If you don't see images, click here to view
Story Ideas  Events 
 
To ensure delivery, please add newsletter@bisnow.com to your address book, learn how
Real Estate Bisnow
LegalReal EstateTechAssociationWomenMedicalThe Scene
   
January 13, 2009 
 
       
 
Monday Properties
 

BUILDING A CITY


 

If you think developing a building from the ground up is tough, try an entire city — half way around the world. U.S. and Korea-based developer Gale International's $35B, 100M-SF Songdo International Business District near Incheon, South Korea (in a JV with POSCO E&C) is moving along, with the first phase of the project set to open this August. We sat down with chairman Stan Gale in his Fifth Avenue office to learn the latest.

 

Using factors that work in other cities helped Songdo move along. Gale International and architect Kohn Pedersen Fox looked at Venice, Paris, Savannah, Vienna, Shanghai, Beijing, and New York for inspiration in areas such as street life and canal systems. Just look out of Stan's office window overlooking 59th and 5th and Central Park: "It's an integrating point, where hotels, retail, and office meet," he says. It influenced Songdo IBD's own Central Park and the buildings around it, as well as the walkable infrastructure.

 

Stan, discussing the project with EVP Charles Reid, says another strategy is an integrated-community approach rather than a building-by-building approach. In the past, developers focused on building iconic assets, he continues, but now it's about the people and accomplishing a fully functioning city.  Major portions of the city are under construction for the opening, including the 100-acre Central Park, residential towers, a subway, a 7.4-mile bridge connecting to Incheon's airport, the Convention Center Hotel, a Jack Nicklaus golf club, and International School. The Convention Center is already open, and the city should be complete by 2014.

 

Songdo IBD was recently named a winner of the first annual Sustainable Cities Award from the Urban Land Institute, the only project in Asia honored.  Over 120 of its buildings, including the Northeast Asia Trade Tower (pictured), are registered for LEED certification as part of a pilot U.S. Green Building Council LEED for Neighborhood Development project. Gale International is also busy working on Boston's One Franklin Street and Seaport Square projects, spearheaded by Stan's partner, CEO John Hynes III.


DISTRESSED IS THE NEW BLACK
 

The word du jour these days seems to be "distressed." Investors have become giddy about taking advantage of such opportunities since the credit crunch hit, Real Capital Analytics research guru Dan Fasulo told us when we visited his Fifth Avenue office. Funds began asking RCA about these assets, so its analyst team started flagging properties globally last fall for a new product offering. It discovered that distress is not only on the property level, but on the ownership level, so it split the assets into two buckets: troubled, when the owner or building has defaulted or is in danger; and potentially troubled, when the owner has immediate refi debt and may not meet obligations or a building may lose a major tenant. The asset is de-flagged if the owner gets out of the mess.

 

Dan with analysts (clockwise) Morris Cox, Doug Murphy, Ben Thypin, Natalie Hall, and Jessica Ruderman. In New York, overly aggressive owners from '07 find themselves with loans they can't finance, he tells us. The city has $3.5B worth of distressed assets, but the percentage of assets compared to the overall market is fewer than bust markets like Las Vegas and Phoenix. Most are office, notably Macklowe's former Bertelsmann Building and Worldwide Plaza. Development sites on the hit list include 303 East 51st, where the crane collapsed; Five Franklin Place in TriBeCa; and the Drake Hotel site at 56th and Park. Over 200 more assets and sites are on the watch list, which RCA will monitor continually in'09.

How is 2009 going to affect your business? Send story ideas to amanda@bisnow.com

 
 
Arent Fox
 
Monday Properties
 
Casa Noble
 
Leo A Daly
 
Advertise
 
 
CONTACT EDITORIAL                             CONTACT ADVERTISING                              CONTACT GENERAL INFO

This newsletter is a journalistic news source which accepts no payment for featured interviews. It is supported by conventional advertisers clearly identified in the right hand column. You have been selected to receive it either through prior contact or professional association. If you have received it in error, please accept our apologies and unsubscribe at bottom of the newsletter. ? 2008, Bisnow on Business, Inc., 1323 Connecticut Avenue, NW Washington, DC 20036. All rights reserved.

Real Estate Bisnow Sent Using iContact