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March 2013

March 2013 » Market Analysis » NYC Buildings For Sale

March 2013 New York Buildings For Sale

NYC Buildings For Sale

The nearly 41,600-square-foot Colonial Revival U.S. Post Office location at 217 West 18th Street between Seventh and Eighth avenues is for sale.

The SUNY board of trustees voted to close the Cobble Hill-based Long Island College Hospital. The sale of the 200,000-square-foot building, which could be converted into a residential development, may bring up to $500 million.

Lehman Brothers is looking to sell its 90 percent stake in 425 Park Avenue. The 31-story, 567,340-square-foot building, located in Midtown East, is to be demolished and replaced with a 650,000-square-foot Norman Foster-designed office tower being developed by L&L Holdings, which owns the remaining 10 percent stake in the current building.

Thor Equities has put 530 Broadway, an office and retail building it owns in SoHo, for sale. The 11-story, 40,000-square-foot property could trade for more than $300 million, or $7,500-per-SF. Asking rents for prime Soho space, such as on Broadway, Prince and Spring streets, have hit $800 per square foot, the highest ever rates that landlords have sought in the neighborhood.

The owners of Times Square’s Milford Plaza Hotel are thinking about dividing the property into three pieces and selling them separately for a larger profit. Real estate investment group Rockpoint and Highgate Hotels would like to see separate sales from the Eighth Avenue site: the land, the 1,300-room hotel and the retail space.

Before Hurricane Sandy, few considered which power gird are they on. Now after Hurricane Sandy that has changed, it is now a factor including size budge and location.

Pier 1 in Brooklyn Bridge Park plan to raise their 550,000-square-foot complex at least 3 feet to protect it from the kind of flood damage that Hurricane Sandy did to the neighborhood. The project is being developed by Toll Brothers and Starwood Capital Group.

New York City developers made a dash to secure property sites in 2012, and with prices continually inching upwards, had little option but to build luxury condos. Therefore, few rentals were built leaving renters and those needing affordable housing out in the cold.

Thor Equities has sued the owner of a Soho mixed-use building, alleging that by selling the building to SL Green Realty, the owner violated an exclusive agreement with Thor. The suit alleges that Thor was in exclusive agreement with Willspring Holdings to purchase the 68,342-square-foot office and retail building, located at 131-137 Spring Street. In December, however, Willspring agreed to sell the building to a partnership of SL Green and frequent collaborator Jeff Sutton for $122 million.

Vornado Realty Trust said that it had completed a $390-million financing of its retail condominium at 666 Fifth Ave., which it recently acquired for $707 million.

Firmdale Hotels, the London-based company headed by the Kemps, has signed a land lease for West 56th Street. The site, a collection of lots owned by the estate of real estate investor Sol Goldman, can support a hotel up to 120,000 square feet.

Harlem’s Victoria Theater is getting a makeover. The building on 125th Street, designated a city landmark in 1993, will be transformed into a mix of hotel rooms, residences and retail space. Developers Exact Capital and Danforth Development Partners have tapped architects Aufgang & Subotovsky to design the project; construction is scheduled to start in the fourth quarter.

Andrew Penson, the owner of Grand Central Terminal, has teamed up with the group of Empire State Building investors seeking to block the settlement of a class-action suit against Malkin Holdings for their plan to include the iconic building in a public real estate investment trust. Penson has filed two affidavits in support of the group, which say the IPO would cause harm to the roughly 2,800 building co-investors.

Four new sections of the $165 million East River Waterfront Esplanade will be ready for summer. Scheduled for April openings are the glass-walled Maiden Lane pavilion, under the FDR Drive at Maiden Lane and South Street; a hunk of riverfront pathway; and two pavilions on Pier 15.

A new luxury hotel and condo tower at the Brooklyn Bridge Park will likely not be built or run by union workers. The developers selected for the controversial Pier 1 complex--Toll Brothers City Living and Starwood Capital Group are not using union workers. At stake are an estimated 210 permanent jobs and 300 construction jobs at the waterfront park. This is a luxury hotel on prime public land. Last year, there were seven bids for the project from different developers. Five of those proposals would likely have included using union workers.

