Before Jeff Sutton and SL Green formed a partnership to acquire 1552 Broadway last summer, the diminutive landmark was best known for the four female Broadway stars on its facade.
Theater buffs trolling the neighborhood often visited the two-story building for the stone figurines of Ethel Barrymore, Marilyn Miller, Rosa Ponselle and Mary Pickford mounted on its second level in the 1920s. But with a T.G.I. Friday’s restaurant as its tenant, the building had otherwise become virtually indistinguishable from the bonanza of big-ticket retailers that have come to dominate Times Square.
Nonetheless, SL Green and Mr. Sutton, widely considered one of the city’s most savvy retail investors, saw greater potential for the 15,000-square-foot asset—a fact indicated by the price they agreed to pay its owner, the Riese Organization. Indeed, at more than $136.5 million, the sale last year amounted to a shocking $9,100 per square foot, more than a dozen analysts and real estate executives told The Commercial Observer in a series of interviews last week.
But because ground floor retail in the city is vastly more valuable than below grade or mezzanine levels, Mr. Sutton and SL Green could be said to have essentially paid well over $100 million for 7,500 square feet, a price that works out to a phenomenal $18,200 per square foot—dizzyingly higher than the $1,000 per square foot figure top-quality office buildings trade for, real estate insiders acknowledged.
“If Times Square is a 10-chapter book, we’re on chapter four right now,” said Patrick Smith, a retail executive and principal with the firm SRS Real Estate Partners who has followed the neighborhood’s evolution. “There’s no place that has more eyes on it and more consistent footsteps and TV coverage. Jeff gets that, and a deal like 1552 Broadway shows how he keeps pushing the area forward.”
Follow Daniel Geiger via RSS.