28.2.12
Solow Buys HIgh
Sheldon Solow, owner of the very desirable 9 West 57th has just dropped $120M in what seems to be a move not entirely based on the underlying fundamentals. As the Full Story below notes, the $120M pricetag for an 11 story 81kSF building at 12 West 57th works out to $1400/SF. This is no less alarming when translated into the more useful metric of buildable SF... $1106/SFbld.
One would like to think that his current ownership of the adjacent space has factored into the math here. Last mortgaged for an even $1M back in the late 80s, it can be assumed that the empty 6 West 57th is somehow on the books as free land.
Even considering this, without picking up some air rights from adjacent buildings (and further increasing the overall land cost), the best buildable SF that could be hoped for as of right is 15 or so stories... 30 with a well styled envelope. It isn't a great residential street, the land cost and small size all but precludes a profitable commercial tower and a 250+ room luxury hotel would have some stiff competition with Extel's announced plans for the same 2 doors down the street.
The Full Story below cites a source who states that Solow wants to make the block a bit more upscale. But, from the outside this looks like a competition play. By outbidding Extel for the property, Solow prevents them from building a very large luxury hotel in his backyard and limits them to something of a more 'boutique' scale.
Someone please tell us that this isn't about losing a view of the Empire State Building from 9 West 57th.
Sheldon Solow may have flirted with record $/SF pricing in his purchase of 12 West 57th or he may have just spent the most money to preserve a view since the Rockefellar's bought the Pallisades. Time will tell, but at Cubed Advisory, we will not hold our breath to see the results.
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