NEW YORK | 3 Columbus Circle | FT | FLOORS
 

The 8 September 10 WSJ reports that 3 Columbus Circle, a 700,000 square foot office building, might be razed and replaced with a residential tower. A residential tower with this much square feet (and the small foot print of this tower) should exceed 300m.

http://online.wsj.com/article/SB1000...DDLETopStories

NY REAL ESTATE COMMERCIALSEPTEMBER 8, 2010.Ross Raids Wobbly Tower
Related Cos. Boss Eyes Debt-Laden 3 Columbus Circle for City's First Nordstrom

By LINGLING WEI And ELIOT BROWN

Stephen Ross, one of the nation's leading developers, has swooped in to try to snatch a troubled office tower near Columbus Circle from a smaller rival in hopes of turning the property into the city's first Nordstrom department store, according to people familiar with the matter.

http://si.wsj.net/public/resources/i...0907183302.jpg

The 26-story 3 Columbus Circle is at the center of a struggle for control between developers Joe Moinian and Stephen Ross.
.The 26-story building at 1775 Broadway, which has been renamed 3 Columbus Circle, is one of the crown jewels in the real-estate empire belonging to Joe Moinian, who bought many properties near the market's peak.

Mr. Moinian has been trying to hold on to the building and was close to restructuring its $250 million mortgage. But a venture led by Mr. Ross's firm, Related Cos., and Deutsche Bank AG came out of nowhere to purchase the mortgage on the property and is now seeking to foreclose, the people said.

Related has been talking to Nordstrom about its intent to foreclose on 3 Columbus Circle then demolish it and build a new tower in its place, these people said. Related, which developed the $1.7 billion Time Warner Center a block away on Columbus Circle, is thinking about putting apartments on top of the store and will seek architects to design the building in coming weeks, the people said. Nordstrom has been eyeing Manhattan for years. Representatives at Related and Nordstrom declined to comment. Mr. Moinian also declined to be interviewed.

The fight is the latest example of firms that have avoided getting clobbered by the property downturn now moving to take advantage of weakened competitors. Mr. Moinian—a 56-year-old Iranian-born developer who had his first job in a restaurant in Forest Hills, Queens, after coming to the U.S. at 16—went on a buying spree during the boom years. His portfolio grew to over 20 million square feet, but it left him with a bad hangover of over-leveraged buildings that he has been attempting to save. So far he has succeeded in restructuring most of his problem loans.

Mr. Moinian had been hoping to save 3 Columbus Circle, a 700,000-square-foot building he acquired in 2004 in a deal that valued the property at about $250 million. He spent about $100 million upgrading it. The tower is only 16% occupied, according to real-estate-services firm CoStar Group Inc. A spokeswoman for Mr. Moinian said in a written statement last month that his company, the Moinian Group, "is now actively marketing" the building and "closings [are] expected soon on major office and retail tenants."

But the struggles made 3 Columbus Circle a target for the opportunistic investors who have been circling commercial real estate, particularly in Manhattan and other prime markets. A common strategy of these investors has been to buy the debt on troubled buildings at a discount and then try to foreclose.

What's unusual about 3 Columbus Circle is that the Related venture bought at close to full face value the $250 million mortgage debt on the tower from the firm overseeing the loan, the people said. The move indicates that the Related group is determined to win control of the building in a bet that the property is worth more than the mortgage debt.

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Zuma Press

Developer Stephen Ross
.Mr. Moinian could still fend off the foreclosure attempt by paying off the mortgage debt. But that's going to be tough in a credit-starved real-estate market. Mr. Moinian also could buy time by seeking bankruptcy protection for the property, real-estate experts say.

The grab for 3 Columbus Circle is a high-stakes bet for Mr. Ross, 70 years old, who founded Related in 1972 to focus on developing government-subsidized housing. In the 1980s, the company expanded into developing luxury rentals, office towers and other commercial property. Related also is the designated developer of the massive Hudson Yards project on the West Side and is building a 1.2 million-square-foot hotel and apartment project on West 42nd Street.

In this current real-estate downturn, Mr. Ross's company has been brought in by lenders to help rescue many troubled developments. For instance, lenders to the failed Xanadu project in New Jersey have been talking to potential partners, including Related, to help complete the retail and entertainment development after a group led by Colony Capital decided to give it up to creditors last month.

The bet on 3 Columbus Circle shows that Mr. Ross is getting more aggressive, going directly after distressed commercial real-estate assets rather than waiting to be hired by an interested party. Still, the company has its share of problems, too. Among them is the company's $3 billion plan to redevelop the village at the base of the Snowmass ski mountain near Aspen, Colo. A four-bank group in July filed a notice to foreclose on the first phase of the Snowmass Base Village project due to missed payments on a $386 million construction loan. Last month, Related sued the bank group for failing to fulfill its funding commitments for the project.

