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Thread: Chelsea Arts Tower - 545 West 25th St - Commercial Condo -by Kossar & Garry

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    Default Chelsea Arts Tower - 545 West 25th St - Commercial Condo -by Kossar & Garry

    Here's a project currently u/c I think should have its own thread.
    It is interestingly different from other buildings, not for its architecture but for being one of the rare "commercial condos."



    Opportunities of owning the office
    Buildings like new Chelsea Arts Tower are stoking debate over leasing vs. buying workspace

    By Stuart W. Elliott

    Chelsea Arts Tower Offices for sale rather than lease are rare in the city, but commercial brokers say they are fielding more calls from small business owners about purchasing their workspace.

    Their thinking might go something like this: Everyone they know has seen the value of their home skyrocket by tens of thousands or even hundreds of thousands of dollars, so why not own one's office space and reap the same benefits? Commercial leasing brokers say buying offices can have benefits, but there are also potential drawbacks.

    The major drawback, say brokers, is that a business can't expand or contract easily in space that it owns outright. Brokers say that purchasing office space on the ninth floor of a building locks a business in. When someone else buys on the eighth and 10th floors and that business needs to expand, there's a real problem.

    While ownership sounds appealing to some, market observers are quick to point out there's limited inventory, with most individual Manhattan offices to be found in Midtown, Downtown in Soho, Harlem, and in the Flatiron district. There are even fewer in the outer boroughs.

    Where there's demand, though, brokers can find some supply. Two brokers are selling office space in a new 20-story glass and concrete tower set to rise on West 25th Street in Manhattan. The building, called Chelsea Arts Tower, will house art galleries on its bottom eight floors and office tenants on its upper floors.

    "We came up with the concept because we've been active in the neighborhood for a long time, and five times a week, we got calls from people asking, 'can I buy office space?'" says Stuart Siegel of Grubb & Ellis, who brokered the land deal and is marketing the building along with colleague Alan Weisman. "With the hot real estate market, the calls have increased exponentially."

    The rare commercial condo project is being targeting to companies that expect to stay the same size in the long term, Siegel says. "A company that has a fairly stable number of employees and sales volume is a good candidate."

    Floor sizes in the building range from 3,100 to 4,700 square feet, with asking prices from $700 to $1,000 a square foot, or anywhere from $2.2 to $4.7 million. The annual costs connected with buying in Chelsea Arts Tower (including mortgage payments, taxes and common area charges) will likely be somewhat higher than renting in the area, but not by a huge amount. Average annual rents are $35 to $40 per square foot in that part of Chelsea, while costs would be around $45 to $55 a square foot for purchasing, Siegel says. Siegel says nonprofit foundations have expressed interest in buying, in addition to film production, fashion, and media companies.

    "Nonprofit foundations are some of the best candidates for this kind of space," he says, adding that nonprofits don't have to pay real estate taxes.

    Other pros of buying office space include fixed costs through the ability to lock in a given mortgage rate compared to the unpredictability of rent increases, and tax deductions in the form of mortgage interest and property taxes. There is also the possibility of renting out extra office space, and, of course, the prospect of property appreciation. But there are still the upfront costs of buying versus renting, which means less working capital to operate one's business.

    Despite concern about buying at the market's height, Siegel says most buyers looking at Chelsea Arts Tower are taking the long view.

    "They are looking at a 20-year horizon," he says. "They realize that [West Chelsea] is still in its infancy."


    http://www.therealdeal.net/issues/SE...1125417190.php

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    Here's a photo by sfenn1117 revealing a partial view of the Chelsea Arts Tower under construction (left of center, w/ orange netting).


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    Commercial condos: the next big thing?

    * * *

    Off topic, but there are two handsome modernist buildings in the foreground of that photo. Can someone identify them and their architect(s)?

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    Disgruntled Optimist lofter1's Avatar
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    The smaller one on the corner is Jim Kempner Fine Art at 501 W. 23rd St.:

    http://www.artnet.com/Galleries/Abou...www.artnet.com

    Photo: http://www.artnet.com/getaboutpic.as...592/201921.jpg

    Jim Kempner Fine Art
    501 West 23rd Street
    New York, New York 10011 USA
    Tel: (212) 206-6872
    Fax: (212) 206-6873
    Tues.-Sat. 10am-6pm
    Director: Jim Kempner

    Jim Kempner Fine Art specializes in contemporary prints and works on paper with an emphasis on American Masters. The inventory appeals to both the established as well as the beginning collector.

    After dealing privately for 10 years, the gallery opened in September 1994. In 1997, Jim Kempner Fine Art moved to its present location, a beautiful new space in Chelsea designed by architects Smith and Thompson. Recent exhibitions at the gallery have included Robert Rauschenberg Prints from the 60's through the 90's, Robert Motherwell Prints, Howard Hodgkin Hand-colored Lithographs from the 60's through the 90's, Jennifer Bartlett Prints and Drawings, and Changing Faces/Contemporary Portraiture, which included paintings, prints, drawings and photographs by such artists as Chuck Close, John Currin, Lucian Freud, Nan Goldin, Jane Hammond, David Hockney, Robert Mapplethorpe, Elizabeth Peyton, William Kentridge and others.

