Investor Group Acquires Times Square Development Site for $430 Million
Alessia Pirolo Oct. 17, 2012, 2:28 p.m.
A venture between the Witkoff Group, Maefield Development, Infinity Urban Century–and New Valley, an investment unit of Vector Group–completed the $430 million acquisition of a development site at 701 Seventh Avenue in Times Square, where it plans to build a 340,000-square-foot, 36-story, multi-use complex. Times Square Gateway Center, located between Seventh Avenue and 47th Street, will feature retail space, a hotel tower and the nation’s largest single LED screen for Broadway’s iconic lights and advertising.
Steven Kassin, co-managing partner of Infinity Urban Century, confirmed the amount of the investment to The Commercial Observer.
Barry Sternlicht’s Starwood Property Trust and Starwood Capital Group provided $475 million in combined acquisition and construction financing for the development. The loan will have an initial funding of $375 million with $100 million of future funding for redevelopment costs and also contains an equity participation right for the lender.
The joint venture between Maefield Development, Infinity Urban Century, the Witkoff Group and New Valley announced it will spend $170 million to develop the retail complex and another $200 million for the hotel tower.
The $800 million project is expected to be operational within two years and fully complete in three years. An existing eleven-story office building at 701 Seventh Avenue will be partially demolished to make way to the complex. It will feature 130,000 square feet of retail space facing Times Square, a 500-room hotel tower and a 24,000 square-foot LED sign wrapping around its façade at 100 feet of height.
The roughly 500,000 people who –according to the Times Square Alliance– go through Times Square every day will be exposed to the advertising on the huge LED sign. “Digital signs in Times Square can generate millions of dollars a year for landlords,” Mr. Kassin said.
“Most buildings in Times Square are a recreation of old properties, that have limitations,” Mr. Kassin added. “Our completed project will be the first building delivered in Times Square that is programmed and designed for the current massive consumption and flow of traffic.”
“The Times Square Gateway Center will greatly enhance the north end of Times Square”, said Ike Franco, co-managing partner of Infinity Urban Century. “This project has the potential to become one of the most innovative New York City developments in decades and to further cement the image of Times Square as the most vibrant global retail and entertainment district”.
“Our team worked side by side with the Witkoff Group and its partners to provide a flexible financing solution that enabled them to quickly move forward with the transaction,” said Marcos Alvarado, senior vice president at Starwood Capital Group. “Times Square is an iconic destination and we are excited to facilitate a transaction that will allow the redevelopment of a marquee property in the area.”
Wallace Schwartz and Douglas Heitner of the law firm Kasowitz, Benson, Torres & Friedman represented The Witkoff Group and New Valley in the acquisition.