Tishman Speyer Acquires Rights to Develop 3 MSF Tower in Hudson Yards District
- Apr 30, 2014
Tishman Speyer has become the latest developer to plan a mixed-use tower in the growing Hudson Yards district on Manhattan’s Far West Side. In separate transactions totaling $438 million, the firm has acquired adjacent parcels that could lead to construction of one of the tallest buildings in the world.
The development site consists of a full block stretching from West 34th to West 35th streets and from 10th Avenue to what will eventually be Hudson Park and Boulevard. The assemblage of the parcels, acquired from Sherwood Equities and the Rosenthal family, offers Tishman Speyer the opportunity to build a 2.85 million-square-foot tower at the site. The development firm noted in a release that the “site’s location and configuration are ideally suited to support a mix of offices and street-level retail.” No details are available yet on specific plans for the site, which is one block from the entrance to the nearly completed 7 subway line extension.
“For several decades, Tishman Speyer has been one of the world’s most active ground-up developers and investors, with projects currently being constructed or in the pipeline on four continents,” Co-CEOs Jerry Speyer and Rob Speyer said in a release. “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.”
While Tishman Speyer declined to release the amount it paid, Sherwood Equities issued a press release stating it had sold multiple parcels to the firm for $200 million. Acquired in the late 1980s for $8.1 million, Jeffrey Katz, Sherwood president, said the parcels it sold contain a four-story industrial building and two smaller-mixed used structures.
“We remain exceedingly bullish about Manhattan’s West Side, and especially the future of Hudson Yards, but large-scale office development is not part of our core business,” Katz said in his company’s release. “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.”
In September, Sherwood and an investment partner sold a vacant Hudson Yards parcel at 360 Tenth Ave. for $167.3 million. The investment group paid about $47 million for the land in 2011, Katz said. The firm is active on the West Side, where it is developing a luxury condominium and recently completed a retail gallery, both on West 21st Street in West Chelsea. It also plans to build about 250,000 square feet of luxury housing on West 36th and Tenth Avenue.
The other property Tishman Speyer acquired for its new Hudson Yards tower project was owned by the Rosenthal family and marketed by Massey Knakal. Known as the Hudson Spire development site, Tishman Speyer bought the property for $238 million in an all-cash transaction, according to a Massey Knakal release. The site at 435 Tenth Ave. runs the entire block from 501-507 West 34th St. to 510-528 West 35th St.
The Massey Knakal release notes that the site could eventually be home to the tallest building in the United States, surpassing One World Trade Center in Lower Manhattan, and the third tallest in the world.
“In the years ahead, the Hudson Yards district is sure to be the most dynamic neighborhood in the city. This is already reflected in land prices here, which have tripled within the past two and a half years,” Robert Knakal, Massey Knakal’s chairman, said in the release.
Knakal and his partner James Nelson exclusively represented the seller and was the sole broker in the transaction with Tishman Speyer.
“This was an opportunity of a lifetime to help be part of something that will transform the city’s landscape,” added Nelson.
Rezoned in 2005, the Hudson Yards district is bounded by West 42nd Street, Eighth Avenue, West 30th Street and Hudson River Park. It 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 largest development is the $15 billion Hudson Yards project being built by Related Cos. and Oxford Properties Group. Construction has begun on parts of the 28-acre mixed-use development that will eventually have more than 13 million square feet of retail, residential and office space, a hotel, a public school, parks and cultural offerings. Much of it is being built over the former Hudson rail yards, where construction started last month on a $700 million, 10-acre platform that will be the foundation for many of the buildings. The first office building, 10 Hudson Yards, the 1.7 million-square-foot south tower, will be completed by 2015. It will be the home of Coach Inc., L’Oreal USA and SAP, a software corporation, and Fairway Market. In January, Time Warner Inc., agreed to relocate its corporate headquarters to 30 Hudson Yards, a 2.6 million-square-foot, 80-story skyscraper that will be finished in early 2019.
Another mega project is also being built in the Hudson Yards district, where Brookfield Office Properties is developing Manhattan West, a $4.5 billion, 7 million-square-foot mixed-use project over the West Side rail yard along Ninth Avenue and 33rd Street.