Pace dorm plan a boon for downtown.
The 24-floor building will be at the corner of John Street and replaces the school's Clark Street residence at Brooklyn Heights, managed by Education Housing Services, which Pace will vacate in 2013. The school seeks to centralize its student housing, providing a five-minute walk to its students living in residence halls.
SL Green has partnered with developer Jeff Sutton of Wharton Properties and Israeli company Harel Insurance Investments and Financial Services Ltd. to build 180 Broadway, with the two entities retaining a 51% interest in the property. A $90 million, five-year construction loan is being provided by Germany's Helaba Bank. SL Green and Harel will control the three-floor retail space, and seek to lease it to one or more upscale tenants.
Pace will not pay for the construction and instead has a 30-year leasehold condominium interest. Terms weren't disclosed.
The university began looking for space around a year and a half ago, hiring Newmark Knight Frank's David Falk and Kyle Ciminelli to scout Lower Manhattan for possible sites. The school considered both vacant existing buildings and potential new developments, said William McGrath, senior vice president and chief administrative officer of Pace, who added that he was "inundated" by calls from eager landlords.
One challenge for the school was finding a development partner. Unlike its larger neighbor to the north, New York University, Pace wasn't looking to own property and pay for acquisition costs. It also required the particular amenities of a dormitory, including laundry services and a gym the students. Dorms also typically do not have large living rooms in individual units, making traditional residential buildings unworkable without heavy renovations.
Thus, Pace decided to work with SL Green, the city's largest commercial landlord, to build a new building.
"SL Green is an extremely reputable commercial real estate developer, with a lot experience," said McGrath. "They presented the best plan."
Attorney Jack Bart of Stroock & Stroock & Lavan LLP represented Pace University in the deal while Stuart Mass and Noah Shapiro of Haynes and Boone, LLP and Fried Frank, Harris, Shriver and Jacobson LLP represented SL Green. Ben Shaoul of Magnum Management also advised the partnership.
Pace has existing dorms at 55 John Street, 106 Fulton Street and a mixed-use building at 1 Pace Plaza. The school also has campuses in Pleasantville and White Plains.
180 Broadway is part of a five-year plan for the school, which seeks to provide a five-minute commute to its 1,900 students living around Lower Manhattan. A total of around 7,600 students attend the downtown campus, including 4,500 undergraduate, full-time students.
The new resident hall is slated to open in 2013, and demolition of the existing building has begun. Karl Fischer Architect of Montreal designed the new building, which will include a student activities center on one of the floors.
Although other university expansions, particularly those of N.Y.U. and Columbia, have been heavily opposed by some local residents, the Pace expansion has been relatively well-received. The school said that there was no controversy surrounding the building deal, and local civic organizations have applauded the expansion.
"With Fortune 500 companies, startups, families, visitors and students, Lower Manhattan is at the center of the action, and Pace has been a part of it for 104 years," said Elizabeth Berger, president of the Alliance for Downtown New York, the local business improvement district. "I welcome this exciting decision to build dorm and retail space in the center of the district."
Pace continues to look at other possible sites, but 180 Broadway is the largest step in reorganizing its campus. "We wanted a very high quality partner and a very high quality building," said McGrath. "We've achieved both."
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|Comment:||Pace dorm plan a boon for downtown.|
|Publication:||Real Estate Weekly|
|Date:||Jan 5, 2011|
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