Back in February the ground on this island was frozen solid, and not only because we were experiencing a winter worthy of a 19th-century Russian novel. Not counting the World Trade Center site, there was nary a shovel in sight as financing remained sluggish and office leasing was just beginning to pick up.
At that time we wrote: “While the sight of New York City’s 600 stalled construction projects is difficult to ignore, those deep inside the industry say signs of a new boom are beginning to appear.”
That turned out to be true.
Since then, CIM and Harry Macklowe have begun moving forward on plans for the ultravaluable Drake Hotel site; Gary Barnett’s International Gem Tower is rising fast; Boston Properties’ West 55th Street development has signed its first major leases; and, finally, Hudson Yards is on the cusp of doing the same. All of which is to say, get your hammers ready, the new development boom has begun.
But that leaves nagging concerns. Signs of a dreaded economic double-dip are everywhere—including a stubbornly high employment rate, uneven economic indicators and the almost weekly stock market freak-out. Many of these projects are being financed by mysterious out-of-state or foreign investors, meaning that even if New York City is ahead of the recovery, local development is more vulnerable than ever to the wild fluctuations of economies in Europe and the Middle East.
Meanwhile, there’s a clear race to sign anchor tenants for these new projects, often at bargain rents that aren’t sustainable long-term. Consider, for example, Condé Nast’s deal with the Port Authority, which will need to be counterbalanced by high rents in the top of 1 World Trade Center—and technically leaves the Port on the hook for the remainder of the tenant’s huge lease at 4 Times Square.
That aside, for now we look out on the horizon and behold more scaffolding than even we anticipated. The following is a list of the most valuable development sites compiled using data from Cassidy Turley, CoStar and The Commercial Observer’s own reporting this year.