Steve Cuozzo

Steve Cuozzo

Real Estate

55 Broadway sale shows retail ups downtown values

For the second time in four months, an impending downtown office tower sale shows how a retail addition requiring time-consuming city approval can help to double a building’s value in just eight years.

Harbor Group International has a contract to buy 55 Broadway from Broad Street Development and partner Crow Holdings, as I reported first Monday morning on nypost.com.

The sale price for the 1983-vintage, 336,000 square-foot tower is $157 million, sources said (neither buyer, seller nor brokers Jones Lang LaSalle would comment.) Raymond Chalmé and Daniel Blanco’s Broad Street had paid just $82 million for it in 2006.

The near-100 percent markup owes much to city approval, which Broad Street earned to create a new, 11,000 square-foot retail “glass box” at the tower’s base.

The addition of precious new store frontage, which can be combined with 22,000 square feet of second-floor retail, needed the city’s blessing, I reported in February 2013, because it required eliminating a little-used pedestrian “plaza.”

The retail box at 55 Broadway has yet to be built, but it’s likely that Harbor Group International will waste no time.

The deal should close in a few weeks. Although HGI isn’t yet a household name in New York, the Norfolk, Va.-based company boasts a $3.8 billion global portfolio, including 10.5 million square feet of commercial space. It owns 1412 Broadway and a few small apartment buildings here.

Headed by CEO Jordan E. Slone, HGI is snatching up 55 Broadway at a time when the Lower Broadway retail corridor is on fire. Spanish fashion store Zara recently signed a lease at 222 Broadway valued at $500 per square foot at sidewalk level.

If 55 Broadway’s nearly 100 percent markup sounds familiar, recall that in December, JP Morgan Asset Management clients paid $498.45 million for the controlling interest in L&L Holding and Beacon Capital’s 195 Broadway nearby. The transaction valued the landmark at more than $500 million (L&L retained a minority stake), nearly twice the $266 million L&L founder David W. Levinson and partners paid to buy it from Peter Kalikow in 2005.

The astronomical run-up was due in part to the creation of high-visibility retail space as well. L&L’s $50 million lobby makeover required approval by the Landmarks Preservation Commission — resulting in 35,000 square feet of prime store space at a location that had almost none.


The Fashion Institute of Technology is bursting at the seams, and has signed an 18-year lease for 55,000 square feet at 333 Seventh Ave., across the street from its West 27th Street campus.

Cassidy Turley’s Susan Kahaner said her firm “uncovered a hidden block of space at 333 Seventh, which enabled FIT to relocate several offices from West 27th Street, making available much-needed space on campus for academic use.”

The asking rent was in the $40s per square foot. Kahaner worked the deal for FIT with her firm’s Jennifer Ogden and Tracy Johnson, while Josh Smith acted in-house for landlord Samco Properties.


Investment-banking advisory firm Evercore Partners is expanding into the Rudin Family’s 40 E. 52nd St. The firm signed a nine-year, 30,356 square-foot lease there, while keeping its existing offices across the street at 55 East.

Asking rents at 40 E. 52nd range from $60 to $70 per square foot. Colliers International’s Alan Desino repped Evercore; Tom Keating repped Rudin in-house.


Related Cos. is taking its large-scale development expertise to London. The Hudson Yards builder, led by Stephen M. Ross, has formed a joint venture partnership with real-estate investment group Sydney & London to redevelop the area around railway terminal Euston Station.

The deal, first reported by Britain’s Property Week (to which I’m a contributor), would create a 35-acre mixed-use project with a new high-speed rail link — much larger than Hudson Yards’ 26 acres. The plan is subject to government approval.


How’s the Upper West Side retail scene doing, nine months since new zoning rules imposed limits on storefront and bank sizes along Broadway and Columbus and Amsterdam avenues?

Walker Malloy’s Rafe Evans, who brokers the lion’s share of UWS retail deals, observes:

“It’s pretty healthy right now. The best locations south of 72nd Street are renting in the upper $400s [per square foot], which is where Madison Avenue was five years ago. The sustainability of this trend is unclear, however.

“Fun, if not four-star, downtown restaurants are moving in, like Parm at 235 Columbus. Dire pronouncements about fashion displacing eating and drinking establishments and ‘malling’ the neighborhood look pretty silly now. At 292 Columbus, the Malta brothers of New York Restaurant Group are replacing Footlight Shoes with a restaurant.”

But, Evans says, “the storefront-limitation rule has affected my deals twice and forced my prospective tenants to rethink their plans. The intention was to foster a mom-and-pop environment of small shops, but most stores are not huge chains anyway. So the net effect is to slightly diminish the pool of prospective tenants, which translates into longer vacancies and perhaps slightly lower rents.

“Chase Bank just announced it’s not opening any more branches, somewhat validating my opinion that these new regulations closed the barn door after the horse had gone.”