Would-Be Buyers Picking High-End Rentals Over Starter Homes

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Do you know one or more of the many would-be buyers who can’t afford to enter the housing market? Given still-high interest rates and a dearth of existing homes, they are in a tough spot. But for some of these people, there’s an offsetting upside.

They might be able to justify an amenitized, higher-end apartment community, and wind up enjoying a superior quality of life than they might in a for-sale first home.

A study out today from CBRE revealed what the authors described as “a significant affordability gap” between homeownership and renting. There exists a yawning gulf of 35% between average monthly mortgage payments for new homes and rents for apartments, fueled by the 75% surge in average mortgage payments since late 2019. That wave, CBRE stated, has created “a steep financial barrier to homeownership for many households.” The premium to buy a home is expected to fall in coming years due to interest rate and home price changes. But, CBRE reported, “is it expected to remain wide enough to keep many people in the rental market for longer.”

This reality hasn’t been lost on apartment building developers. An increasing number of upper-crust rental buildings in U.S. cities are duking it out to appeal to a renting cohort prizing aesthetics, convenience and distinctive in-house experiences.

Cases in point: The for-rent residential buildings The Ellery in New York City and 2000 Biscayne in Miami, which both quickly topped the half-leased mark. The latter notched the 50% milepost in November, following a June launch, while the former reached that benchmark in late August, not long after inaugurating leasing in May.

Read more on forbes.com

New to New York, and Dazzled by the Energy of Times Square

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When Candice Gwak and David Xie moved from Southern California to New York City, they settled in Hell’s Kitchen, just a block from the chaos and crowds of Times Square, the very place many New Yorkers love to hate.

Outside the floor-to-ceiling windows of their one-bedroom apartment in The Ellery are the upper-level ramps and rooftop parking lot of the Port Authority Bus Terminal. The walls of their living room glow with colored light thrown from the ever-changing giant digital billboards nearby.

Their friends who knew New York couldn’t believe they’d live there.

“We’re not really fazed,” Ms. Gwak said. “Maybe it’s because we’re so new here, so everything is great.”

The couple moved in September. Mr. Xie, who works for an executive search firm, is focused on developing a sense of direction to avoid getting lost. Ms. Gwak, a lawyer, is learning to navigate her way through throngs of people, but she’s not annoyed by the slow-moving visitors — in fact, she relates to them.

She and Mr. Xie admitted they have behaved like tourists since they arrived.

“We bought CityPASS as if we don’t live here,” Ms. Gwak said, referring to a ticket that grants admission to several tourist attractions.

They visited iconic spots including Ellis Island, the Empire State Building and the Solomon R. Guggenheim Museum. They also took a guided boat tour around the harbor. They try to jam-pack their weekends with sightseeing and exploration.

On their excursions, they often realized that at the end of the day they’d be going back home, rather than to a hotel. Mr. Xie called that “the best feeling.”

“There were so many times we kept going, ‘Oh my gosh, we live here,’” he said.

Years before they even met each other, they had separately gotten a taste of New York City and wanted more.

Back in 2017, still in college, Ms. Gwak had visited a friend who lived in the East Village. The trip made a lasting impression on her, and she set her sights on moving permanently, at some point, though she couldn’t envision the path.

Read more on nytimes.com

A Modern Hub for Life Sciences Rises from a 1920’s New York Gem

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The life-sciences industry is a growing part of New York’s economy. It accounts for 1,000 companies and 20,000 jobs, and researchers there received $3 billion in funding from the National Institutes of Health last year. The city has invested heavily in the sector and changed zoning rules to unlock millions of square feet of real estate for labs. All this has paved the way to open a multitenant life-sciences facility, called West End Labs, situated inside a 1920’s edifice on the mostly residential Upper West Side that’s been adaptively reused and made state-of-the-art by Perkins&Will.

