Re-Envisioning Real Estate Education
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193 Sp cial Section THE U.S. NORTHEAST The 3 World Trade Center build ing, certified Gold under the leadership in Energy and Environmental Design (LEED) rating system , uses recycled ra inwater in air condit ion ing and harnesses the energy derived from descending elevators. London, 80 percent of their space is new. Here, only 7 percent of the city's 400 million-plus square feet [37 million sq m] of space is new. To remain competitive, New York City needs to replace a lot of its aging buildings." New York is not alone. A number of cities in the U.S. Northeast are supplanting outdated office product with new thanks to strong, diversified economies: vigorous job creation: and increasing formation of businesses. Further driving development in the Northeast-New York, Massachusetts, Pennsylvania, and New Jersey-is continuing demand from the educa tion and medicine ("eds and meds") and tech nology sectors, among others. "Existing downtown Class A buildings in cities like Boston and New York are aging," says Revathi Greenwood, head of research for the Americas at Cushman & Wakefield. "Many do not have the conveniences required by today's tenants. The focus on new construction and on-site amenities means many landlords are stepping up their game to attract tenants. Food halls, roof decks, communal space with giant TVs, and golf simulators are all perks that land lords are using to attract tenants." Philadelphia has experienced a tremendous amount of growth in recent years, particularly from a populat ion standpoint, and expects to see continued solid performance in all develop More important, the $2.7 billion 3 World ment segments, especially multifamily, retail, Trade Center-designed by Pritzker Architec and hospitality, says Paul J. Commito, senior ture Prize-winning architect Richard Rogers and vice president for development at Brandywine his firm, Rogers Stirk Harbour + Partners-offers Realty Trust, a real estate investment trust some of the newest space in the metropoli- headquartered in the city. "Philadelphia has tan area. It opened in June. always had a diversified economy; that has only "'New York City continues to grow and broadened and deepened over the last few attract the world's leading companies and we years," he adds. need new office space," says Marty Burger, Boston's real estate fundamentals provide chief executive officer of Silverstein Proper for rapid growth in knowledge sectors as well ties, which developed the 3 World Trade as stability and innovation in more traditional Center tower. "If you look at other financial education and professional se rvices, says Carlos capitals of the world such as Hong Kong and Febres-Mazzei, director in the Boston office of 194 URBAN LAND FALL 2018 Special Section THE U.S. NORTHEAST Cushman & Wakefield arranged $429.4 million of acquisition financing secured by 550 Washington Street in New York City. Acting on behalf ofTrinity Wall Street, Cushman & Wakefield arranged $400 million of acquisition financing affordable housing, and modernization of our secured by 375 Hudson Street In New York City. Erected In 1987, the 19-story Class A office and retail building Is In infrastructure. We are p laying catch-up on t hese Manhattan's Hudson Square neighborhood. issues, but they appear to be at the forefront of our state and local agendas." real estate investment banking company Eastdil Secured. "As long as we continue to support t he growth in jobs and people, we will continue Cushman & Wakefield represented RXR Realty and to be one of the most attractive real estate Walton Street Capital in arranging $781 million of financing secured by 237 Park Avenue. The 21-story markets on the planet." he continues. "We still Class A office tower stands in midtown Manhattan near have some work to do, including accessible and Grand Central Terminal and the Chrysler Building. Cushman & Wakefield represented VanBarton Group in securing S205 million of acquisition financing for the Vogue. Located at 990 Sixth Avenue, the Vogue is a 374,000-square foot (35 ,000 sq m) mixed-use property that includes 320 residential un its. 116 URBAN LAND FAL L 20 18 An 18-story, 270-foot (82 m) office tower, 412 W. 15, completed this year, is the tallest building in Manhattan's trendy Meatpacking Distri ct. Together with an adapted historic building that connects to the new tower, Rockpoint Group's 412 W. 15 offers 250,000 square feet (23,000 sq m) of commercial space and was designed by CetraRuddy . New Jersey's economy and real estate sector are improving, too. "There is near-term opti mism from economic drivers including changes in the tax code and the promise of a loosening regulatory environment," says Daniel Ligorner, vice president at privately held real estate firm Transwestern. "New Jersey Economic Develop ment Authority incentives and a robust migrat ing talent pool continue to impact office devel opment as developers and corporate executives look to optimize value associated with high-pro file expansion, consolidation, and relocation." New York City Fueled by tenants in the technology, advertis ing, media, and information systems (TAMI) fields. as well as a resurgence in the finance. insurance. and real estate (FIRE) industries. New York City's office market remains one of the financial deregulation. "TAMI is also a growth strongest in the Northeast. According to Cush sector at 21 percent," she adds. "Facebook took man & Wakefield's Greenwood. 