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December 2009

December 2009 » Market Analysis » NYC Buildings For Sale

December 2009 New York Buildings For Sale

Manhattan Buildings sold

The Volkswagen Group of America has purchased the 265,000-square-foot Potamkin General Motors building at 798-804 11th Avenue between 55th and 56th streets. The space was purchased for $84 million with plans to renovate through a $41 million investment, and will be used as the flagship Manhattan dealership for Audi and Volkswagen.

The 24,700-square-foot retail space in the St. Regis New York was sold to a three-way partnership of property managers for $117 million. GFC Fifth Avenue is comprised of Crown Acquisitions, Goldman Properties and the Feil Organization, and they bought the property, located at 2 East 55th Street at Fifth Avenue, from Starwood Hotels & Resorts Worldwide. The space houses luxury retailers such as Bottega Veneta, Pucci and De Beers. GFC has six other retail properties along Fifth Avenue's Midtown corridor, including 666 Fifth Avenue and 590 Fifth Avenue.

SL Green Realty has purchased another leasehold position at the Graybar Building, the 31-story office and retail tower above Grand Central Terminal at 420 Lexington Avenue. The $7.6 million transaction is the second of its kind in recent months. SL Green, which handles the management and the leasing at the building, purchased W&M Properties' leasehold position in August, also for $7.6 million, and in September began to alter the building's ground-floor leases in order to simplify the ownership structure. SL Green's mortgage on the Graybar Building was due next year, but refinanced the loan.

Manhattan Retail Developments

Asking rates for storefront space fluctuated across the island. Some neighborhoods declined, correcting from all-time high rates, while others fared better. The borough's most high-end shopping neighborhoods are holding on, even in the rough economy, with strong numbers. Overall average asking rents for Manhattan retail space dropped 9 percent to $117 per square foot. The Fifth Avenue shopping area between 49th and 59th streets saw average asking rents for ground-floor retail space at $2,050 per square foot this fall, up 46 percent from fall 2008, while asking rates in the Meatpacking District went up 23 percent to $375 per square foot, and Soho rates jumped 12 percent to $483 per square foot. Other key shopping regions, including Times Square and Seventh Avenue between 42nd and 47th streets, saw moderate year-over-year increases in their average asking rents for autumn this year as well.

The streets from 57th to 72nd Street on Madison Avenue have suffered an uncharacteristic glut of vacancies. Madison Avenue has suffered the steepest rent drops of any major Manhattan retail district, average asking rent plunged 41 percent, to $770 per square foot, in the third quarter of 2009 from the fourth quarter of 2008. Asking rents on Madison Avenue have actually plummeted even lower to as low as $500 per square foot, while vacancies remain high.

A number of regional, national and international retailers are to open its first outposts in New York City. Costco, the largest membership warehouse club in the world, opened its first location in Manhattan in the 500,000-square-foot East River Plaza. Target will open its first Manhattan store in the same plaza next year. Best Buy, Marshalls and New York City's first Bob's Discount Furniture will join them.

Many pop-up shops find that a pop-up status can be a good first step toward permanent residency in New York City. One-time pop-uppers, like Kai D. menswear store at 75 Orchard Street are signing long-term leases after their short-term occupancies run out. The strategy is also working for desperate landlords, who eagerly sign-on the temporary shops when tenants are hard to come by.

The famous 1990s nightclub Limelight is getting a rebirth as a retail experiment and it's proving successful, with 75 percent of the available 60 shop spaces leased. Retailers are Caswell Massey, America's oldest retailer and Hunter Boots, a 150-year-old firm. Newcomers include Mari's New York, a brownie business; It's Sugar, a candy store, Carter & Cavero Old World Olive Oil, and Silly Souls, a baby goods store. They're also negotiating to bring in three restaurants.

New York City Buildings Sold:

  • 452 Fifth Avenue, a 29-story, 865,000 SF office building, was sold to Midtown Equities; IDB Group for $330 million.
  • 318 East 48th Street, a 5-story, 40,000 SF garage building, was sold to The Government of the Republic of Singapore for $29.5 million.
  • 550 West 17th Street, 528 West 162nd Street and 284 Audubon Avenue, 3 garages, 425 spaces total, was sold to ABS Partners Real Estate for $10.5 million.
  • 330 East 38th Street (The Corinthian), 186-space garage, was sold to Alliance Parking for $10.28 million.
  • 150 and 152 East 23rd Street, 2 office buildings, 20,646 SF total, was sold for $9.5 million.
  • 633 Third Avenue, a Commercial condo, was sold to The Permanent Mission of Afghanistan to the United Nations for $5.4 million.
  • 79 Mott Street, 11,275 SF mixed-use building, was sold for $5.2 million.
  • 51 and 53 West 19th Street, Two 5-story mixed-use buildings, was sold to for $5 million.
  • 599 Broadway, 10,000 SF commercial condo, 5th floor, was sold to Infusion Development LLC for $4.5 million.
  • 599 Broadway, 10,000 SF commercial condo, 4th floor, was sold to MKG Productions for $4.2 million.
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