-foot tower will feature views of San Francisco Bay and be one of only two buildings that directly connect via sky-bridge to the future public park atop the Transbay Transit Center. The 5.4-acre outdoor park will be elevated five floors above street level and is destined to become yet another cultural and recreational center for the downtown area.

The building includes 410,000 square feet of office space, boutique retail space on the fifth floor adjacent to the city park and 74 luxury condos in the top 15 floors with concierge and 37th floor fitness center and lounge.

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Developers Land $128.5M Financing For Two Florida Condo Projects

A joint venture of Property Markets Group and JDS Development has received $128.5 million in financing for two Florida condominium projects.

The transactions arranged by Mission Capital Advisors include a $106 million construction loan to complete development of Echo Aventura, a 190-unit luxury condominium high-rise at 3250 NE 188th Street in Aventura, FL; and a $22.5-million land loan at nearly 75% loan-to-cost that will allow development of Echo Brickell, a 166-unit condo tower to be constructed at 1451 Brickell Ave. on the Miami waterfront.

Managing Director Jordan Ray, Managing Director Jason Cohen and Director Ari Hirt led the Mission Capital team representing the JV partnership.

"Despite seeing resurgence in the Florida condo market, it can still be difficult for a developer to secure a land loan or a construction loan as lenders continue to tread lightly," Ray said.

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Dollywood Busting Out With $300M Expansion

Country music star Dolly Parton announced that the group that helps runs her namesake park, the Dollywood Co., plans $300 million in capital investments over the next 10 years, including new attractions, resorts and the creation of more than 2,500 jobs in Tennessee’s famed Great Smoky Mountains.

The first new attraction will be the Fire Chaser Express dual-launch roller coaster to be launched next March, followed by a 300-room DreamMore Resort set to open in time for the company’s 30th anniversary in 2015.

The resort will sit on 100 acres just minutes away from Great Smoky Mountains National Park, the most visited such park in the U.S., and feature a design reminiscent of the iconic Southern gathering spot, the front porch. Some rooms on the ground floor will even have their own private gated porches with outdoor access.

DreamMore Resort will feature a variety of accommodations, including a celebrity suite with decor inspired by Parton, a full-service restaurant fashioned after an old farmhouse, 8,000 square feet of indoor meeting space and an outdoor event area to accommodate groups as large as 500.

The new property joins Dollywood Cabins, launched in 2009, as the company’s second venture in the lodging industry. Additional unnamed resorts on park property are also in the works, as are more rides and entertainment offerings.

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PM Realty Lines Up Financing for 34-Story Multifamily Highrise

PM Realty Group said it plans to move forward on development plans for an unnamed, 288-unit, 34-story multifamily tower located at 2166 15th Street at the corner of 15th and Little Raven.

PM Realty is developing the new project with the backing of National Real Estate Advisors (NREA), the manager of the IBEW-NECA Diversified Underwritten Real Estate Fund, or INDURE Fund, a commingled, open-ended real estate investment fund that invests on behalf of pension trusts and other institutional investors, along with PM Realty and investor Ray Suppa. The development partnership will develop and own the glass apartment tower, which is expected to be the tallest structure in Denver's Riverfront Park.

The 1.2 acre site has been called one of the best infill sites in Denver. Construction is expected to begin this fall with delivery anticipated in the fall of 2015.

HFF arranged the joint venture equity for the development of the project in Denver’s Central Platte Valley.

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