Brookfield Property Partners is in talks to become a partner in one of the largest redevelopment projects underway in New York City.
The Toronto-based office giant is negotiating to acquire a stake in the St. John’s Terminal site, which Westbrook Partners and Atlas Capital Partners are planning to transform into a five-tower, 1.7 million-square-foot mixed-use complex, sources told The Real Deal.
The three-block-long site – which consists of north, south and center sections – would hold 1,586 rental apartments, offices, a hotel and at least 400,000 square feet of retail space adjacent to Hudson River Park’s Pier 40.
The size of Brookfield’s proposed investment was not immediately clear, though Westbrook and Atlas have been seeking a partner since last fall to bring at least $100 million in equity to the table. The developers had hired Cushman & Wakefield’s Adam Spies, then of Eastdil Secured, to the market the property for a recapitalization.
Sources said the developers are interested in bringing on a lead investment partner on the south site, where an office building or a hotel is being considered.
Westbrook bought out Eugene Grant’s majority interest in the property for $250 million in 2013, and then in 2015 bought Fortress Investment Group’s stake for $200 million. Atlas Capital Group is a minority partner.
The City Council approved the redevelopment in December, after two years of negotiations between the developers, the Hudson River Park Trust and local politicians. Thirty percent of apartments in the complex would be rent-regulated. The city allowed the developers to skip the mandatory inclusionary housing requirement as a result of its $100 million investment in Hudson River Park. That investment bought the firms 200,000 square feet of development rights.
The city prohibited the trust from transferring additional development rights to other sites in the Hudson Square neighborhood, which benefited from the approval of the newly created 10-block South Village Historic District at the time of the December vote.
In April, the developers secured a $300 million in refinancing from Morgan Stanley, replacing a loan for the same amount, records show. At the same time, they closed on the $100 million purchase of development rights from the trust.
The former freight station’s main address is 550 Washington Street, with the full property running along Washington Street between West Houston and Spring streets.
Representatives for Brookfield and Hudson River Park Trust declined to comment, and Westbrook, Atlas and Cushman could not be reached.
Brookfield is currently busy with its own megaproject, the seven-acre Manhattan West, on the Far West Side and was the seller in the year’s priciest New York City building transaction so far, with 245 Park Avenue selling to HNA Group for $2.2 billion. The firm has also been on the hunt to sell a 49 percent stake in its Lower Manhattan office-and-retail complex Brookfield Place.