The Real Deal New York

Related inks deal for new Hudson Yards lot

September 30, 2013 06:00PM
By Adam Pincus

Related CEO Jeff Blau

Related CEO Jeff Blau

The most active developer in the Hudson Yards district, the Related Companies, is in contract to buy another commercial site in the neighborhood with more than 230,000 square feet of development rights, city records show.

Related’s CEO Jeff Blau signed a contract to buy the parcel at 517 West 35th Street from a private company called HLM Realty, based in Pelham, N.Y., a memorandum of the contract dated Aug. 29 and filed last week with the City Register, reveals. (Crain’s first published a report of the contract.)

The contract price was not revealed, nor was the closing date, but it must occur by Aug. 31, 2018, the document shows. The parcel has at least 234,000 square feet of development rights, according to data from PropertyShark.

The site is adjacent to an assemblage owned by Brooklyn-based Alloy Development. There is at least one more building on the block, west of 10th Avenue between 35th and 36th streets, that city records show is owned by another owner, Dagyam 467 10th Ave. Inc., based in Great Neck, L.I.

If the purchase closes, it would be Related’s second acquisition of a competitor’s office project site since it broke ground last December on its first Hudson Yards building, the 1.7 million-square-foot South Tower at the corner of Ninth Avenue and 34th Street, which has Coach as its anchor tenant.

“We continue to be extremely bullish about the Hudson Yards district and believe we are creating significant value in the area. We have not yet formalized plans for the site,” Related told The Real Deal in a statement.

If Related can control the entire parcel, it would give them another development site on solid ground, as opposed to some of its sites above the rail yards that require a platform to complete.

A city report on Hudson Yards from 2005 said this parcel, if fully assembled, could accommodate a 1.54 million-square-foot tower. Related declined to comment on any specifics of the transaction.

It was not clear if Related made the purchase to limit competition in the neighborhood or because it was bullish on future growth, or both.

“Related is obviously committed and excited about the Hudson Yards district,” said Arthur Mirante, president of the tri-state region for commercial brokerage Avison Young, which is marketing a competing tower — 3 Hudson Boulevard — nearby, and was not involved in this transaction.

“They want to be able to accommodate tenants that happen to want to move at [any time] in the next ten years,” Mirante said.

While the contract price was not disclosed, Frank McCourt paid Sherwood Equities $167 million, or $336 per buildable foot, for a site with 494,000 square feet of development rights a few blocks south, data from Real Capital Analytics show.

In July, Related took title to a site from Extell Development at 11th Avenue and 34th Street, where Extell had planned to build a 1.7 million-square-foot tower. In exchange, Related gave a site at Eighth Avenue and 45th Street to Extell, adjacent to a parcel already owned by Extell.

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