Property Grunt

Monday, June 23, 2008

Vornado getting cold feet?

Back in December 7, 2006, it was reported that the Vornado Realty Trust was to make headway with their new development in Harlem.

Construction on the joint venture project headed by Vornado Realty Trust is scheduled to begin in April. It involves a mixed-use Class A office and retail center in East Harlem. The Vornado real estate portfolio in New York City comprises 18.3 million square feet of office space in 42 office buildings.

Here is the before.

Now the after

As you can see, other then the site being secured, there is no developmental activity. There isn't even a port a potty. And we are already in late June.

I have four theories of why no action as been taken.

1. They are experiencing delays which is normal is for construction.

2. There is no money. With the credit markets imploding and lending standards tightening, it is probably very difficult for even a company like Vornado to secure funding for a project.

3. From fuel to raw materials, the costs of this project have probably skyrocketed. so right now Vornado's operating expenses consists of paying the property taxes while they wait to see the market settle.

4. Vornado might considering selling off the site to another party so they are not bothering in initiating any type of construction.

5. Or the most obvious reason, they still haven't resolved the zoning issue.

Regardless of what it maybe, I would be surprised to see anything done this year.