Millennials will be parents living in suburbs by time Midtown East is ready for redevelopment

If Council approves proposal, only 3 sites suitable to develop in near future: Cushman

New York /
Jul.July 20, 2017 01:15 PM

The City Council’s Committee on Land Use is set to vote next week on the proposal to rezone 78 blocks in Midtown East, which is projected to create 6.5 million square feet of new office space over the next two decades.

Should the committee approve the plan and the full Council give the final thumbs up in August, however, only a small handful of the 16 sites the city’s identified for redevelopment could get started in the near term.

“Of those 16, many of them have multiple ownership, the single ownership properties have 20, 30 [or] 40 tenants in the building with various lease expirations so they’re not being vacated anytime soon,” Bob Knakal, chair of New York investment sales at Cushman & Wakefield, said at the brokerage’s midyear media breakfast Thursday.

Knakal said there are only three sites that are suitable for redevelopment in the next three to five years: the W hotel at 541 Lexington Avenue, Pfizer’s two properties at 218 and 235 East 42nd Street and the InterContinental Barclay Hotel at 11 East 48th Street, which just underwent a $180 million renovation.

“The fact is, if the Midtown rezoning passes next week, it will tangibly impact the market in 2027 to 2037,” he said.

But that might just be the right timing for a resurgence around Grand Central Terminal.

Cushman executive vice chair Dale Schlather said that 10 to 20 years is when millennials will be moving out of the city into the suburbs, which will once again drive demand for office space back into the Plaza District.


Related Articles

arrow_forward_ios
Scott McIntyre, chief executive officer, Guidehouse (Guidehouse, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
New York rent relief contractor boasted about profits as program struggled
New York rent relief contractor boasted about profits as program struggled
Lever House set for $100M redevelopment, restoration
Lever House set for $100M redevelopment, restoration
Lever House set for $100M redevelopment, restoration
BFC Partners managing principal Donald Capoccia and renderings of 1607 Surf Avenue on Coney Island (BFCNYC)
BFC breaks ground on next phase of Coney Island affordable project
BFC breaks ground on next phase of Coney Island affordable project
John Arrillaga (Raymond Purpur of the Stanford Athletic Department)
John Arrillaga, pioneering Silicon Valley developer, dead at 84
John Arrillaga, pioneering Silicon Valley developer, dead at 84
Southampton Town supervisor Jay Schneiderman (jayschneiderman.com, Google Maps)
Southampton Town considers buying 40 acres
Southampton Town considers buying 40 acres
From left: Don Mullen, chief executive officer, Pretium Partners; Kelli Lawrence, chief executive officer, Onyx+East (Pretium Partners, Onyx+East, iStock)
Pretium to launch $600M JV for build-to-rent development
Pretium to launch $600M JV for build-to-rent development
Sergey Ryback, founder, principal, Ryback Development (Google Maps, Ryback Development)
Bad vibes threaten Rybak’s Upper East Side project
Bad vibes threaten Rybak’s Upper East Side project
Keith Powers, Democratic District 4 representative on the New York City Council, in front of 45 East 45th Street (Getty Images, The Roosevelt Hotel, iStock/Illustration by Steven Dilakian for The Real Deal)
Local lawmakers aim to landmark shuttered Roosevelt Hotel
Local lawmakers aim to landmark shuttered Roosevelt Hotel
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...