The Real Deal New York

Durst Fetner changes course at Herald Square tower

Hotel concept scrapped at 855 Sixth Avenue, filings show

April 09, 2013 02:00PM
By Adam Pincus

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From left: Durst Fetner CEO Harold Fetner, Ian Schrager and 855 Sixth Avenue

Developer Durst Fetner Residential is abandoning hotel plans as well as cutting the height of its planned high rise at 855 Sixth Avenue three blocks south of Herald Square.

The developer filed plans last week for a 43-story, 465,420-square-foot office, retail and rental tower to be built on a vacant parcel spanning the entire eastern end of the block from West 30th to West 31st streets, records from the city’s Department of Buildings show.

The new plans represent a change from the proposed 56-story hotel and residential building first reported in November 2011.

Durst Fetner, led by CEO Harold Fetner, declined to comment specifically on why the firm scrapped the hotel concept, but said the strong office and rental market in the area near a major transportation hub would keep demand high.

“The Midtown South office market is red hot,” a spokesperson for the firm said. “In addition, we have maxed out the residential portion of the building to take advantage of the area’s surging rental market.”

The tower designed by CookFox Architects is set to rise in a neighborhood without a clear personality that is located between the active retail center of Herald Square to the north and the trendy NoMad district just to the south, which is home to hotels such as the Ace Hotel and the NoMad Hotel.

Peter Hennessy, president of the tri-state region for commercial firm Cassidy Turley, who is not involved in this project, said Durst Fetner had a relatively low-cost basis for the land, which was purchased out of foreclosure.

As a result, “they will be able to be very aggressive in terms of their rents and so get great returns,” Hennessy said.

The development will have 382 residential units on floors eight through 40, and just over 30,000 square feet of retail space on the ground floor, lower level and second floor, the new filings show. In addition, it will have more than 119,000 square feet of office space on the second through sixth floors, the DOB filing says.

Fetner acquired most of the development site in 2010 for $104 million, a steep discount from current pricing after lender iStar Financial launched foreclosure proceedings against the former owners Tessler Developments and the Chetrit Group. In 2011, reports said Fetner was negotiating with Ian Schrager to open a Public Hotel covering 16 floors in the tower.

Then last June, news reports said Fetner and Schrager had abandoned the plans, but that Fetner was still looking for a hotel partner.

The new plans harken back to the original project envisioned by Yitzchak Tessler and the Chetrit Group, which called for office, retail and residential as well.

  • Richard Libbey

    Keith, what happened?

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