This 23-Floor Manhattan Office Building Just Sold at a 97.5% Discount

[DCReid]

Can it be demolished and redeveloped into mixed use?

NEW YORK — In 2006, the hulking office building at 135 W. 50th St. in midtown Manhattan sold for $332 million. Tenants occupied nearly every floor; offices were in demand; real estate was booming.

On Wednesday, it changed hands again, in an unusual online auction — for $8.5 million...

https://www.yahoo.com/news/23-floor-manhattan-office-building-174757219.html

[mhays]

This is an odd deal...just the building, not the land, and the land lease (99 years to go) is currently revenue negative, i.e. the least costs more than the current (partially-full) tenant lease revenue.

The buyer could renovate to improve the office infrastructure (big investment) or even convert to housing or demo/rebuild (gigantic investment, not a great building, off-ave site) but either is a huge bet. Any major project would require buying out leases.

[bilbao58]

Originally Posted by DCReid

Can it be demolished and redeveloped into mixed use?

If JP Morgan can demolish 270 Park Avenue, anything can be demolished.

[meh]

doom loop! DOOOOOOOOOOOOM LOOOOOOOOOOOOOP!

[dave8721]

Originally Posted by mhays

This is an odd deal...just the building, not the land, and the land lease (99 years to go) is currently revenue negative, i.e. the least costs more than the current (partially-full) tenant lease revenue.

The buyer could renovate to improve the office infrastructure (big investment) or even convert to housing or demo/rebuild (gigantic investment, not a great building, off-ave site) but either is a huge bet. Any major project would require buying out leases.

Ah I see, when I first saw it, I thought just the Midtown land has to be worth way more than that. But I see this does not include the land. Just the building on it.

[JManc]

Originally Posted by bilbao58

If JP Morgan can demolish 270 Park Avenue, anything can be demolished.

That was during the before times, when people still went into the office and were expected to be there 5 days a week. I couldn't see JPMorgan Chase throwing away a perfectly good 50-story building these days.

[ardecila]

It's a huge floorplate, mid block. Good luck turning that into residential. Not to mention the existing office tenants you have to buy out to make that possible. I'm not sure what affordability requirements NYC will throw on those units, too.