DEALS of the YEAR
Development
In Times Square, SJP Starts
Massive Spec Office Tower
In a particularly proactive—and bold—move,
SJP Properties broke ground last summer
11 Times Square
The
DEALMAKERS
Owner: SJP Properties (Steven J. Pozycki,
chairman and founder) and Prudential Real
Estate Investors
Owner’s Representative: Goodwin
Procter LLP
Lenders: PNC Capital Markets and Banc of
America Securities
Lender’s Representative: Schiff Hardin
Architect: FXFowle Architects
Construction Engineer: Plaza Construction
MEP Engineer: Cosentini Associates
on the first speculative office development
Midtown Manhattan has seen in years. The
40-story, 1.1-million-sf tower, which SJP is
building in a JV with Prudential Real Estate
Investors, sits at 11 Times Square.
For SJP, the driver behind the development was the expected shift in the local
office leasing market. According to the firm,
leases representing some 60 million sf of
space will begin rolling over in 2010. Many
of those tenants are leasing satellite locations. When it comes time to look for new
digs, it is likely they will want to consolidate
under one roof, but there are few sizable
blocks of office space to accommodate
them.
According to SJP, 11 Times Square is the
only new large-scale property available for
lease in Midtown. The $1.2-billion project,
which also has 55,000 sf of retail on the first
three floors, is running ahead of schedule
and the estimated delivery is December
2009. Located at 42nd Street and Eighth
Avenue, the site is believed to be the last
available parcel in Times Square. Goodwin
Procter negotiated the purchase and financing of the site and the entitlement process.
A 36-month, $720.4-million construction
loan is helping to fund the development.
PNC Capital Markets and Banc of America
Securities served as joint lead lenders. The
law firm of Schiff Hardin spoke for the
lenders and Goodwin Procter again advised
the borrower.
The tower is being built to achieve LEED
Gold certification and a subway entrance
will be incorporated into the 42nd Street
building façade.
Structural Engineer: Thornton Tomasetti
Vertical Transportation: Van Deusen
Associates
Specification Writer: Construction
Specifications Inc.
“This project is consistent with SJP’s history
of capitalizing on supply and demand ineffi-
ciencies in the marketplace. The Times
Square office market is now one that rivals
any other Midtown location in terms of both
cache and amenities.”
STEVEN J. POZYCKI
Also of Note
The Western Michigan market took a big hit last
year when office furniture maker Steelcase shut
down manufacturing operations in Grand
Rapids. While the headquarters and training
center remain occupied, Ashley Capital LLC
early last year bought the rest of the campus—
18 buildings totaling 4. 5 million sf on 206 acres
and with an average age of 30 years—and set
about redeveloping the complex. Oliver
Hatcher Construction, Progressive AE, ASTI
Environmental and Grubb & Ellis are also
involved in the Grand Rapids Commerce
Center, expected to reach full build-out in 2011.
After considering six developers, the City of
Lake Highlands, TX tapped Prescott Realty
Group and Cypress Real Estate Advisors to
build a 70-acre, transit-oriented development
with 1. 9 million sf of retail, office, residential and
recreational space. Ground on the $400-mil-
lion, RTKL-designed Lake Highlands Town
Center broke in November, and phased completion will take place from 2010 through 2013.
The development team, which plans to pursue
LEED certification on the project, received public financing from the City of Dallas, the North
Central Texas Council of Governments and
Dallas County. Amegy Bank provided construction financing.
Browning/Duke LLC, a JV of Duke Realty and
Browning Investments, began work last April on
a 1.2-million-sf, $45-million build-to-suit for
Prime Distribution Services Inc. The third-party
logistics provider will fill AllPoints Midwest
Building One, the first structure at the 925-acre
AllPoints Midwest business park in Plainfield, IN.
The facility was designed by JRA Architecture
LLC and LaSalle Bank provided financing.
One Hundred Oaks Plaza, built in 1967, was
Nashville’s first enclosed shopping mall, but it’s
been in a period of decline for the past 15
years. Dallas-based investment group 100
Oaks Plaza LLC, a partnership of Anthony T.
Ruggeri and Frank Mihalopoulos, bought the
50% occupied, 57-acre property in 2006 and
began a $90-million redevelopment in August
2007 to convert the 900,000-sf asset to mixed
use. Vanderbilt University Medical Center will
use 436,524 sf as its first major satellite location
and retailers will fill more than 450,000 sf.
Completion is scheduled for December. JP
Morgan provided financing, Gresham Smith
