The Real Deal New York

Macklowe files demolition plans at Third Avenue site

Developer paid $100M for property at center of area's red hot retail scene

November 06, 2014 05:00PM
By E.B. Solomont

From left: Harry Macklowe, 985-989 Third Avenue and renderings for the development site

From left: Harry Macklowe, 985-989 Third Avenue and renderings for the development site

Macklowe Properties has filed demolition plans for the Upper East Side development site it snapped up for $100 million in August.

The plans call for demolishing three buildings 985-989 Third Avenue, including a three-story and two four-story structures, according to filings submitted Thursday to the city’s Department of Buildings.

The property is part of a development site with 90,000 buildable square feet that the firm, headed by Harry Macklowe, picked up this summer for roughly $1,100 per square foot.

Office landlord SL Green sold 981 Third Avenue and 983-987 Third Avenue to Macklowe for about $69 million. And Macklowe also purchased 989 Third Avenue from Emmes Group for $31.3 million.

The buildings, plus air rights, were put on the market together.

Macklowe Properties declined to comment on its plans, but it seems likely the developer could build condos with retail at the base. “The highest and best use would be a condo building with a significant retail component,” said Bob Knakal, chairman of Massey Knakal Realty Services, who marketed the property with Massey Knakal’s Clint Olsen.

“It’s a great retail location,” said Knakal, speculating that retail could comprise two or three floors of the development. “A developer would want to put as much in as possible.”

Located at the corner of East 59th Street and Third Avenue, the site is at the center of a changing retail corridor. As residential towers rise along Billionaire’s Row, retail along a 15-block stretch of 57th Street is changing drastically, with retail space being snapped up for record prices and trendy restaurants and stores moving in.

Retail rents in the area have surged over the last six months, according to a new report from the trade group the Real Estate Board of New York. The average asking rent for retail space along 57th Street between Fifth Avenue and Park Avenue rose by 25 percent since May to $1,250 per foot. During the same time period a year, that figure was $885 per foot.

Rents are being pushed up by like Macklowe and CIM Group’s 96-story 432 Park, at the corner of 57 Street, and Crown Acquisitions and Oxford Properties Group’s 450 Park Avenue.

  • Marc

    Harry’s a good man. Best wishes to him.

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