Related Companies is no longer providing a timetable for completion of Hudson Yards.
The news, buried at the end of a New York Times piece Thursday, follows a report in August by the New York Post that Related had not obtained approval from the Long Island Rail Road for the design of the development’s second phase. But the company did not say at the time that it would miss its announced 2024 completion date.
Design approvals aside, there is another reason not to rush luxury apartments onto the market: A plethora of units remain unsold at the first phase of Hudson Yards and other West Side buildings. “The issue is that the consumer feels the market is going to decline further,” Pierre E. Debbas, a managing partner at Romer Debbas, a real-estate law firm that has represented condo buyers in Hudson Yards, told the Times.
The second phase, dubbed the Western Yard, would span 6,220,000 square feet, and incorporate several residential towers, an office complex and a grade school, according to Related’s website.
Related and its partner Oxford Properties Group submitted plans in the summer of 2018 for a platform to be built over the rail yard. Without approval, the Western Yard development cannot proceed.
“We’re in the planning stages of Phase 2 and are currently focused on the Gateway tunnel, platform and the commercial building planned in the northeast corner,” a spokesperson for Related told The Real Deal. The company had no comment on when the phase would be done.
Luxury condo sales at 15 Hudson Yards have been sluggish, according to data from StreetEasy. Barely half of the 285 apartments, priced from $3.4 million for a one-bedroom to $32 million for a four-bedroom penthouse, have sold since the sales kicked off in 2016.
Office leasing at the development has been strong. Facebook recently signed a lease for $116 per square foot, or $6.6 million annually. And the glitzy retail space is filled with high-end stores. But even during the holiday shopping season, many of the glamorous shops at Hudson Yards were empty. Instead, people were lined up for the burger chain Shake Shack. Harrison Abramowitz, a director at Newmark Knight Frank’s retail division, told the Times that the “jury is still out” on the wisdom of filling Hudson Yards with luxury brands.
“We definitely shifted the gravity of the commercial district of Manhattan west,” Jay Cross, the president of Related Hudson Yards, told the newspaper. He noted that office tenants were paying rents well over $100 per square foot. Retail rents have risen steeply since 2012, when commercial rents in the undeveloped Hudson Yards area were just $31 per square foot, according to commercial real estate firm CBRE. [NYT] — Georgia Kromrei