With all of New York City’s megadevelopments — from the Hudson Yards site to the World Trade Center complex — it’s easy to forget that there are also giant real estate projects being built elsewhere in the country.
The Real Deal attempted to remedy that this month by taking stock of the most significant projects across the U.S. since the credit crunch ended the mid-2000s real estate boom. Using data from the commercial brokerage Marcus & Millichap and research firm CoStar Group, we ranked the biggest projects under construction or completed between 2008 and now.
Some of those projects are indeed located in the Big Apple, where the economic recovery was faster than it was elsewhere in the country. But South Florida and Las Vegas — which are of course both popular among tourists and as second-home destinations — have also seen a number of major projects.
The buildings on the top 20 list — which were ranked by developable square feet — include hotels, condos, resorts, casinos, office towers, apartment complexes, and megamalls. They range in size from the 1.9 million-square-foot Phoenix West II Hotel in Alabama to the 7.4 million-square-foot Palazzo Resort Hotel Casino in Nevada. The New York projects that made the cut were three World Trade Center site buildings, the Bank of America tower at 1 Bryant Park and Goldman Sachs’ headquarters. (Only single buildings were included, not multibuilding projects like Hudson Yards.)
Below is a look at the biggest new-construction projects of the past five years.
World Trade Center Towers
Location: New York, N.Y.
Size: 8.7 million square feet (total)
The 16-acre World Trade Center site in Lower Manhattan is one of the most significant projects in the country — and the most well-known. The three towers underway at the site — Towers 1, 3, and 4 — each made the top 20 list and were tallied together by TRD. They’ve been in various stages of planning and construction since at least 2006, five years after terrorists crashed two planes into the original World Trade Center towers and destroyed them.
The 1,776-foot, 3 million-square-foot One World Trade Center, which is 104 floors, is the tallest tower in North America. After topping out earlier this year, it is expected to open by spring 2014. The tower cost co-developers the Durst Organization and the Port Authority of New York & New Jersey between $3.8 and $3.9 billion to build. And as virtually everyone in the New York real estate industry knows, it will be anchored by publishing giant Condé Nast, which signed a more than 1 million-square-foot lease in 2010. (The building’s 120-foot concrete base, added for security reasons, is off-limits to commercial tenants.)
Construction of 3 World Trade Center started in 2012, and is expected to be completed in 2015, after delays over financing and securing tenants halted work. The Silverstein Properties–developed tower is expected to be 1,170 feet high and include 2.86 million square feet of office space. Financing for the tower has purportedly hit $2.8 billion. (Silverstein and the Port Authority have, however, been quoted placing costs more in the $1.3 to $1.5 billion range.)
Meanwhile, construction on the 978-foot, 2.84 million-square-foot 4 World Trade Center started in 2008 and is scheduled to be completed this fall. Silverstein has spent $1.67 billion in state bond money and insurance on the tower, which will be anchored by the Port Authority’s roughly 600,000-square-foot headquarters.
The Palazzo Resort Hotel Casino
Location: Las Vegas, Nev.
Size: 7.4 million square feet
When it officially opened in January 2008, this 7.4 million-square-foot, $1.8 billion casino-resort complex displaced the Pentagon in Washington, D.C., as the largest building in the U.S. It’s also about 700,000 square feet larger than the world’s next biggest casino-resort, the Marina Bay Sands in Singapore, which was built by the same developer, Las Vegas Sands Corp.
And when the Palazzo first opened, billionaire Sheldon Adelson, the CEO of Las Vegas Sands, had no qualms about the investment he made.
“We will cannibalize” the resort’s competitors, Adelson told USA Today. “We’re going to take customers from other hotels.”
With 3,068 hotel suites, a 105,000-square-foot casino and a 450,000-square-foot shopping center, the project is connected to the famed Venetian, which Las Vegas Sands also built.
In May, the megamall company General Growth Properties announced that it sold a 49 percent stake in the so-called Grand Canal Shoppes at the Palazzo and Venetian for $410 million to TIAA-CREF. It also noted that the combined retail at the Grand Canal Shoppes is 99 percent leased up and generates more than $1,000 a square foot in sales. One source said rents there likely vary widely and that smaller retailers probably pay between $150 and $225 per square, including taxes and other expenses.
The mall is anchored by an 85,000-square-foot Barneys New York and includes a Lamborghini dealership. It also includes restaurants from celebrity chefs like Mario Batali, Wolfgang Puck and Emeril Lagasse as well as the world’s largest Canyon Ranch Spa Club. Suites at the Palazzo start at $149 and go up to more than $800.
Westin Resort at Tarpon Point Marina
Location: Cape Coral, Fla.
Size: 4.2 million square feet
Developer Bob Hensley spent between $150 and $160 million to create more than eight acres of marinas, pools, restaurants and spas as well as a pair of condo buildings and a condo-hotel with fully furnished rooms.