While Mr. Moinian is playing defense in the struggle for 3 Columbus Circle, he has some powerful allies. He has been advised in some of his restructurings by Robert Verrone, the former head of the commercial real-estate unit of Wachovia Corp., now part of Wells Fargo & Co. Mr. Verrone, who earned the nickname "Large Loan Verrone" for his penchant for big deals during the boom times, left Wachovia in 2008 and has since been advising troubled property owners and developers.

"We have stabilized our portfolio to a great extent and will always be vigilant about protecting our assets and tenants/residents, as well as our investment partners," Mr. Moinian said in the August statement. "This is a job that never ends."

Write to Lingling Wei at lingling.wei@wsj.com

Please raze this!!!!!!! It's a shame what has already been done to this building.

This tower likely will be the 4th 300m+ tower rising along the Central Park skyline, joining:

Carnegie 57;
Torre Verre; and
225 W 57th St.

http://therealdeal.com/newyork/artic...irst-nordstrom

Ross moves to snatch Moinian's 1775 Broadway for city's first Nordstrom
September 08, 2010 09:30AM

Stephen Ross Stephen Ross is angling to take hold of Joseph Moinian's 1775 Broadway, the distressed, 26-story office tower that once housed Newsweek magazine, and turn it into the city's first Nordstrom department store, sources told the Wall Street Journal. Moinian has been struggling to hold onto the building, which he renamed 3 Columbus Circle in conjunction with a roughly $100 million renovation, but was close to restructuring its $250 million mortgage before a venture led by Ross' the Related Companies and Deutsche Bank AG purchased the debt at nearly face value and filed to foreclose last week. Related has reportedly already talked to Nordstrom, which has been seeking Manhattan space for years, about its plan to foreclose on the property, which currently just 16 percent occupied. The company apparently told the retailer that it would demolish the existing building and build a new tower on the site, which would house the department store and, possibly, apartments above it. Though Moinian could still stave off foreclosure by paying off the mortgage or seeking bankruptcy protection, Related is said to already be looking to hire architects to design its new building. [WSJ]

http://ny.curbed.com

Building's $100 Million Renovation May Result in Wrecking Ball
http://ny.curbed.com/uploads/2010_9_3columbuswreck.jpg

Developer Joseph Moinian spent $100 million rebranding the old Newsweek building on Broadway and 57th Street as 3 Columbus Circle and covering up its masonry facade with glass. But that controversial makeover hasn't really improved the office building's standing. Only 16% of the space is occupied, and Moinian is now facing foreclosure. Hey, here's an idea: Whaddaya say we tear the whole thing down and try again?

holy shit thats awesome!!!!!!!!!!

This is some total bull. They did an unnecessary cladding, and when they realize they messed up, they want to tear it down? This is a crying shame.

who cares as long as we get that 300 meter tower :D

Totally agree. This building is a perfect example of the office glut in Midtown and how its being underutilized. This building is on the train, right by plenty of great hotels and entertainment, has views of central park, just underwent a 100M dollar renovation, and STILL cant be sold.

The super-tall proposal strikes me as a farce too. It would be cool if it happened, but it seems the only way you can grab headlines today is by proposing a super-tall building and pretending you'll get started soon.

^
Midtown Manhattan has the nation's lowest vacancy rate. There's definitely no office glut. If anything, there's a major shortage for big space users.

The likely reason Moinian hasn't leased this property is because he's likely to lose the property. Moinian has too much debt load. You don't strike a deal with someone about to sink.

As for the super-tall, the company in question is Related, and unlike the other big talkers, they actually build, and with their own money.

Not saying I have any clue what's going on, but you can be sure Steve Ross of Related doesn't talk trash. If he gains control of the property, and wants to built a supertall, then that's what he'll do.

He already did the Time Warner Center just to the north, and Random House Tower, just to the south.

Certainly a very interesting set of circumstances and quite frankly, unexpected. It’s not even my money yet I still feel ‘bad’ about the waste if this does indeed happen. I’ve always liked this building, prior to the reclad, and was hopeful that the renovations would turn things around for this one.

On the flipside I do admire Related’s actions; this is exactly what a developer should do in this environment as long as the firm has the proper backings to do so.

I take Related very seriously because I think they are one of the more reputable development firms, so I’m sure there is a strong degree of truth as to their statements about a replacement. This should be interesting to see play out.

What an epic fail, but a new supertall will surely erase all the bad memories this building has produced. Gotta feel for Moinian who went all out to attract tenants.

What supertall proposal are you talking about???

There's no actual proposal here yet, but change is definitely in the air as Extell plans for it's second major tower on 57th Street, which is accross the street from this site. Related did such a good job with the Time Warner Center, the proximity of all these towers will change the skyline of Central Park dramtically.


