It’s the most lucrative time in the city’s history to own in Soho.
Two connected buildings at the corner of Spring and Broadway are in contract to sell for $190 million to a group of Israeli investors, a source familiar with the deal said. The buildings, 530-534 and 536-538 Broadway, have gone to contract with blistering speed and represent the second batch in Soho in the last two months to sell for more than $1,000 per square foot—a new benchmark for the retail-heavy district. The buildings total about 170,000 square feet, according to Propertyshark.com.
The source did not identify the specific buyers but said the deal didn’t include Lev Leviev, the freewheeling Israeli billionaire who is in contract to buy both 229 West 43rd Street and the clock tower on Madison Avenue.
In a way, the speed in which this deal was completed had the earmarks of Mr. Leviev. The Schack family had gone on the market with the buildings about two weeks ago and suddenly they were gone last week; someone gobbled them up that quickly (but more on speedy buys later).
For Soho, it’s further evidence of its increasing vitality. Just two months ago, 600 Broadway, at the corner of Houston, went to contract for more than $1,000 per square foot, an amount reserved for the strongest corners of midtown (and supposedly not for a district like Soho and its moderate office rents).
Enter retail rents! They’re quickly playing as integral a factor as office rents in setting the market. The connected buildings at 530-534 and 536-538 Broadway include retail outlets like Levi’s and Scoop.
The deal was brokered by Cushman & Wakefield’s investment-sales dynasty of Richard Baxter, Ron Cohen, Scott Latham and Jon Caplan. They would not be interviewed for this item.
Pre-Emptive Buys All the Rage
While on the topic of quick buys, here’s a trend: There were quick buys at Spring and Broadway, the Times Building at 229 West 43rd Street, the Clock Tower at 5 Madison Avenue and the Lipstick Building. And that’s in the last month alone.
If the buildings had sold in a normal bidding process, they all should have lasted on the market past Memorial Day.
But not anymore. Meet the pre-emptive buy, the latest trend in Manhattan’s commercial real-estate scene. Don’t want to travel the risky and unpredictable road that is the bidding process to buy a building? Then offer that indecent proposal and subvert the whole process.
It’s worked for Lev Leviev, Haim Revah (the proud owner of the Lipstick Building) and now the Israeli owners who control a powerful corner in Soho.
“New York is a little like the Wild West when it comes to bidding,” said Eric Anton, an investment-sales broker for Eastern Consolidated. “Because prices are increasing at such a fast pace these days, people want to make a buy as soon as possible.”
There’s a common thread between all the buyers in the last month: They’re new to the city.
“We have seen buyers pursue properties pre-emptively because they see this as an opportunity to start establishing themselves in the New York market,” said Jon Caplan, a broker at Cushman & Wakefield.
Mr. Leviev used to team up regularly with developer Shaya Boymelgreen, but now that he’s buying on his own, he’s quick to the draw.
Another reason for the pre-emptive buy: They don’t want to lose. Mr. Revah, for instance, was a runner-up in bidding wars for years. Tired of losing, he asked representatives from Tishman Speyer to name their number for the Lipstick Building; they did, and he wrote a check.
But could this be a sign that the market is peaking? An experienced bidder, Douglas Durst, who is pairing with Steven Roth of Vornado to bid on the Metropolitan Transportation Authority’s West Side rail yards, doesn’t think this is any cute trend.
“I think it is an indication that the market is getting to the top,” said Mr. Durst. “It is not a healthy sign.”
MetLife Brings Buying Back
Watch out, here comes MetLife. After making two colossal sales—200 Park Avenue for $1.72 billion in June 2005 and Stuyvesant Town and Peter Cooper Village for $5.4 billion last year—it seemed like the insurance giant was cashing out. And that wouldn’t be a bad strategy, either (what better time than now?).
But it appears the company’s not done. Quietly, MetLife is creeping back into the Manhattan real-estate game.
Since April 30, MetLife has made more than $50 million worth of buys in the city. It purchased a nine-story building near Union Square at 110 East 16th Street for $20.8 million; it bought a garage at 569 Lexington Avenue for $26.9 million; and it purchased a parking lot at 155 East 38th Street for $6.7 million.
“These properties fit well within our long-term strategy for real-estate investments,” wrote Christopher Breslin, a spokesman for MetLife, in an e-mail to The Observer.
He said the garage, parking lot and office building “fit a particular niche” in the company’s real-estate portfolio.
What niche? He wouldn’t say, but the point is clear: MetLife, however slowly, is back.
Think Midtown Office Space Is Expensive? You Don’t Know Tokyo
Hey, apparently midtown is a pretty good bargain.
Sure, midtown Manhattan may rank as North America’s most expensive commercial market, but compared to the rest of the world, it’s cheap! Midtown’s average office rent of $69.44 per foot is the 21st-most-expensive market worldwide, according to a new study conducted by CB Richard Ellis.
Not surprisingly, it’s the West End in London that takes the top spot in the annual list, with average rents of $241.22 per square foot (now is the time to stop ogling at rents in the Seagram Building!). The City of London’s average of $165 a foot was second-highest.
Districts in Tokyo (rents in the $160’s and $140’s) came right behind London for the world’s priciest office space, and India is getting pretty hot. Mumbai rose two spots to take fifth place (rents at $138 per foot), and New Delhi cracked the top 10 this year ($116 per foot) for the first time.
But the world should take notice: Here comes downtown Manhattan. The financial district ranked 10th with the world’s fastest-growing rents, with a rent increase of 43 percent from last year.
Follow Lisa Medchill via RSS.