30 percent of approximately 250,000 square feet [23,000 sq Manhattan's leasing growth in the first quarter m] at 770 Broadway in Manhattan, bringing its of 2018 was led by the financial services sector, total footprint in that building up to 730,000 which has recovered to pre-Great Recession square feet [68,000 sq m]. Coworking is driving levels driven by interest rate increases and leasing activity as well at 21 percent." Algln Management's ARO- new, 62-story residential tower In midtown Manhattan-features 426 luxury rental residences. Designed by CetraRuddy of New York, ARO has 40,000 square feet (3,700 sq m) of indoor and outdoor amenity spaces and 15,000 square feet (1,400 sq m) of retail space. It is expected to be finished later this year. FALL 2018 URBAN LAND 197 Sp cial Section THE U.S. NORTHEAST and Environmental Design (LEED) rating system devised by the U.S. Green Building Council (USGBC), uses recycled rainwater in air condi tioning and harnesses the energy derived from descending elevators. It also is attracting trendy, creative tenants, like g lobal media investment management company GroupM, which leased 700,000 square feet (65,000 sq m). and man agement consulting firm McKinsey & Co., which signed up for 185,000 square feet (17,000 sq m). "Our leasing so far is going very well," says Burger. "We are searching for a major tenant for 2 World Trade Center and will start con struction as soon as we have one." A significant component of real estate value in the city derives from international investors. New York remains one of the top cities-if not the top city-in the worl d in which Design firm Cooper Robertson created the S28 million state-of-the- to invest, says Cushman & Wakefield vice a rt Edible Academy in the Bronx for the New York Botanical Garden. Completed earlier this yea r, the facility doubles the New York Botanical chairman Steve A. Kohn, who is president of Garden's facility for teaching. equity, debt, and structured finance at the firm. "Compared to other major global markets, New In March, Google purchased the 1.2 million York offers an attractive combination of U.S. square-foot (111.000 sq m) Chelsea Market located law and economic strength. a diverse market in and named after one of New York's hippest in terms of tenancy [financial services. tech, neighborhoods. The Mountain View multinational media, advertising, legal, life sciences], an excit technology company now owns two buildings ing place to live. work, and play-a benefit to in Manhattan, she notes, and if it expands Chel recruiting and retaining talent-and high cost sea Market, Google could have up to 4.5 million and difficulty of developing new supply." square feet (418,000 sq m) in the city. Further stimulating international investment The 3 World Trade Center building, which is in America's largest metropolis is readily avail certified Gold under the leadership in Energy able financing at virtually all levels. "Lenders value The first phase of Brandywine Realty Trust's mixed-use, master-planned community Schuylkill Yards is underway in the University City area of Philadelphia with the creation of Drexel Square, a 1.3-acre (0.5 ha) public green space that will feature an elliptical lawn and redwood trees, and the revamp of the iconic Bulletin Building, now known as One Drexel Plaza, designed by George Howe. 198 URBAN LAND FALL 2018 exposure in New York and pursue opportunities here accordingly," Kohn says. ''There are a sig nificant number of opportunities to invest equity, either in acquisitions of properties. recapitaliza tions of existing partnerships, or funding new development. Equity investors would always like to see more offerings; however, many owners of attractive properties are not interested in parting with their assets." Boston Boston's real estate sector is benefiting from g rowth in technology, medicine, and education. says Maura G. Moffatt, managing director of investments at Boston's Synergy Investments, a rea l estate investment and operating company focused on the local market. New York design firm Cooper Robertson worked with the Children's Over the past decade, she adds, a number Hospital of Philadelphia (CHOP) to plan and design a new 8.5-acre (3.4 ha) riverfront clinical research campus across the Schuylkill River in of nodes around Boston have t ransformed as Philadelphia.