NEW YORK CITY—Gaining RXR Realty as a joint venture partner, developer Youngwoo & Associates—the company that won the right to redevelop Pier 57 into a retail and events hub along 12th avenue—has reached a deal to build more of the complex as office space, according to Crain's New York Business. RXR plans to convert 200,000 to 300,000 square feet of the pier space to office use, allowing it to jump on the increased interest in the area on the part of tenants.
"Being right out on the Hudson River, it is among the most unique spaces in the city and exactly the kind of environment, with open layouts, high ceilings, amenities and public space, where tenants want to be," says Scott Rechler, RXR's chief executive.
Rechler's interest in the pier stems in part from his success with the Starrett-Lehigh Building, a nearby 2.3 million-square-foot office building that RXR purchased in 2011 for nearly $1 billion.
"At Starrett we're 98% occupied, our rents have doubled, and our biggest challenge is that we don't have enough space for tenants who want to be there," he asserts.
RXR will oversee building and leasing the office component of the project while Youngwoo & Associates will focus on its original vision of building a retail mall on the ground floor of the pier. As part of that plan, Youngwoo will install shipping containers in the space that will be repurposed as low-cost booths for retailers, an arrangement that it said will create a home for tenants who might not otherwise be able to lease traditional retail space, and create a unique mix of shops.
Seth Pinsky, an executive at RXR Realty who helped arrange the partnership, adds that having traffic from office tenants to the pier will help energize its retail spaces. Conversely, office tenants would be drawn to the location by the thriving retail, he predicts. "The two components help activate each other. The goal here is to attract the kinds of creative businesses that have become such drivers of the city's economy."
Neither Youngwoo nor RXR Realty would discuss the financial terms of the partnership. But Rechler estimates the conversion of the derelict pier would cost $350 million, about $150 million more than Youngwoo's initial estimate.
For more about this deal, see Crain's New York Business.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
