LIC Makes Way for Three New $875M Residential Towers

Long Island City gets glassier by the day, and now Tishman Speyer is teaming up H&R Real Estate to build a three-tower, 1.2 million-square-foot “luxury residential rental development” with 1,600 residential units and 30,000 square feet of retail space. The partners will put $875 million into the development, with construction slated to kick off in 2015, playing out in three phases. Phase I will see the construction of a 42-story, 370-foot building with 700 units. Occupancy is expected for 2017.

Tishman Speyer and H&R Real Estate Investment Trust have purchased a large development site and are moving ahead with development on another phase of Long Island City’s Gotham Center.

The partnership has extensive plans for redeveloping two blocks in the Queens Plaza area of Long Island City.

H&R announced it would pay $55.6 million for a 50% stake in the land, which it is acquiring from a partnership that includes the Modell family, owners of the sporting goods chain of the same name.

Tishman Speyer, which had been one of the Modell family's partners in the site, has owned an interest in the land for over a decade, and was able to convert that stake into its ownership in the new joint venture.

The parcel is bordered by Jackson Avenue to then north, LIRR/Sunnyside Yards to the south, Queens Boulevard to the east, and Orchard Street to the west.

Queens Plaza Residential Development - Site B, was assembled from eight separate properties:

• 28-10, 28-20 & 28-34 Jackson Avenue
• 30-02 Queens Blvd
• 42-02 & 42-26 West Street
• 42-01 & 42-33 Orchard Street

Click to enlarge

The development will be built in three phases, with the initial phase involving the construction of a 42-story tower, which will include 700 rental apartments.

Construction on the first phase is expected to begin in 2015 with occupancy expected to commence in 2017. Two more buildings will follow.

Tishman Speyer will act as the developer and project manager.

By the time the development is complete, Tishman and H&R Real Estate Investment Trust aim to build 3 towers, 1,600 residential units and about 30,000 square feet of ground floor retail.

Tishman was the developer of 2 Gotham Center, a 21-story building that was once the home to a municipal parking lot that is now leased by the NYC Department of Health & Mental Hygiene.

Toronto-based H&R acquired 2 Gotham Center from Tishman Speyer for $415.5 million in 2011.

“We are excited at the opportunity to participate with Tishman Speyer in the long-term growth and evolution of Long Island City,  at the intersection of two of the area’s most important thoroughfares”, said Tom Hofstedter, the president and chief executive of H&R.

“This project further diversifies H&R and expands our foothold in one of the world’s largest and most prosperous metropolitan areas.”

Real estate experts claim that the Queensboro Plaza/Court Square area can absorb the influx of new units.

“I welcome this development,” said Justin Elghanayan, president of Rockrose Development Corp, which owns the Linc in Court Square and is developing several other sites nearby.

“While in the short term competition can depress rents slightly, over time it brings in more retailers and is positive for the neighborhood.”

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