As the market drops and many give up on stitching together plots for big projects, some players are still quietly buying up NYC sites
(Illustration by Andrew Colin Beck)
Piecing together a sizable parcel of Manhattan land is a time-consuming and hairy process.
And in today’s tanking investment sales market, many are just avoiding it outright.
But there is still a handful of players — many of them among the city’s savviest and most risk-tolerant — in the assemblage game. And the chess moves they are making, which often involve seemingly unconnected purchases throughout Manhattan, offer a window on the next batch of projects coming down the Manhattan pike.
“With assemblages, you get a sneak peek of the next wave of development,” said Ross Moskowitz, a partner at law firm Stroock Stroock Lavan.
Isaac Chetrit and Sioni Group, for example, picked up two buildings and 235,000 square feet of air rights over eight years to make way for an 80-story mixed-use tower on Sixth Avenue in the Garment District designed by Kohn Pedersen Fox. Icon Realty Management, meanwhile, stitched together eight parcels and nearby air rights over nine years to create an Upper East Side site where it’s now planning two condo towers. And MKF Realty snapped up three parcels and a batch of air rights for its planned 250,000-square-foot Hell’s Kitchen office building, though that project isn’t slated to break ground for another few years.
Generally, these types of assemblages involve negotiating with reluctant sellers, figuring out who has air rights to unload at nearby parcels and hashing out the exits of residential and commercial tenants — all while ensuring that the project still pencils out profits. And all of that is becoming increasingly tricky to pull off in this market.
In a stronger market, investors tend to buy contiguous low-rise buildings with the intention of waiting out the remaining leases and then demolishing the properties.
These days, many players won’t even bother doing that, largely because lenders have pulled back on construction lending and the luxury condo market is oversaturated.
Eastern Consolidated’s Brian Ezratty — who recently represented the Carmel family in its sale of an $80 million Upper West Side parcel to Gary Barnett — said today is “not time to buy and hold and gamble.”
“I don’t even look at deals where the guy says, ‘There are only two tenants left,’” Ezratty said.
Colliers International’s Scott Latham, who co-heads the firm’s capital markets and investment services division, also 上海夜网论坛 said the pool of investors looking to put property puzzles together has shrunk. Assembling in this market, he said, is “just not the wisest idea.”
Manhattan investment sales activity plummeted 45 percent in the third quarter year over year, while residential rents, office rents and condo prices are all down, making it hard to justify construction. Perhaps as a result, some who have completed assemblages have determined that selling the site is more profitable than cons[……]