    The inventory also includes work by Jasper Johns, Roy Lichtenstein, James Rosenquist, Andy Warhol, Richard Diebenkorn, Sam Francis, Helen Frankenthaler, Sol Lewitt, Ellsworth Kelly, Kiki Smith, Pat Steir, Wayne Thiebaud, Kara Walker and Terry Winters, Ross Bleckner, Christo, and Donald Judd. Jim Kempner has also published several editions, including Ahava by Robert Indiana and a recent series of monoprints by Charlie Hewitt.

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    Disgruntled Optimist lofter1's Avatar
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    The taller one is Vesta 24.

    Go here for more: http://www.wirednewyork.com/forum/showthread.php?t=5532

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    So that's what the other building is...should be good.

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    That whole block makes a very attractive ensemble. Notice how the small modernist foreground building takes the jaggedy skyline of the block and rotates it 90 degrees into the plane of the elevation, making the whole block all-of-a-piece. Don't know if that was intentional, but it sure is pleasing.

    Lots to learn here.

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    Disgruntled Optimist lofter1's Avatar
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    Before the Kempner building went up in the early 90s that corner was a garden center -- not many of those left downtown .

    The whole area was still no man's land back then and Kempner had a lot of foresight to build there. The building is really terrific.

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    Published: Tuesday, May 23, 2006

    MORE SPACE: Calvin Klein has another set of new digs. The 64-year-old designer just bought into the Chelsea Arts Tower, the 20-story office development at 545 West 25th Street, a source said. The building, which is entirely commercial condominiums located in the heart of the Chelsea galleries, is the tallest building in the area at 280 feet (and it will stay that way, since the neighborhood has just been rezoned with a height restriction of 135 feet). Klein, said the source, nabbed the 18th floor, where spaces sold for prices north of $4 million.

    The building, which is being developed as a joint venture between Jack Guttman and Young Woo Associates, is the work of three architects: Alan Garry of Kossar & Garry is the architect of record, while art world favorite Richard Gluckman of Gluckman Maynor Architects is responsible for the lobby and HOK designed the facade.

    Klein's neighbors will include the Marlborough Gallery, which will move into the first two floors, while collectors Adam Lindemann and Glenn Furman took three floors between them. They are expected to close their deals and begin interior work in September, with an eye to opening early next year.

    The condominiums, which are sold solely as entire floors, range from 4,140 square feet on the lower levels, to 3,540 square feet after the first setback, to 3,100 square feet, which is the size Klein selected. While smaller, his office boasts a terrace. Six floors still remain for prospective buyers, with prices ranging from $2.8 million to $3.1 million.

    When reached for comment, Stuart Siegel of Grubb & Ellis, the exclusive broker for the tower, explained the building was designed specifically with galleries in mind. "We got a focus group of galleries together to find out what was important to them. We knew that galleries and collectors wanted to own their own space, but it had become too expensive to build a small building. There's nothing else in Chelsea like this."

    A topping-off party for the building will be held tonight at Cheim & Read Gallery also the work of Gluckman, so guests can see what's coming on 25th Street.

    WWD.com 2005 Fairchild Internet, Inc. All Rights Reserved.

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    I spent the afternoon gallery hopping in Chelsea and discvered that they've begun installing black paneling on the painted portions of this tower. I shoulda known that they wouldn't have just painted the concrete black, but after all this is New York.

    The effect looks great, I cannot wait to see it when complete! If you've seen the facade to Morimoto on 10th Ave, it is almost exactly similiar, except of course verticle these are verticle.

    With this, the tower went from bland and cheesey to elegent and sleazy (but in a good way, if that makes sense). I really should invest in a digital camera...

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    Condos, Not Garrets, in West Chelsea

    By C. J. HUGHES

    Published: June 21, 2006

    It is a familiar big-city pattern, real estate professionals and artists say: Low rents draw artists to a fringe area, and galleries follow. Then other residents, drawn by the hip ambience, show up as well. Later, restaurants and retailers, seeing the potential, want to move in. Demand for space grows and rents climb. The artists, priced out, eventually leave for cheaper areas and their galleries go with them.

    In West Chelsea, Manhattan's current booming art district, a developer has taken an unusual step that may help to prevent this pattern from playing out again.

    The project, the Chelsea Arts Tower, is a commercial condominium, as opposed to the much more common rental building. The theory is that galleries and other arts-related businesses can protect themselves against rising rents by buying a unit, perhaps benefiting from escalating property values instead of being victimized by them.

