Bryant Park and Times Square Draw Investment Interest
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Suddenly, the neighborhood around Bryant Park and Times Square is gaining in popularity as a place to live. Investors from around the world are vying to own property in the area. Belfonti Capital Partners is at the forefront of the residential condominium trend in the Bryant Park area with the opening early next year of a sales office at 485 Fifth Ave., a former office building that once served as the Rogers Peet building. The tower was acquired in August by Belfonti and the Carlyle Group of Washington, D.C. The partnership paid $88 million to another partnership, headed by investor Jack Forgash, who paid $54 million earlier in the year.The new owners are adding four floors to the 95-year-old, 185,000-square-foot building and converting the property into 104 luxury residences.The price per square foot is expected to average $1,500.
Last week, Mermel & McLain Management and ASB Capital closed on the purchase of the 20-story, 173,108-square-foot office tower at 104 W. 40th St., across from Bryant Park, on the west side of the Avenue of the Americas. They purchased the tower, known as the Springs Mill Building, from RFR Realty. According to industry sources, the new owners plan to renovate the tower, build an additional 70,000 square feet, and convert the tower into residential condos. Earlier this year, ASB provided about $165 million in funding to Clarrett Capital for a new 54-story, 139-unit luxury condo building, the Sky House, at 11 E. 29th St., near Madison Square Park. Next week, RFR Realty is meeting with the Landmarks Preservation Commission to gain approval for the transfer of air rights from the Seagram Building at 375 Park Ave. to 610 Lexington Ave., the former home of the YWCA, which it acquired earlier this year. RFR plans to erect a tower that will house a hotel (14 floors), residential condominiums (44 floors), and ground-floor retail.
The principal of the Moinian Organization, Joseph Moinian, is one of New York’s most active investors. In May 2004, a joint venture of the Moinian Group, the Chetrit Group, and Edward J. Minskoff paid about $121 million, or $316 a square foot, for the 42-story, 382,000-square-foot office tower at 1450 Broadway and West 41st Street. They purchased the property from Murray Hill Properties and its partner, ING Real Estate Partners, which had acquired the property for $94.4 million in 2001 from Orix Real Estate Equities. Last week, it was announced that the owners plan to convert the top floors of the tower into residential condos. Last week, a partnership of the Chetrit Group, Bonjour Capital – whose principals include Charles Dayan and Colby Marcos – and Yair Levy entered a contract to buy 620 Avenue of the Americas, an office and retail building with additional development rights in the Chelsea district. They are paying about $280 million to the German fund manager Jamestown. Retail tenants in the building include Bed Bath & Beyond, T.J. Maxx, and Filene’s Basement. The new owner will have the opportunity to build about 200,000 square feet of residential condos on top of the building.
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Last December, S.L. Green Realty sold the 288,000-square-foot office building at 1466 Broadway, also known as 6 Times Square, for $160 million, or $536 a square foot, to a partnership of Sitt Asset Management and Steven Sutton. The property, at the corner of West 42nd Street and Broadway, was formerly the Knickerbocker Hotel, which was renovated into showrooms and offices in 1982. At the time of the purchase, the new owners indicated they had an interest in converting the top floors into a hotel or luxury condos.
In October, Equity Office Properties Trust closed on its $505 million purchase of the 41-story Verizon Building at 1095 Avenue of the Americas. About 200,000 square feet of the building was retained by Verizon as a condominium interest. A number of prospective buyers who were interested in the building had planned to convert the top of the tower into residential condominiums. Equity Office might eventually sell the top of the tower to a residential developer – possibly Equity Residential, a real estate investment trust controlled by Sam Zell – who might also convert the property into condos.
Later this year, the first and largest Residence Inn by Marriott in New York City, a 357-suite extended-stay hotel, will open at 1033 Avenue of the Americas and West 39th Street. The hotel will occupy 35 of the 45 floors of the Bryant Park Tower, a luxury condo building being marketed by G. Holdings. Originally, the developer had planned to build a total of 94 residential rental units. The retail area on the Avenue of the Americas will house about 8,500 square feet of space. The second floor will house a public garage, with the hotel’s restaurant, meeting rooms, and ballroom on the third floors. According to industry sources, more than 65% of the units were sold in the first four days on the market, with prices for many units exceeding $1,300 a square foot.
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Next year, the first buyers will move into the Orion, a residential condominium development of Extell Investment Management and the Carlyle Group. The 58-story, 551-unit luxury condo building is at 350 W. 42nd St., between Eighth and Ninth avenues. At the end of October, about 474 units, or 86% of the units, had been sold, with average prices exceeding $1,000 a square foot. Residential rental apartments were originally planned for the lower 28 floors of the tower and condominiums for the top tower. Due to the strong demand, the plans were changed to include all residential condominiums. Last month, Extell and Carlyle purchased three residential rental apartment buildings, retail space, and 14.3 acres of underdeveloped land on the West Side for $1.76 billion from Hudson Waterfront Associates. Subsequently, they sold the three residential buildings to Equity Residential for about $809 million, or $605,000 an apartment.
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Last December, a joint venture of Twining Properties, the Related Companies, and MacFarlane Partners purchased a site at 440 W. 42nd St. between Dyer and 10th avenues. The developers are planning a 60-story residential tower with more than 600 luxury apartments. The project will occupy an entire city block and include two retail levels, underground parking, rental apartments, and condominiums. Construction is scheduled to commence in fall 2006.
MacFarlane Partners is the leading minority-owned real estate investment management manager and developer of urban real estate and single-family housing in the country. They are 49% minority partners with the Related Companies and Apollo Real Estate Advisors in the Time Warner Center. Mac-Farlane Partners invested in Time 1221 617 1324 628Warner Center as part of its joint venture with the California Public Employees’ Retirement System. A joint venture of MacFarlane Partners and the Moinian Group is developing a 1.5 million-square-foot project on a block on the north side of 42nd Street between 11th and 12th avenues. When completed, the project will include residential rentals, condominiums, retail space, and parking. The New York Sun has learned that the Related Companies and MacFarlane Partners are in final negotiations to develop a major mixeduse development site in Harlem.
More and more people who previously lived in the suburbs want to work and live in Midtown. These individuals and investors from around the world are seizing the opportunity of ownership of prized real estate in the greatest city in the world.
Mr. Stoler is a television broadcaster and senior vice president at First American Title Insurance Company of New York. He can be reached at mstoler@firstam.com.