Skip to main content

Less than meets the eye: decoding Forest City's announcement of new MetroTech leases

I've highlighted a few parts of a 6/15/11 press release from Forest City Enterprises, otherwise reproduced verbatim:
Forest City Announces 570,500 Square Feet of Leases in Downtown Brooklyn Properties

CLEVELAND, June 15, 2011 /PRNewswire via COMTEX/ --Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced new or renewal leases for six tenants totaling 570,500 square feet of space at the company's MetroTech Center office campus in Brooklyn, New York. Three office tenants and two restaurants have committed to new or expansion leases at Two MetroTech Center, and Morgan Stanley has renewed for a substantial block of space at One Pierrepont Plaza. MetroTech Center is a commercial, academic, and high-technology office campus on a 10-block, 16acre site in Downtown Brooklyn.

"The interest of these tenants and their commitment to our Brooklyn portfolio is confirmation of the strength of the New York office market and the quality of our MetroTech assets," said David J. LaRue, Forest City president and chief executive officer. "We thank these tenants for choosing Brooklyn and MetroTech, and I congratulate Bruce Ratner and our New York team on the relationships they have developed with these tenants that led to the execution of these leases."

The office leases at Two MetroTech Center include:
  • Polytechnic Institute of New York University, which signed a 15-year lease for 90,000 square feet of additional office space beyond what it already occupies at MetroTech;
  • The City of New York, which signed a 20-year lease for an additional 155,000 square feet of office and data center space for the City's Department of Information Technology and Telecommunications (DOITT);
  • and The General Services Administration, which signed a 10-year lease for 120,000 square feet to house the Internal Revenue Service.
In addition to these office tenants, two restaurants, Five Guys Burgers and Fries and a new, locally owned and operated French-American bistro and patisserie concept, have signed new leases in Two MetroTech for a total of 5,500 square feet. The eateries will serve office tenants, neighborhood residents and visitors staying in nearby Downtown Brooklyn hotels. Collectively, these leases at Two MetroTech account for the entire space previously occupied by SIAC/NYSE, and leave only the eighth floor vacant.

At One Pierrepont Plaza, Morgan Stanley has committed to a 10-year lease renewal for 200,000 square feet of space on the building's second through fifth floors. The renewal takes effect when Morgan Stanley's current lease for approximately 450,000 square feet expires in 2013.
Looking more closely

[Updated and clarified] The 365,000 square feet taken at Two MetroTech--thanks significantly to government tenants (275,000 square feet)--may not quite make up for the departure of SIAC/NYSE, which, according to Crain's, lost 387,000 square feet.

Yes, the 22,000 square feet remaining to lease is relatively small, but, at least according to that January 2011 Crain's report, J.P. Morgan Chase also left about 352,000 square feet at 4 MetroTech. No wonder Forest City Ratner was trying to recruit Panasonic.

At One Pierrepont Plaza, Morgan Stanley is set to renew less than half the space it leases, leaving a gap of 250,000 square feet.

It still does not bode well for the office space planned for the Atlantic Yards site.

We don't know what the tenants paid, but consider that Polytechnic--which was earlier reported as taking 120,000 square feet--was said (by an outside broker) to have gotten a very good deal.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…