Wednesday, June 17, 2009

What could $20 million buy? Not even two small DTB development sites

Forest City Ratner reportedly wants to pay just $20 million to the Metropolitan Transportation Authority for the portion of the Vanderbilt Yard it needs to build the Atlantic Yards arena. It initially promised to pay $100 million for the whole railyard. This series attempts to add some context.

Here's an example of a lot nearly one-seventh as small that in late 2007 sold for more than half the $20 million sum.

From the First Quarter 2008 Massey Knakal Sales Journal:A 187’ x 80’ development site with plans for hotel rooms at 300 Schermerhorn in Downtown Brooklyn was sold by Massey Knakal Realty Services in an all-cash transaction valued at $11,900,000 to a hotel developer and operator... The as-of-right buildable square footage is approximately 83,000 square feet for a mixed-use development project, or 90,000 square feet for a community use property. The site is also located near several mixed-use retail, residential projects, office buildings and is only blocks from one of the strongest retail corridors in New York City, the Fulton Mall.

Keep in mind that the segment of the Vanderbilt Yard at issue is 495' x 200', or 99,000 square feet. The 300 Schermerhorn site is 14,960 square feet.

Yes, the market has changed, but has it changed that much? And isn't a site supporting an arena, housing, and more somewhat more valuable than a hotel site?

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