Times Square Developers Will Keep Contractors Busy

Some two decades ago, New York City began a huge cleanup of its downtrodden theater district, vastly improving the fortunes of the pedestrian-clogged Times Square neighborhood. In recent months, that progress has gone into high gear, with several redevelopment projects about to get underway. Ground is scheduled to be broken this year on an $800 million, 39-story hotel and retail complex at 701 Seventh Avenue, at the northern edge of Times Square, and plans for a $140 million renovation of the retail beneath the New York Marriott Marquis Times Square are also under way.

Each day 370,000 pedestrians traipse through the Times Square bow tie, where Broadway and Seventh Avenue intersect, and each year shoppers spend $6.5 billion in the area’s stores, according to the Times Square Alliance. That spending has contributed to the skyrocketing retail rents.

Rents in the area are approaching Fifth Avenue levels, and while a lot of this is due to the cleanup that began in the 1990s, even more is due to the massive influx of tourists over the last few years. The city expects more than 54 million tourists this year.

In the wake of such demand, developers are snatching up properties and repositioning buildings to create additional supply. One of the largest projects is at 701 Seventh Avenue, at 47th Street, where a building will be razed and replaced by 85,000 square feet of retail space and a 500-room Marriott Edition boutique hotel.

The retail space, which will feature 25-foot glass storefronts, will be spread across the first four floors and two basement levels, and 40,000 square feet on the seventh and eighth floors will be set aside for an event space, club, several restaurants and 6,000 square feet of terraces. The building will have a 20,000-square-foot LED sign on its facade.

One block south, Vornado Realty Trust has been leasing retail space at its building at 1540 Broadway, between 45th and 46th street, signing a deal with Sunglass Hut for $2,025 a square foot, a record for the neighborhood.

Vornado also plans a $140 million redevelopment of the retail space across the street at 1535 Broadway, underneath the New York Marriott Marquis Times Square. The project, which would include closing the arcade that runs under the hotel, is in the planning stages. Ground is expected to be broken late this year or early next.

As part of the redevelopment, Vornado plans to create a glass facade for the stores, which will include 20,000 square feet on the ground floor and 25,000 square feet below ground, and reposition them to face Broadway.

Vornado is also installing a 25,000-square-foot, 80-foot-high LED sign that will cover the Broadway face of the hotel and wrap 50 feet around each side of the building. Vornado declined to comment.

New development is also under way at 1565 Broadway, at 47th Street. The landlord acquired the two-story building recently for $30 million. He is planning to demolish the building and replace it, and will expand the current two-story sign into a large 14-story LED sign.

Activity also is occurring along side streets. At the former headquarters of The New York Times, at 229 West 43rd Street, the landlord is asking $2.2 million a year for the 28,000-square-foot space which has a marquee and conspicuous signs.

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[see ElectricWeb | Blogger, Oct 17, 2012]