    In a neighborhood like West Chelsea, which is soon to experience a rash of new residential and commercial construction tied into the redevelopment of the High Line, an elevated former railroad track, ownership of space may prove especially important.

    At least, that is the bet being wagered by Bass Associates, the developer of the 20-story tower.

    Located at 545 West 25th Street, between 10th and 11th Avenues, the site of a former parking lot, the $60 million development features full-floor units of 3,100 to 4,700 square feet, with thick concrete columns and floors. Buyers will build their own interiors.

    "We built the Chelsea Arts Tower because the demand for the product is there," said Jack Guttman of the Chelsea Development Group, a partner in Bass Associates. "We wanted to create a landmark property in a great location, and we wanted it to be a draw for the arts community. The site was perfect for this particular design."

    So far, the bet by Bass seems to be paying off. Fourteen of the 20 floors have been sold, with some buyers taking multiple floors. Prices per floor are $700 to $1,200 a square foot, depending on how high a floor is (and therefore how good the view is); this works out to $2.87 million to $4 million a floor, according to Stuart Siegel, a managing director in the New York office of Grubb & Ellis, a real estate brokerage firm, which has represented Bass through all stages of the development process.

    The building, which will be clad in gray and black metallic-looking panels of Trespa, a hard plastic composite made in the Netherlands, already dwarfs its low-slung neighbors, though it will not be finished until August.

    To maximize light and views, each unit has floor-to-ceiling windows on three sides, and seven floors have terraces.

    The lobby will be designed by Richard Gluckman, whose New York credits include work on the Whitney Museum and the Dia Center for the Arts. This area will be staffed by a concierge, who will perform a variety of services like signing for packages, receiving visitors and calling for car services.

    The developer is also promising tight security, including surveillance cameras and locking elevators, to keep the works of art safe.

    "Security is one of the first questions that buyers ask about," Mr. Siegel said.

    One unusual step taken by the developer was to convene five focus groups of gallery owners to figure out what it would take to get them to buy in a commercial condo. The answers produced some changes in the preliminary plans. For instance, the original plan called for only two elevators, but the gallery owners warned about the long waits that can occur on opening nights, so a third elevator was added.

    In addition, the ceiling height was increased to 11 feet from 9 feet to accommodate lager installations, and the developers learned that zoned temperature controls were desirable, so the air-conditioning could be controlled on each floor, whatever the season.

    The use of focus groups is "a very good approach to the process when you're doing something new," Mr. Guttman said.

    He is the principal of Chelsea Development, which is based in Manhattan. It represents one-half of Bass Associates, which was created for the purpose of building this project. The other half is Young Woo & Associates, another developer with headquarters in Manhattan.

    Among the tenants are established galleries and some individuals, and businesses that are buying office space. Marlborough Gallery a focus group participant will keep its West 57th Street gallery but move its second gallery operations from 211 West 19th Street to the tower's second floor and ground floor, which will have rollback glass doors for moving very large pieces into the gallery.

    Another gallery is Tina Kim Fine Art, which has purchased the third floor. Jaime Schwartz, a sales assistant at the gallery, said the move would allow the firm to double its floor space, to 4,300 square feet, from about 2,000 at its current location at 41 West 57th Street, as well as help it attain a higher profile in the industry. "We're hoping that the new building will generate some curiosity in itself," Ms. Schwartz said.

    Other tenants include Calvin Klein, who bought the 18th floor, and Glenn Fuhrmann, a money manager, who purchased the 9th and 10th floors.

    In addition, Adam Lindemann, a board member of the Public Art Fund, a nonprofit group that sets up art around the city, has purchased the 17th floor, though he says it is to set up a New York office for Ikepod, a watch design company, in which he is a partner.

    "It will be a good place to go to get creative thinking done," he said.

    Condos are not popular with most retail businesses, in part because ownership limits their ability to expand into larger spaces if they are successful, according to Brian Gell, a vice chairman with CB Richard Ellis who specializes in commercial leasing in Manhattan.

    Buying a commercial condo also requires a large upfront payment and that can be difficult for a start-up business, he said.

    Still, a few commercial condos do exist in the city, like Delmonico Plaza at 55 East 59th Street, 420 Fifth Avenue and 830 Third Avenue. Among commercial properties that have recently been converted into condos are 14 Wall Street and 125 Maiden Lane.

    Copyright 2006 The New York Times Company

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    Default Here are more recent pics


    curb.com



    curb.com

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    Disgruntled Optimist lofter1's Avatar
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    Chelsea Arts Tower is almost complete -- some recent pics ...

    From Chelsea Park:



    From 10th Avenue:



    From 25th Street:





    The north and west facades from 26th Street:


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    Don't understand the blankwall on the eastern face (maybe for structural purposes?).

    It's not like someone's going to come along and build an equally tall tower next to them.

    The area's been downzoned.

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