The waterfront complex opened in 2009 as the Resort at Marina Village. But Hensley’s now-defunct Florida firm, Grosse Point Development, lost control of the resort due to financial troubles shortly after it opened, when a European lender called in loans that the firm couldn’t repay. Starwood Hotels & Resorts Worldwide took control of the 531,000-square-foot hotel-condo, reopening it as the Westin Resort at Tarpon Point Marina in 2012. Other elements of the resort, including the condos, are either owned by individual homeowners or controlled by other investors. Westin declined to reveal the terms of its takeover. The average daily rate for the 260-plus hotel rooms is $139 a night, according to CoStar (though rates can run to more than $700 a night). Condos, even waterfront ones, have sold in the low six figures. Many were snapped up by snowbirds from the Northeast and Midwest.
“Second-home sales are kind of our business, so to speak,” said Tamara Pigott, executive director of the Lee County Visitor & Convention Bureau. “If you’ve ever been on the east coast of Florida, you’ll understand why they want to come here. It’s a lot more laid-back pace here on the west coast.”
American Dream Meadowlands (Meadowlands Sports Complex)
Location: East Rutherford, N.J.
Size: 2.8 million square feet
This retail behemoth — which sits on 104 acres of former swampland in northern New Jersey — has been reimagined multiple times in the last decade.
It was originally conceived as the Meadowlands Xanadu — a joint venture between Mack-Cali Realty, the Mills Corporation and the New Jersey Sports and Exposition Authority — with a mall anchored by outdoors equipment retailer Cabela’s and an indoor ski slope. But construction stalled in 2004 when Mills went bankrupt.
Construction was restarted four years later by a group of lenders who took over after the Mills bankruptcy, but it stopped again in early 2009, when the Lehman Brothers’ bankruptcy dried up financing for the project. In 2010, the Related Companies proposed taking over the stalled project and renaming it, simply, the Meadowlands.
The next year, however, New Jersey Gov. Chris Christie stepped in on behalf of the state, which had provided millions in grants and wanted to fix what the governor considered “an eyesore.” He picked Canadian mall operator Triple Five as the developer. The firm, controlled by the Ghermezian family, renamed the project the American Dream Meadowlands, and has said it will model it after another of its projects: the Mall of America in Minnesota, the nation’s largest mall. Triple Five has put up $1.7 billion for the development, on top of the nearly $2 billion already spent since 2003.
Jeff Gural, chairman of the neighboring New Meadowlands Racetrack and of commercial firm Newmark Knight Grubb Frank, said Triple Five has “a terrific track record, both in Minnesota and in Canada.”
“They have the benefit [of the fact] that a couple of billion dollars have been lost already,” he said. “You’re building a $3 billion project, but it’s only costing you a billion.” (The basketball arena for the former New Jersey Nets is also in the area as is the NFL stadium for the Jets and Giants).
Triple Five will announce a new construction timeline as well as fresh details for the megaproject (the ski slope is, for now, expected to remain) before the end of the year, as soon as financing arrangements are locked in, according to spokesperson Alan Marcus. Triple Five plans to put up $200 million of its own money, Marcus added.
Trump International Hotel & Tower
Location: Chicago, Ill.
Size: 2.7 million square feet
Chicago’s second-tallest building after the Willis Tower opened in January 2008, just in time to give principal developer Donald Trump a financial headache.
Later that year, Deutsche Bank — the primary lender on the approximately $875 million, 1,389-foot condo-hotel — called in a $40 million loan, which Trump had personally guaranteed.
In 2010, after two years of legal maneuvering, the two sides reached a settlement that included a five-year extension on a roughly $600 million construction loan. All financing for the tower has now been paid off, Donald Trump Jr. told TRD.
The tower — which has 486 condos and 339 hotel rooms — also includes 110,000 square feet of retail, a restaurant named Sixteen (for the floor it’s on) and a spa. But the financial crisis coupled with the Trump-Deutsche feud slowed the pace of condo deals. According to published reports, nearly one-third of the condos were unsold in 2012. Now the condos are 94 percent sold, according to Trump Jr., with current asking prices ranging from $570,000 for studios to $32 million for a penthouse.
Trump Jr. declined to say how much he expected the property to sell out for in total, but his father said publicly in 2012 it might be five years before the Trump Organization makes any money off the deal.
“I’ve had better,” the elder Trump told Crain’s Chicago of his investment in the 92-story hotel and condo. “It was very expensive to build. I’m very proud of the building itself, but as an investment, I have done much, much better on other things.”
Still, the tower holds an exalted place in the Windy City’s luxury market. “It’s at the top — it’s [an] A+,” said Teresa Costantini, a broker with brokerage Koenig & Strey, who has a listing for a one-bedroom condo in the tower for $579,000, with a $55,000 deeded parking space available, too. The seller, she added, is an investor from the East Coast, one of the project’s many buyers from outside Chicago. “There are probably 10 A+ buildings in downtown Chicago. It’s really got cachet.”