The Times Square Marriott at 701 Seventh Avenue has set a new record for the purchase price of Theater District air rights, paying $409 per square foot for 44,968 square feet of air rights, according to city records. The air rights were purchased by a development consortium led by the Witkoff Group, from the Gerald Schoenfeld Theatre and The Booth Theatre, as Commercial Observer previously reported. It will allow the new mixed-use development on the corner of Seventh Avenue and 47th Street to rise to 500 feet, bringing the building’s total square footage to 269,892 square feet.
The sale marked the first time that air rights in the Theater District Transfer District, which was created by the city in 1998 to allow landmarked theaters to cash out on their unused air rights, had surpassed $400 per square foot, according to an analysis performed for the Observer by TenantWise, a real estate services and advisory company.
WHEN SBFI, a vendor of financial and control room furniture, sought to relocate its showroom space, company executives repeatedly found themselves touring a web of buildings associated with Randy Sherman, an executive managing director at Murray Hill Properties who also represents Rose Hill Properties Associates.
But it was a 12-story asset at 461 Park Avenue South that solidified the company’s decision to commit to Midtown South. Despite initial worries about high rent, officials at SBFI, which counts seven of the world’s 10 largest investment banks as clients, were persuaded to move from 701 Seventh Avenue earlier this year. The change of heart, said Mr. Sherman, an executive managing director at Murray Hill Properties who represented the landlord, occurred shortly after SBFI officials were shown a clearer picture of just how tight a market Midtown South had become—yet a newly renovated lobby at the 31st Street building may have clinched the deal.
Mr. Sherman reviewed the plans with The Commercial Observer and discussed what, exactly, drew SBFI to a 4,775-square-foot, 10th-floor office earlier this year after a lease-signing in July.
Manhattan Market Report
Several sources confirm that Starwood Property Trust is in the final stages of issuing a $450 million construction loan for phase one of Related Companies’ Hudson Yards project. The loan is expected to close within the next 30 days.
An unprecedented sevenfold increase in retail property sales fueled the Manhattan commercial real estate sales market’s epic comeback in the fourth quarter – its strongest performance since 2007, according to preliminary data from Eastern Consolidated.
The hallmark quarter, with nearly $13 billion in sales volume – the strongest since record-breaking performances in 2007 (peaking at $19 billion in Q2 of 2007) – was triggered by fears of impending capital gains taxes, which had owners scrambling to unload properties before year’s end.
“This was definitely fiscal-driven growth,” said Barbara Byrne Denham, Eastern Consolidated’s chief economist. “Sellers wanted to cash out and buyers knew it, so they were eager to come to the table as well.”
Starwood Property Trust and Starwood Capital Group sold to Vornado Realty Trust a 25 percent participation in the $375 million financing on 701 Seventh Avenue, where a joint venture of developers is planning to build Times Square Gateway Center, a 340,000-square-foot multi-use complex.