Long Island City’s Court Square may be having a residential boom, but the area still suffers from a lack of retail development. More than 3,500 residential units are set to rise in the area over the next five years, and housing prices have shot up by nearly 30 percent in the last three years. The neighborhood still lacks basic residential amenities: such as pharmacies, grocery stores and retail stores.

More than three months after Hurricane Sandy flooded Manhattan’s financial district, forcing the closure of about a quarter of its offices, all but a few of those buildings have come back to life, defying predictions of a drawn-out recovery. Getting those buildings up and running has required major, and costly, repair work. And some landlords are spending even more money to fortify their high-rises against future storms and keep tenants from decamping for other business districts, running up repair and renovation bills of as much as $50 million a building. So far, few tenants appear to have left, and new ones are actually moving in.

RXR Realty will need to charge at least 80/RSF to make money at 75 Rockefeller Plaza. The problem is in the fourth quarter of 2012, the average office rent in the Rockefeller Center area was $71.26 per square foot. RXR, committed to lease the entire building for a 99-year term at an estimated cost of $250 million, has also planned a $250 million gut renovation of the property.

New York Buildings sold

A joint venture between Jared Kushner and an international investor has closed on a portfolio of 17 walk-up apartment buildings in Downtown Manhattan for a total of about $130 million. The buildings are located between East 2nd and East 13th streets, First Avenue and Avenue B, in the East Village.

Stephen Meringoff and Leslie Himmel sold 158 West 27th Street to Emmes Asset Management for $57.5 million. Meringoff and Himmel acquired the building in 2010 by assuming the building’s distressed debt and forcing a takeover.

Joseph Chetrit and David Bistricer have just closed on the 46-story, 289-room Flatotel property at 135 West 52nd Street for $180 million. A conversion into high-end residential condominiums is being planned, which had been recently foreclosed upon by a Rockpoint Group, Atlas Capital Group and Procaccianti Group venture.

The 203-room Alex Hotel, located at 205 East 45th Street, has sold to an affiliate of the Wyndham Hotel Group for $115 million. The sale comes on the heels of the $180 million purchase of the Flatotel by Joseph Chetrit and David Bistricer. Both properties were owned by a joint venture between Rockpoint Group, Atlas Capital Group and the Procaccianti Group.

The Kushner Companies signed a contract to buy seven walk-up rental buildings in the East Village for $49 million from developer Ben Shaoul’s Magnum Real Estate Group and Meadow Partners. The seven buildings have a total of 115 apartments and one store. Among the residential units, 28 are rent- stabilized and the rest are free market.

Area Property Partners has sold for almost $18.2 million 730 Riverside Drive between West 150th and West 151st streets, to an LLC identified as 730 Riverside Drive.

Real estate investor Ruby Schron paid $25 million to buy a 49,000-square-foot building at 532 Neptune Avenue near Coney Island. Schron plans on tearing down a fence on the edge of the property and combining his latest acquisition with the adjacent Trump Village Shopping Center, which he has owned since the early 2000s.

Two Trees Management has sold the 162 condominium units at Mercedes House to Invesco Real Estate for $170 million. The 1.3 million-square-foot, 874-unit building on West 53rd Street at 11th Avenue was built in two phases; the first 16-story, 222 rental unit phase hit the market in April 2011, while the 490 units in the second phase that began renting last year are now close to 80 percent leased. The second phase also contained high-end condominiums.

Stonehenge Partners and Invesco Real Estate have sold the Brill Building at 1619 Broadway for $185 million to Eric Hadar and Merchants Hospitality. The deal, which included 30,000 square feet of air- rights and, eight new signs for roughly 5,000 square feet of advertising space were recently approved, and will bring in about $2 million per year in revenue.

RXR Realty is buying 237 Park Avenue for around $800 million. In partnership with Walton Street Capital, RXR bought the 21-story, 1.2 million-square-foot building, located between East 46th and East 47th Streets, from Lehman Brothers Holdings, which had previously foreclosed on the troubled asset and recovered it from Broadway Partners.

