Forest City Ratner Hikes Investment In Midtown Commercial Office Market

Forest City Ratner is making a bigger investment in the Midtown commercial office market by increasing its ownership stake in the 52-story New York Times headquarters, which is scheduled to open next year across from the Port Authority bus terminal.The developer announced yesterday it would buy out the share of its investment partner, the Dutch bank ING, and continue to collaborate with the New York Times Company in the estimated $850 million project. Forest City will now be the sole owner of floors 29 through 52, about 700,000 square feet of space, and the Times will own floors two through 28.A spokeswoman for Forest City, Jane Pook, said the developer had not anticipated buying out ING when they became partners in the development but is now “very bullish” on the Midtown commercial office market. The buyout was for an undisclosed amount of money.So far, leasing activity has been limited – the first lease, for 100,000 square feet, was recently signed by the law firm Seyfarth Shaw LLP.Yet real estate analysts have said that the tables are now turning after years of a cool commercial market and a red-hot residential market. The new trend has caused increased demand around the Times tower, an area that was previously considered run-down and too far west, they said. A site next door to the new Times tower, owned by Milstein Properties, may soon be developed, according to a report in yesterday’s New York Post.The research manager of Grubb & Ellis, Richard Persichetti, said the space at the top of the Times tower is likely to command $80 a square foot and more.“New class A space in Midtown is tightening. Space is scare,” Mr. Persichetti said.One commercial real estate analyst said the transaction may have nothing to do with the hot Midtown market, but could just be a routine buyout related to a number of internal factors.Earlier this year, Forest City unloaded its share of the 444-room Hilton Times Square nearby.In 2002, the state cited “urban blight” to condemn 10 properties and oust more than 50 small businesses to make way for the Times building. Citing increased tax revenues and the addition of jobs related to the project, the city gave the Times about $26 million in tax breaks, but it rejected an application by Forest City for more than $400 million in tax-exempt Liberty Bonds that were issued by the federal government after September 11, 2001, to help spur development.The building is designed by architect Renzo Piano.Forest City, one of the city’s busiest developers, is also seeking to use eminent domain in its proposed Atlantic Yards project in Prospect Heights, Brooklyn.

Forest City Ratner Hikes Investment In Midtown Commercial Office Market

Forest City Ratner Hikes Investment In Midtown Commercial Office Market

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