Some photos of the building I took in August...

http://www.bluemelon.com/photo/19256/787593-T800600.jpg___http://www.bluemelon.com/photo/19256/787594-T800600.jpg


http://www.bluemelon.com/photo/19256/787595-T800600.jpg


http://www.bluemelon.com/photo/19256/787596-T800600.jpg


2 Columbus & Time Warner Center

http://www.bluemelon.com/photo/19256/787597-T800600.jpg


Shown here, you can see its relation to other planned towers...(behind 2 Columbus, pre-clad days)

http://ic2.pbase.com/o6/06/102706/1/...g/original.jpg

This made my day, and Related seems to be one of those companies that when they talk big, they actually come through with something massive and in the case of C57 something beautiful.

I don't want to get too ahead of myself here but in say 4 years time, we could have C57, Tower Verre, 225 W57th St, and this all over 300M and all either under construction or completed. That could be utterly amazing.

I think you're already too far ahead. Related first needs to get control of the site...

Keep in mind that a flagship Nordstrom will take a good amount of floorspace from the apartment tower, which could be in the range of the tallest apartment buildings already standing on 57th. Residential would work well here, as the area is primarily residential anyway, and not in the heart of Manhattan's commercial district. Meanwhile, Related also has the Hudson Yards development to get started, eventually.

Didn't Comedy Central used to be in this building?

Probably, I don't recall really. Maybe someone else can confirm.

The re-cladding really ruined this building! It looks like it belongs in some office park in Dallas. I can't believe they messed around with a building from the same architects as built the Empire State Building.

There's been talk of Nordstrom getting into Manhattan for a good 10 years. With Shops @ Columbus and the other new retail on Broadway in the lower 60s, this would seem like the perfect place for a department store.

http://www.cityrealty.com/new-york-c...demolish/34502


Related and Deutsche Bank reportedly buy mortgage for 1775 Broadway to demolish it

September 08, 2010 By Carter B. Horsley

http://www.cityrealty.com/graphics/u...bway1775as.jpg

The Related Cos. and Deutsche Bank AG have acquired the $250 million mortgage on the 26-story office building at 1775 Broadway between Broadway and Eighth Avenue, which is known now as 3 Columbus Circle, and are considering demolishing it to convert part of it to retail space for Nordstrom and part of it residential condominiums, according to an article today at wsj.com by Lingling Wei and Eliot Brown.

The article said that "according to people familiar with the matter," Related "has been talking to Nordstrom about its intent to foreclose on 3 Columbus Circle then demolish it and building a new tower in its pace," adding that Related "is thinking about putting apartments on top of the store and will seek architects to design the building in coming weeks."

The building contains about 700,000 square feet of office space and is, according to the article, "one of the crown jewels in the real estate empire belonging to Joe Moinian, who bought many properties near the market's peak."

The building's brown brick facade is in the process of being replaced by glass. For several years, the building was the headquarters of Newsweek magazine. It is across from One Central Park Place, the Hearst tower and the Museum of Arts & Design and it is diagonally across Eighth Avenue from the Time Warner Center of which Related was a co-developer.

"Mr. Moinian has been trying to hold on to the building and was close to restructuring its $250 million mortgage," the article said, adding that "Mr. Moinian - a 56-year-old Iranian-born developer who had his first job in a restaurant in Forest Hills, Queens, after coming to the U.S. at 16 - went on a buying spree during the boom years. His portfolio grew to over 20 million square feet, but it left him with a bad hangover of over-leveraged buildings that he has been attempting to save. So far he has succeeded in restructuring most of his problem loans."

The article indicated that "The tower is only 16% occupied, according to real-estate-services firm CoStar Group Inc."

"What's unusual about 3 Columbus Circle," the article said, "is that the Related venture bought at close to full face value the $250 million mortgage debt on the tower from the firm overseeing the loan, the people said. The move indicates that the Related group is determined to win control of the building in a bet that the property is worth more than the mortgage debt."

"Mr. Moinian," the article added, "could still fend off the foreclosure attempt by paying off the mortgage debt. But that's going to be tough in a credit-starved real-estate market. Mr. Moinian also could buy time by seeking bankruptcy protection for the property, real-estate experts say."

A 2008 article by David W. Dunlap in The New York Times noted that the Gensler recladding would "obliterate evidence of the building's history and heritage as a hub of Automobile Row."

"For now, a palisade of three-story Ionic columns, supporting a neo-Classical entablature, surrounds the base of the structure. This is a visible vestige of the Colonnade Building, designed by William Welles Bosworth and developed by John A. Harriss, a deputy police commissioner who also invested in real estate. Describing the plan in February 1921, The Times noted that the columns would not be flattened in order to increase the size of the storefronts between them....In 1922, the Hudson Motor Car Company leased the Colonnade Building's principal storefront, at Broadway and 57th Street, as a sales room for its Essex line of automobiles. (In recent decades, this space was the home of Coliseum Books....) Until 1926, the three-story colonnade was all that stood on the site. Then, Shreve & Lamb designed a 22-story addition, principally for the General Motors Corporation....General Motors projected its name on the skyline from the top of the building....Eventually, G.M. occupied almost all of the building. It stayed there until 1968, when it moved across town to Fifth Avenue."

This is such a shame. Just a disaster...