Jared Kushner paid $28.8 million portfolio of 55 apartment and five retail properties in two in-contract deals. The properties were purchased from Icon Realty Management’s Terrence Lowenberg and Todd Cohen, and include 325 East 10th Street on Tompkins Square Park, as well as the nearby 329, 331, 333 and 335 East 9th Street.

Wharton Properties President Jeff Sutton has added the Roxy Deli building at 1565 Broadway to his retail portfolio, in a $30 million deal. The four-story, 21-foot wide by roughly 70-foot deep property — which is almost completely covered with valuable signage — is opposite Times Square’s iconic ruby red staircase that shelters TKTS.

Gary Barnett’s Extell Development paid $8.63 million for a mixed-use building at 1685 Third Avenue to landlord Ogrin Associates, on the same day that Extell sold Ogrin a property at 1570 Second Avenue for less than half the purchase price. The deal appears to be part of a larger move by Extell to acquire, and possibly develop, the stretch of Third Avenue between East 94th and East 95th streets. [

Area Property Partners has sold a portfolio of 10 Upper Manhattan multi-family properties known as the Decathlon portfolio for $49 million, or about $7.5 million less than the firm paid for the collection of buildings in 2007.

The city has reached out to developers for proposals to build high-rise towers at the site of two schools on the Upper West Side and one in Harlem, including P.S. 199. The schools, P.S. 199 Jessie Isador Straus located at 270 West 70th Street, P.S. 191 Amsterdam located at 210 West 61st Street and the School of Cooperative Technical Education located at 321 East 96th Street could be demolished as early as 2015.

The Elad Group has selected Eran Chen of ODA Architecture to complete the development, known as Franklin Place. The building is located at 371 Broadway, a section of Broadway that is not landmarked, meaning that the new development can stand up to 20 stories, which is enough for 53 condominium units.

Starwood Property Trust is nearing the final steps of issuing a $450 million construction loan to the Related Companies for the first phase of the Hudson Yards development. The loan is slated to close in the next 30 days.

Madison Square Garden’s special permit to operate as an arena with more than 2,500 seats expired in January. Community Board 5 recommended that any permit renewal be denied unless the facility can meet certain requirements.

Developer Second Development Services is gearing up to bring a 200-room hotel tower to the vicinity of the Brooklyn Academy of Music. The full-service hotel, which will be located at 95 Rockwell Place, is expected to be complete within two years. Second Development has commissioned Thomas Leeser to design the project.

The Related Companies has received two construction loans totaling $390 million. One loan will be used to fund the expansion of the Gateway Center mall in East New York, Brooklyn and the other will fund the construction of a Queen’s affordable housing development. Bank of America, along with PNC Bank and Sovereign Bank, will lend $225 million for the Brooklyn project. The construction will add 600,000 square feet to the existing 900,000-square-foot structure.

The city’s big developers are eager to get moving on projects in the Seward Park Urban Renewal Area.
Over 300 people, including representatives from top-tier developers such as Forest City Ratner, Related Companies and Douglaston Development, attended an information session.

Mayoral candidate Christine Quinn’s affordable housing plan was bound to face criticism given that her plan features a tax subsidy twice proposed and rejected by the Bloomberg administration as unacceptably generous to the real estate industry. The real estate industry have been some of Quinn’s biggest campaign donors.

Plans to expand the U.S. Tennis Association’s National Tennis Center in Kew Gardens paced at the Community Board 9 meeting. The $500 million renovation proposal for the U.S. Open home garnered support from union workers, industry insiders and tennis fans after meeting opposition at the previous community board discussion.

The site, located at 39-53 Jay Street, currently holds a three-story, 80,000-square-foot manufacturing property. This site has the largest footprint in Vinegar Hill. The ability to offer big box retail could change the landscape.

The saga of Santiago Calatrava’s World Trade Center PATH hub continues. What started out as a $2 billion project expected to take four years to build has now become a $3.8 billion, six-year undertaking. It is unclear exactly what is driving the costs and the timeline issues.
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