The massive Times Square hotel-and-retail redevelopment known as TSX Broadway is expected to be worth nearly $4.2 billion by 2023, according to a prospectus shared with Chinese investors in the project that was reviewed by The Real Deal.
Maefield Development, Fortress Investment Group and L&L Holding Company plan to close the Palace Theatre and the DoubleTree hotel at the site on Sept. 15 to begin demolition and construction. The existing retail portion of the property will close two months earlier, on July 20.
The developers are raising a $300 million fund for construction through the EB-5 visa program, but have not yet hit that target number, a source familiar with the fundraising operation in China said.
In the plans sent to investors, the project’s current appraisal is pegged at $3 billion. The developers expect that to jump to $3.9 billion once construction wraps in 2021 and then to $4.2 billion in 2023, if the project is stabilized. Real estate appraisers Phillip Ginsberg and Jon DiPietra signed off on the numbers.
Reached by phone, Ginsberg said the $3 billion is the current development site value, including the building approvals the developers have won for it. Further describing the meaning of the “as is” appraisal figure, Ginsberg said, “In theory, the way it stands now with all the plans in place, if these guys wanted to to sell it to someone else, they could say, ‘Here’s what it’s worth to us right now.'” The site is one of the four most valuable around Times Square, he said.
Construction plans for TSX Broadway call for elevating the theater and redeveloping the existing structures into a 47-story, 550,000-square-foot building with 663 hotel rooms, 110,000 square feet of retail and a 17,000-square-foot LED sign on the lower front of the tower. It also includes plans for a pop-out outdoor performance stage space. The project, which has a second address of 702 Seventh Avenue, is called “702 TSX” in investor documents.
A spokesperson for Maefield did not immediately respond to a request seeking comment.
In January, TRD reported that the developers were still searching for an additional $1 billion in debt and equity to complete the new hotel. Maefield acquired the leasehold interest in the site for $540 million in 2015 and then in 2017, with partners L&L and Fortress, acquired an additional $200 million interest.