Time Warner Case

3069 Words13 Pages
Time Warner Center: Mixed-use Development Case Study Time Warner Center: Mixed-use Development Case Study 1. What form of investment vehicle did Stephen Ross/ Related Companies (SRD) employ for this development? Briefly discuss its merits and set up their cash flows (inflows and outflows) from the project to the parties. In a market defined by properties developed for single use purposes, SRD employed the development of a large-scale mixed-use development project in Manhattan Ney York. This type of facility has historically shown to be high-risk in most urban development centers. To this point mixed use developments with retail located on upper floors have largely failed in urban development with the exception of Chicago’s Water Tower Place. The design was to be composed of four property types namely: hotel, office, residential, and retail, plus a cultural theater. This composition of property types was thought to be sustainable due to the properties relative location in heart of the densely developed section of Manhattan’s Columbus Circle, facing central park and Broadway. Feasibility of the project was also supported by an upturn in residential property market. The entrepreneurial endeavors in this case were deeper than the financial incentives, Ross was quoted that this was perhaps the last site that have “grand potential....., building’s that would define New York City.” With a 2.1 million sf. Of buildable FAR, the center would have more usable space than the Empire State Building. SRD relied heavily on its Joint Venture with Apollo Real Estate Advisors. Apollo would provide inflows of $255M in equity. Additional inflows would be provided through Time Warner’s equity commitment of $56M in the sale of office space a cost plus a development fee. The Mandarin Oriental Hotelier provided a $49M in equity necessary to build the hotel space. Lastly

More about Time Warner Case

Open Document