The firm has designed scientific research centers across the country for more than 40 years, including the Allen Institute for Brain Science in Washington and the National Bio and Agro- Defense Facility in Kansas. It’s also been involved in New York’s push to become a life-sciences hub; a decade ago, Perkins&Will contributed to a Manhattan nonprofit’s study about how to make the city more competitive in the industry. It connected with Elevate Research Properties, a life-sciences subsidiary of Taconic Partners, which acquired and developed a midtown building into the Hudson Research Center in 2016 and is currently developing Iron Horse Labs, a research facility on the Upper East Side. When Elevate Research Properties bought this eight-story, over 400,000-square-foot building 10 blocks north, it hired the studio to retrofit it for life-sciences companies. “We looked at an array of properties to determine their suitability as conversion candidates, and this site, with its proximity to transit, opportunities for private entrances and direct loading on multiple levels offering ‘building within a building’ tenant potential, and 55,000-square-foot, center-core floor plates, is unmatched,” Matthew Malone, senior vice president, life science, Taconic Partners/Elevate Research Properties, says. “A new exterior enclosure not only improves its thermal performance but also introduces abundant natural light into the work environments, which of course includes the labs.”

Read more on interiordesign.net

NYC developer plans to build 28-story office tower in trendy Manhattan neighborhood

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The developer behind Essex Crossing plans to build a nearly half-million square-foot office tower on Trinity Church land at Hudson Square — a sign of confidence in Manhattan’s troubled commercial market.

Taconic Partners and its investment partner Nuveen Real Estate unveiled images of One Grand, a tower to rise at the corner of Grand and Varick streets where Soho, Hudson Square and Tribeca converge.

The project designed by SHoP Architects is shown here for the first time.

It will rise 28 stories with 430,763 square feet of office space.

The first office floor will be 100 feet above ground with a public school and retail below it.

The land is currently vacant.

Taconic won’t start construction until it finds an anchor tenant — standard for nearly all new developments. The leasing task falls to a JLL team headed by New York president Peter Riguardi.

Several “supertall” office projects are theoretically planned in Midtown, but their designs are vague and none is anywhere near to coming out of the ground during the market downturn.

One Grand’s more modest size and fully-realized architecture give it a head start over the field.

The land is owned by Trinity Church, which remains one of Lower Manhattan’s major landowners. It chose Taconic and Nuveen to develop the site in 2019.

Taconic says the tower will boast advanced wellness and sustainability features, a 13,000-square-foot amenities center, 20,000 square feet of outdoor space and 14-foot ceiling heights.

Riguardi, citing Manhattan’s “much-documented flight to quality,” said One Grand “is an opportunity for forward-thinking companies to secure a headquarters presence in this prized area.”

Taconic, a powerhouse in commercial and residential real estate, is currently developing the Hudson Research Center on far West 54th Street as well as three apartment buildings. The company’s Essex Crossing on the Lower East Side has been widely acclaimed as one of the city’s finest mixed-use projects ever.

Read more on nypost.com

Icahn Mount Sinai Takes 10K SF at Hudson Research Center – Commercial Observer

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The Icahn School of Medicine at Mount Sinai set up a new Human Immune Monitoring Center (HIMC) at the Hudson Research Center, Commercial Observer has learned.

Icahn Mount Sinai signed a 10-year lease for 10,000 square feet of prebuilt lab space inside the development at 619 West 54th Street, according to owners Silverstein Properties and Elevate Research Properties, Taconic Partners’ life sciences arm. Asking rents in the property are more than $100 per square foot.

The HIMC will try to create blueprints of patient-specific immune profiles to offer them more specific diagnoses and treatments, according to owners. Since the space was part of Hudson Research Center’s prebuilt lab options, which are 90 percent leased, HIMC was able to get up and running quickly.

This isn’t the first deal with Ichan at the 320,000-square-foot life sciences development. In May, the school signed a 23,000-square-foot lease and partnered with the Rensselaer Polytechnic Institute to open the Center for Engineering and Precision Medicine.

“We continue to see the resiliency of the life sciences market here in New York City at a time when the overall commercial real estate market remains challenged by macroeconomic conditions,” Matthew Weir, president of Elevate and executive vice president at Taconic, said in a statement. “We are excited to grow our relationship with Mount Sinai and are proud to be nearing the end of our successful redevelopment of the Hudson Research Center.”

The deal was done directly between the tenant and owner, a spokesperson for the landlords said.

The 10-story building between 11th Avenue and the West Side Highway was previously a film editing house for Warner Bros. Pictures.

Taconic bought it in 2012 for about $110 million with plans to turn it into a research center, as CO previously reported. Silverstein jumped on board in 2017 — when the center opened — after buying a majority stake that valued the property at more than $180 million, the New York Post reported.

In September, Silverstein put its ownership stake up for sale, with pricing expected to reach into the $300 million range, as CO previously reported.

Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.

Read more on commercialobserver.com