QIA, Brookfield form JV on $8.6bn Manhattan project

Bloomberg/New YorkBrookfield Property Partners and the Qatar Investment Authority formed a joint venture on Manhattan West, an $8.6bn mixed-use project under construction on New York’s far west side.Plans for the 7mn-square-foot (650,000-square-meter) development call for five buildings, including a 62-story, 844-unit residential tower that’s already in progress and a 67-story office skyscraper that will be anchored by the law firm Skadden, Arps, Slate, Meagher & Flom and is scheduled for completion in 2019. The QIA will acquire a 44% stake in the project, the companies said in a statement on Wednesday.The deal expands the sovereign wealth fund’s global investments, which include acquisitions this year of London’s Canary Wharf Group and parent Songbird Estates, both in partnership with Brookfield. Investors from around the globe are gravitating to Manhattan real estate as a safe place to park cash, pushing prices to records. Office-building values in big cities such as New York are 56% higher than they were at the previous peak in 2008, according to Moody’s Investors Service and Real Capital Analytics Inc.“I don’t think anybody invests in New York real estate today expecting 20% or 30% returns,” Michael Cohen, tri-state regional president for brokerage Colliers International, said in a phone interview. “I’m sure that safety is a factor, but they’re also something of an early bird,” he said of the QIA, because development of the far west side is just beginning.Manhattan West is part of a wider effort to draw the Midtown business district farther toward the Hudson River, led by Related Co’s $20bn Hudson Yards development over the Metropolitan Transportation Authority train depot, immediately west of Brookfield’s project. Plans for the area, stretching from 28th Street to 43rd Street, include 26mn square feet of offices, 20,000 housing units, 2mn square feet of retail and 3mn square feet of hotel space, according to the Hudson Yards Development Corp website.Last month, the MTA opened a $2.4bn extension of the 7 subway line into the Hudson Yards area, a key part of the city’s commitment to the success of the area’s transformation.Brookfield said in April it would start building its 1 Manhattan West office tower after signing a lease with Skadden, Arps for 550,000 square feet - about a quarter of the skyscraper. That jump-started construction at the project, bounded by 31st and 33rd streets and Ninth and 10th avenues.