Tuesday, June 23, 2009

What could $20 million buy? Only a little more than this small Lower East Side site

Forest City Ratner has agreed 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.

From the Fourth Quarter 2008 Massey Knakal Sales Journal:
A 91’ x 75’ development site at 154 Delancey Street on the Lower East Side of Manhattan was sold by Massey Knakal Realty Services in an all-cash transaction valued at $15,750,000. The property is located on the north side of Delancey between Clinton and Suffolk Streets. Based on the C6-2A proposed zoning (current zoning is C6-1), it contains approximately 47,706 buildable square feet. Recent retail rents on the north side of Delancey have exceeded $125 per square foot, while condo comps are approaching $1,500 per square foot. The property sold for $330.15 per buildable square foot to a well-known hotel developer from Queens.

The segment of the Vanderbilt Yard at issue is 495' x 200', or 99,000 square feet, some 14.5 times larger than the Lower East Side site. If you multiply the Upper East Side price by 14.5, it comes out to $228.4 million.

The Lower East Side site only supports 47,706 square feet. The Atlantic Yards arena block, of which this segment (Block 1119, Lot 7) would be at least a third, would support an 800,000 square foot arena and at least 1.5 million in development rights, according to the City Funding Agreement. (The towers on the area block, as approved, were supposed to contain 2.69 million square feet.)

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