Tishman Speyer Moves Forward with Massive Queens Project
- Jul 13, 2016
New York—Tishman Speyer has brought in a partner on its 1.1 million-square-foot office and retail project in Long Island City, and the new investor is none too shabby. The real estate developer recently teamed up with Qatari Diar, the sovereign wealth fund of the State of Qatar, to usher the $707 million development toward realization.
Qatari Diar is just one of a throng of cross-border investors increasingly eager to get a piece of the U.S. commercial real estate market. “Interest in the U.S. market by our foreign investor clients has been developing momentum over the past three years,” Mike McMenomy, global head of investor services with CBRE Global Investors, told Commercial Property Executive. “The opportunity to diversify portfolios and seek a current return within a market delivering well-balanced fundamentals continues to be a compelling scenario.”
Tishman Speyer and Qatari Diar just completed the acquisition of 1.8 million square feet worth of development rights from the city of New York, thereby paving the way for construction of the mixed-use project. When all is said and done, the site will yield two 27-story office towers connected by a four-story, retail-laden podium. If early commitments are any indication, the MdeAS Architects-designed development will be quite a success. Approximately 800,000 square feet of the office accommodations have been pre-leased, with WeWork, a leading shared office space provider, having staked a claim to 250,000 square feet of the space. It appears Qatari Diar chose well, eschewing—this time around—foreign investors’ common practice of focusing strictly on the country’s top-tier cities.
Qatari Diar is no stranger to the U.S. real estate market. The company made its debut here in 2011 with the contribution of $700 million for the development of Washington, D.C.’s mixed-use CityCenterDC, an approximately $1 billion endeavor spearheaded by real estate company Hines. The partners have built office, retail and residential offerings at the 10-acre destination, and last month, they commenced construction of the 360-key Conrad Washington, D.C., luxury hotel, the seventh building that Hines and Qatari Diar have created at CityCenterDC.
Tishman Speyer and Qatari Diar plan to kick-off construction of the L.I.C. project in 2017, and complete the work in 2019.
As for foreign investment in the U.S., it’s only going to increase, and investors from the Middle East will play a notable role in the activity. “Middle Eastern capital flows into the U.S. continue to be strong, growing and diversifying in nature. As the big sovereigns continue to seek safe havens and long-term stable growth potential, the flow of capital from the Middle East will become even stronger and we would expect a greater amount of this capital to look beyond the gateway markets to achieve their objectives,” Spencer Levy, head of research for the Americas with CBRE, wrote in a recent report.