The Real Deal New York

Rockrose acquires Hudson Yards development site

Developer weighs plans for Far West Side block

August 15, 2012 04:00PM
By Katherine Clarke

From left: Justin and Henry Elghanayan and the site on 39th Street

Rockrose Development has purchased a 19,475-square-foot commercial development site near Hudson Yards, bringing to completion a decade-long plan to acquire an entire block on the Far West Side.

The acquisition of the site, at 528-534 West 39th Street, paves the way for a residential development totaling 528 units as well as an additional 1 million square feet of commercial development, Rockrose President Justin Elghanayan told The Real Deal following the closing today.

The lot, formerly owned by Mercedes Benz and close to the Jacob K. Javits Convention Center, is located between West 38th and West 39th streets and between 10th and 11th avenues. The combined land area Rockrose has accumulated at the site totals 73,793 square feet, with total available development rights of 1.4 million square feet. Rockrose has been piecing together the site since 2001.

Elghanayan declined to provide the selling price. Rockrose was represented by Howard Greenberg and Anne DeMarzo of Ace Capital in the deal, while Mercedes was represented by Michael Laginestra and Michael Geoghegan of CBRE.

Laginestra declined to comment on the selling price but said that he was especially proud of the deal, given the visibility of the site.

“[The deal] allows for the creation of a building that will frame the entrance to the Lincoln Tunnel in classic New York skyscraper fashion,” he said.

Elghanayan said the firm is currently evaluating its options for the site, which will likely include both a residential and a commercial component. The commercial component could be a convention center hotel. Such hotels typically include a large meeting space or ballroom, which would be easily facilitated in this instance by the site’s 74,000-square-foot floor plate. However, it’s likely that the residential component of the site would come first, Elghanayan said.

Asked if the firm would lean towards condominiums or rentals, Elghanayan said Rockrose was undecided. Many other developers are hedging their bets on the Far West Side. Larry Silverstein’s Silverstein Properties is reportedly trying out designs for a 60-story residential tower at 514 11th Avenue, and Extell Development is expanding a residential tower project at 502 West 41st Street. Neither project has yet declared whether it will be a condominium or a rental.

Even if all these upcoming projects go rental, Elghanayan said Rockrose would be undeterred from doing the same. “When it comes to rental product, the more the merrier,” he said. “You are in a partnership with your fellow developers because you’re bringing critical mass to the area, which is really making a neighborhood.”

As well as the 7 Subway line, the project may also benefit from its proximity to Hudson Yards Boulevard Park, the first phase of which is already under construction between 33rd and 36th streets, Elghanayan noted.

Rockrose has deep roots in the Hudson Yards area. The firm developed a 394-unit property at 455 West 37th Street and an 835-unit property at 505 West 37th Street before splitting into two separate companies in 2009 when Elghanayan’s uncles K. Thomas and Frederick founded TF Cornerstone.

“Rockrose was one of the earliest development pioneers in the Hudson Yards area,” H. Henry Elghanayan, Rockrose founder and CEO, said in a statement to The Real Deal. “Our firm purchased several development properties in the area in 2001, four years before the district was rezoned by the City to encourage commercial development.”

As The Real Deal previously reported, Justin Elghanayan was named president of Rockrose earlier this year. In addition to this project, he is also tasked with spearheading work on the company’s $750 million worth of development slated for the Court Square neighborhood in Long Island City.

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