Fifth Avenue Being Eyed by Amazon (Former Lord & Taylor building)
After bailing on building a campus in Long Island City, Queens last year, Amazon has been looking at other locations in New York City – including the historic building on Fifth Avenue that formerly housed Lord & Taylor’s flagship store. Amazon is in talks with WeWork to lease the entire building or just a portion, but specifics couldn’t be figured out. Other spaces that this company has looked at was the Farley Post Office, which is being converted into a transit complex with a train hall and office space. Amazon has over 5,000 employees spread out through the city, and if they lease this building, it is most likely they will be able to consolidate into this one space. Lord & Taylor agreed to sell to WeWork in 2017 for $850 million.
One Vanderbilt Breakdown
At One Vanderbilt, which is worth $3.3 billion, 59 percent of the 1.6 million SF building is spoken for. Compared to last year, the leasing has picked up momentum, which just had two tenants at the start of 2018. Some major tenants are: TD Bank, TD Securities, DZ Bank and DVB Bank, SL Green, Greenberg Traurig, Carlyle Group, McDermott Will & Emery, MFA Financial, Inc., Sentinel Capital Partners, and KPS Capital Partners. Asking rents at One Vanderbilt have ranged from $150 to north of $200 per square foot. The average asking rent in Midtown recently hit a record high of just $88.20 per square foot.
Going Green for NYC and NYS Commercial Real Estate
More than 150,000 businesses operating across a wide breadth of commercial property types in New York are going to soon be joining Saratoga Springs and Bedford in utilizing the Energize NY Open C-PACE (Commercial Property Assessed Clean Energy) Program. This follows the New York City Council’s passage of the Climate Mobilization Act. This program is looking to provide 100 percent long-term, fixed-rate financing for energy efficiency, renewable energy upgrades, and sustainability measures including green roofs to buildings. The funding for this will come from private capital providers.
In New York City, the C-PACE will lift the financial burden off almost all 50,000 plus commercial properties with greater than 25,000 SF that will face penalties as part of the Climate Mobilization Act if they cannot reduce their greenhouse gas emissions by 40 percent by 2030, and 80 percent by 2050. It is estimated that the commercial real estate market potential for energy saving retrofits is $2.2 billion over the next five years and $24 billion through 2030.
EB-5 Program Gets New Rules
U.S. immigration authorities published a new rule that will make it harder for real estate developers to fund their projects through a program known as EB-5. This program grants permanent residency to foreigners who invest in qualifying businesses. With this new rule, the minimum amount foreigners need to invest to get a green card will increase to $900k, rather than the $500k it is now. This is potential demise of the EB-5 program is the latest sign that the New York Real Estate industry is losing clout in Washington. Before this new rule, previous EB-5 laws failed because of the resistance from the real estate industry. Now, this rule will make it harder for developers to use the program funding to finance projects in more-affluent neighborhoods, as well as, states will no longer be able to draw targeted employment areas, districts with high unemployment that qualify for the minimum investment amount. According to the U.S. Citizenship and Immigration Services, this change “is meant to ensure designations are done fairly and consistently, and more closely adhere to congressional intent to direct investment to areas most in need.” The new rule doesn’t take effect until November 21, 2019.