The Daily Dirt: Amazon’s latest NYC hunt

TRD New York /
Jul.July 26, 2019 11:30 AM

From left: WeWork CEO Adam Neumann, 424 Fifth Avenue, and Amazon CEO Jeff Bezos (Credit: Getty Images)

Amazon “abandoned” NYC. Now it’s scouting multiple spots in the city…  

Despite ditching plans to open a new “headquarters” in Queens, Amazon is now reportedly touring the city in search of a new office and shipping facility. Go figure. 

The company is looking at Lord & Taylor’s former flagship store on Fifth Avenue, which is owned by the We Company, the Wall Street Journal reports. That could mean the We Company isn’t leasing the building’s 12 floors, as previously thought — though it’s unclear whether the co-working giant will try to find other tenants if this deal doesn’t work out. (The We Company did pay $850 million for the roughly 600,000-square-foot property, after all.) It’s also unknown if Amazon would bring additional employees to the Fifth Avenue location or simply relocate them from their other offices in the city.  

Amazon’s also eyeing the Farley Post Office, which is being transformed into a transit hub that’s within walking distance of Hudson Yards and a still-ugly and overcrowded Penn Station. 

For its shipping facility, the company is considering Industry City in Sunset Park, where it could rent up to 1 million square feet when its lease expires next door at Liberty View Industrial Plaza. Crain’s reports that the company is also considering a series of warehouses and a development site at the Brooklyn Army Terminal. So to recap: Amazon is looking in Midtown and Brooklyn but not Queens (as far as we know).   

After Amazon backed out of the $3 billion deal to bring 25,000 jobs to Long Island City, the company indicated that it would continue to expand its existing New York operations. Critics of the Amazon campus balked at the tax incentives offered to the company, arguing that companies didn’t need such inducements to plant their flag in one of the world’s premier cities. (It’s NYC, baby!) But given the heightened demand and limited supply of last-mile warehouses in New York, it’s probably not surprising that Amazon is still actively going after such space — with or without hefty tax breaks. 

Brokers are worried that new rules about security deposits will hurt certain renters.

The state’s new rent law, among other things, limits security deposits to one-month’s rent. The problem? Brokers say this will adversely impact international students and those with lackluster credit histories because landlords might not want to take the risk, Georgia Kromrei reports.

“We’re going to have a crisis with international students. Nobody will rent to them. They don’t have social security numbers,” said Adam Frisch, managing principal at residential brokerage Lee & Associates Residential NYC.

But, as with most of the changes to the state’s rent stabilization law, this consequence has yet to come to fruition. Landlords have predicted that the reforms will lead to a drop in NYC investment and overall decline in the quality of the city’s housing stock. While there’s been some news of individual owners deciding to sell or attempting to back out of deals in light of the new law, it’s still too early to tell.    

What we’re thinking about next: What will be the impact of the changes to EB-5? Send a note to [email protected]

CLOSING TIME 

Residential: The priciest residential closing recorded on Thursday was for a condo unit at 16 West 40th Street in Midtown, at $5.5 million.
Commercial: The most expensive commercial closing of the day was for an industrial building at 58-95 Maurice Avenue in Maspeth, at $39.5 million. Turnbridge Equities was the buyer, and CMJ Realty is the seller. 

BREAKING GROUND

The largest new building filing of the day was for a 28,260-square-foot community facility at 9201 Fifth Avenue in Fort Hamilton. APR Group filed the permit application. 

NEW TO THE MARKET

The priciest residential listing to hit the market was for a condo unit at 432 Park Avenue in Midtown, at $8.8 million. Engel and Volkers’ Noel Berk has the listing. — Research by Mary Diduch

A thing we’ve learned…

In case you needed more proof that Gary Barnett got a good deal: Lightstone paid roughly $330 per square foot ($6.75 million for 20,500 square feet) for the air rights to build the Moxy Chelsea Hotel. A year later, residents of a Chelsea building paid Barnett $11 million ($560 psf) for air rights to ensure the developer wouldn’t build a large condo tower next door. Thank you to Kevin Sun for making this connection, and for generally learning a lot of things.

Top stories from our other markets:

NATIONAL

Nine months after returning as CEO of Colony Capital, founder Thomas Barrack has given himself a term limit: 2021. Barrack will step down as the investment firm’s chief executive, returning to his post as executive chairman. The move was announced Thursday, as part of a $325 million deal to acquire digital infrastructure investment firm Digital Bridge Holdings. Digital Bridge Chairman Marc Ganzi will succeed Barrack. The transition will be made over the next 18 to 24 months, according to a statement detailing the deal.

CHICAGO

A group of Chicago aldermen are pushing a plan to strengthen the city’s Affordable Requirements Ordinance, in some cases making developers charge below-market rents on nearly a third of units in any new residential development that needs zoning approval. The proposal, sponsored by Alderman Chris Taliaferro (29th) and several freshman Democratic Socialist aldermen, would triple the required amount of affordable units from 10 to 30 percent in “high-rent zones” and raise it to 20 percent elsewhere, according to Crain’s. It would also eliminate the option for developers to opt out the mandate by paying fees into the city’s Affordable Housing Trust Fund.

LOS ANGELES

A judge has denied bankruptcy protection for the owner of the 157-acre development site known as The Mountain of Beverly Hills. That decision sets the stage for the property’s foreclosure, one year after it hit the market with the attention and publicity rivaling a Hollywood blockbuster. Instead, it’s a flop. The judge’s order was filed on Thursday, marking a major step in the decades-long dispute over the enormous plot of land, which listed in July 2018 for an astonishing $1 billion.

MIAMI

Terranova Corp. is planning to build a mixed-use hotel on the newly revamped Miracle Mile in Coral Gables. Gables Miracle Mile LLC, an affiliate of Stephen Bittel’s Miami Beach firm, submitted a proposal for the Mile Hotel and Shops, a 120-key hotel at 220 Miracle Mile. The Arquitectonica-designed property would be seven stories and 70 feet, with more than 28,000 square feet of retail and food and beverage space. Nearly 15,000 square feet of that retail space would be set aside for the ground floor, according to the plans.


Related Articles

arrow_forward_ios
Nooklyn CEO Harley Courts (Credit: iStock)

The Daily Dirt: Changes to rent law raise concerns at Nooklyn

Morningside Heights (Credit: Wikipedia)

The Daily Dirt: Who needs City Hall?

Across the country, tenant campaigns promoting rent caps just cause eviction legislation are gaining momentum. Presidential candidate Bernie Sanders has unveiled his own proposal for nationwide rent control. Illustration by Paul Dilakian

How the rent control debate is heating up

Pam Liebman (Illustration by Chari Tsevis)

The Daily Dirt: Inside the Corcoran “hack”

Amazon CEO Jeff Bezos (Credit: Getty Images, iStock)

The Daily Dirt: Amazon pushes further into brick-and-mortar space

WeWork co-CEO Artie Minson (Credit: Getty Images)

The Daily Dirt: WeWork isn’t going public (for now)

Facebook CEO Mark Zuckerberg and a rendering of the Farley Post Office building redevelopment (Credit: Getty Images, SOM)

The Daily Dirt: Big tech’s west side lovefest

Extell Development chairman Gary Barnett and One Manhattan Square (Credit: Anuja Shakya, StreetEasy)

The Daily Dirt: Extell offers rent-to-buy program. Yep, you read that right.

arrow_forward_ios