Places, Everyone! The New Development Boom Is About to Start

Mr. Heller, who arranged the deal, declined to comment on the specifics, but he said it was the most complex deal he has ever worked on. “They will be fabulously successful together.”

CIM, meanwhile, has emerged seemingly from nowhere to become one of the most prolific buyers of troubled luxury property in the city, including William Beaver House, 11 Madison Avenue and the Trump Soho. Still, the West Coast newcomers have said almost nothing about the Drake site.

“It is inarguably the best development site in North America,” said Eric Anton, a top broker at Eastern Consolidated who has not been involved in the site. “But they need to get going. Time kills all deals.”


AN HOUR AFTER dawn on Monday morning, the 56th Street gate to the Drake site was wide open, and the rubble-strewn lot was eerily abandoned. The Observer strolled past the “Hard Hats Only” sign and felt the crunch of crushed red bricks and discarded soda bottles beneath our feet.

The only sound came from bricks raining down over the northwest corner, falling at the rate of one every 10 seconds from a townhouse being dismantled at 40 East 57th Street. Around the corner, on East 57th Street, workers were rolling out the guts of several townhouses in large gray garbage bins. Only 42 East 57th, a townhouse belonging to the family of Harrods owner Mohammed al-Fayed, which has thus far refused to sell, is still fully intact as is the townhouse at 48 East 57th (the developers can move ahead with the tower regardless of townhouse holdouts, a source said).

While the final stages of destruction are noisily under way, plans have been quietly drawn up to build a condo tower with three floors targeted at luxury retailers and perhaps a hotel in between-strikingly similar to what Mr. Macklowe wanted all along. The building could reach as high as 70 stories, and “it will have extraordinary views,” one person said.

That’s all anyone knows or will reveal. CIM flatly declined interview requests-as it has with all local media suitors (it has also, we should note, publicly downplayed Mr. Macklowe’s role). Mr. Macklowe’s assistant also greeted us icily. “Oh,” she said, “he is not commenting on that.”

With most of the details a secret, faith in the project rests squarely with Macklowe. “When I take Harry Macklowe on a property tour,” Mr. Heller said, “I can’t keep track of the number of concepts that pass through his mind. I can barely keep up with his eye movement.”

Stirrings at the Drake site mark one of the earliest signs of a new development boom in Manhattan as a whole. Construction has started on Extell’s 70-story hotel/condo development on 57th Street. Boston Properties is on the cusp of signing the major office lease it needs to move forward with a $1 billion office tower at Eighth Avenue and 55th Street. Durst is expected to break ground by the end of the year on a $350 million apartment tower just south of Herald Square. Most recently, Texas-based Hines Interests is rumored to be moving forward with construction of a glass needle for the MoMA at 53 West 53rd Street.

This is more than enough to rally an industry of optimists. “We’ve done more development sites in the last 10 or 12 months than we ever would have thought,” said Eastern Consolidated CEO Peter Hauspurg, who said he’s worked on brokering trades of hotel development sites especially. “It is remarkable in Manhattan. We’re marketing a site on Bryant Park to build a 225,000-square-foot hotel and getting interest that is reminiscent of 2007.”

“We are witnessing a renewed vigor for solid, well-located development sites from developers and investors alike,” said Eastdil Secured’s Douglas Harmon.

Nonetheless, an ultra-luxurious condo tower wedged amid glaring black office towers, with a huge retail space once intended for a highbrow British department store, seems like it belongs not in these chastened post-recession days but in ones 36 or so months back. The residential real estate market is recovering fitfully, and job growth remains sluggish amid the usual litany of industry concerns: interest rates, financing, the Obama administration.

Still, the curtain is up with Mr. Macklowe’s moves at the Drake. And we’ve seen this play before.

“Distressed,” Mr. Heller said, “is a word we’re going to retire from the current lexicon in short order.”

Places, Everyone! The New Development Boom Is About to Start