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Tishman Speyer to Develop Massive Hudson Yards Tower

Assemblage Sells for Total of $438M As Land Rush By Developers to Former Industrial Site Continues
April 30, 2014
Tishman Speyer today announced it has purchased a full block of undeveloped parcels in Hudson Yards from West 34th to West 35th streets and from 10th Avenue to the furturwe Hudson Park and Boulevard development.

The assemblage, along with the ability to purchase additional development rights, allows Tishman Speyer the right to build a 2.85 million-square-foot tower in Midtown Manhattan’s fast-expanding west side neighborhood and business district, the company said in a release. The so-called "Hudson Spire" could rank as one of the world's tallest buildings, rivaling towers in Dubai and Saudi Arabia.

The location and configuration are ideally suited to a mix of offices and street-level retail, though the site is suited for a number of different uses, Tishman said.

"We are very bullish on New York City and Hudson Yards, and found this to be the perfect time, development site and opportunity to participate in establishing Hudson Yards as the world’s next great commercial district and neighborhood," said Tishman Speyer Co-Chief Executives Jerry Speyer and Rob Speyer.

Tishman didn’t disclose financial terms of the deal, but Manhattan-based seller Sherwood Equities announced separately that it has sold "multiple Hudson Yards parcels" constituting a portion of the site to Tishman-Speyer for $200 million, according to Sherwood President Jeffrey Katz.

The sites sold by Sherwood are at the southeast corner of West 34th Street and Hudson Yards Boulevard, and at West 35th Street and Tenth Avenue. Sherwood acquired the property in the late 1980s for $8.1 million.

Tishman Speyer's assemblage also included a neighboring property owned by the Rosenthal family, Sherwood said.

In a third release, Massey Knakal announced that it sold the Hudson Spire development site in an all-cash transaction valued at $238 million. The Hudson Boulevard facing site at 435 Tenth Avenue runs block-through from
501-507 West 34th Street to 510-528 West 35th Street.

The Hudson Spire site could one day be the tallest building in the U.S., surpassing One World Trade Center, making it the world’s third-tallest building after the Burj Khalifa in Dubai and the Makkah Royal Clock Tower in Mecca, Saudi Arabia, the company said.

“The Hudson Yards District is sure to be the most dynamic neighborhood in the city," said Chairman Robert Knakal, who exclusively represented the seller and was the sole broker in this transaction with partner James P. Nelson. "This is already reflected in land prices here which have tripled within the past two and a half years.”

Rezoned in 2005, the Hudson Yards district, bounded by West 42nd Street, Eighth Avenue, West 30th Street and Hudson River Park, allows for 26 million square feet of office space, 20,000 units of new housing, 2 million square feet of retail space and 3 million square feet of hotels. The neighborhood will also be bolstered by the soon-to-be-completed extension of the Number 7 subway line, a new Hudson Park and Boulevard and completion of the final phase of the High Line elevated park.

Privately held Sherwood and an investment partner sold a vacant Hudson Yards parcel at 360 Tenth Avenue to a group headed by former Los Angeles Dodgers owner Frank McCourt for $167.3 million. The Sherwood team turned a sweet profit on that deal as well, selling for about $120 million more than it paid for the land in 2011.

Sherwood is currently developing a high-end condominium project on a full block known as 500 West 21st Street next to the High Line in West Chelsea, on land it acquired in 2010. Sherwood also owns a Hudson Yards property at West 36th Street and Tenth Avenue purchased in 1991 for about $800,000, where it intends to develop a high-end residential tower.

Katz said that while Sherwood remains "exceedingly bullish" about Manhattan's West Side and Hudson Yards, large-scale office development is not part of its core business.
"Today's sale, along with last summer's at 360 Tenth, were intended to harvest investments we made under favorable market conditions. In fact, we have realized more than $300 million in profits from property sales over the past seven months," Katz said.

Katz says his firm is currently in negotiation to acquire additional property on the West Side.
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