print header

# 1 Commercial Real Estate Information Company

  • Find Properties 
  • Market Properties 
  • Analyze Properties 
Products
Commercial Real Estate News

Normandy Real Estate Partners Moves Forward on $300M Project at 799 Broadway

Cushman & Wakefield Has Been Tapped to Market Ownership Interest in Development
February 27, 2018
Normandy Real Estate Partners is shopping a stake in its development of a brand new mixed-use building at 797-799 Broadway in New York City, CoStar News can confirm.

The privately-held real estate owner invested together with Ares Management and NTT Urban Development Corporation, a subsidiary of the Japan-based telecom company, to buy the six-story, 105,000-square-foot asset for about $101 million in 2016, according to CoStar data.
See CoStar COMPS #3648094.

Normandy Real Estate Partners tells CoStar News that it is planning to build a new 183,000-square-foot, 12-story office asset with a $300 million total projected development cost. The new building will include ground-floor and lower-level retail space.

With the project expected to deliver in summer 2020, construction and architectural plans are already in hand. A contractor should be selected by June 30, according to Gavin Evans, partner at Normandy.

Recapitalizing when ready to go vertical was always the business plan with this asset, adds Evans. As the consortium navigated its pre-development period, it watched the Manhattan commercial market.

The team feels the market has moved in favor of demolishing the building, rather than improving upon the existing asset. The team chose not to pursue additional air and development rights for the project, as doing so would have diminished its certainty of execution.

Normandy says it is looking for 50% leverage, or about a $150 million construction loan. With $50 million in equity already in its coffers for the project, the team would be looking for a new investor to come in at around $100 million.

But as the team brings the stake to market through Cushman & Wakefield, many scenarios could happen, he adds.

"Each member could sell some stake (partial sale), for instance, or an investor could come in for money and Ares could exit. It is more than likely that Normandy’s fund will maintain the investment," Evans explains. "We are seeking a partner of anywhere between 50-80% of the total project equity."

There are very limited options right now for smaller and medium-sized tenants, those sized within the 10,000-50,000-square-foot range, according to Evans.

"We have the unique opportunity to check all the boxes" of what the new generation of office occupiers wants, he concludes.



Diana Bell, New York City Market Reporter  CoStar Group   
GET IN TOUCH        Contact CoStar News Team:   News@CoStar.com

 Find us on 

Welcome To CoStar's
Industry-Focused,
Award-Winning News

Winner of three Journalism Awards from the National Association of Real Estate Editors (NAREE)

Award-Winning News