The Real Deal New York

Himmel + Meringoff to sell 235K sf of Midtown air rights

Isaac Chetrit, Ray Yadidi in contract for deal in assemblage play

December 08, 2015 04:45PM
By Mark Maurer Twitter_logo_blue copy

1352 Broadway

1352-1362 Broadway in the Garment District (inset: Stephen Meringoff)

UPDATED, 5:50 p.m., Dec. 8: Investors Isaac Chetrit and Ray Yadidi are in contract to buy 235,000 square feet of air rights in the Garment District from Himmel + Meringoff Properties, as part of a larger assemblage play, The Real Deal has learned.

The unused development rights are affiliated with the landmarked Haier Building, the five-story former home of the Greenwich Savings Bank at 1352-1362 Broadway.

The 51,470-square-foot property is far smaller than zoning laws would allow. Over the course of a decade in the 1990s, Himmel + Meringoff acquired the fee, the leasehold, the mortgages and a long-term lease at the property. Then, in 2001, the Flatiron District-based real estate investment firm sold the building to Haier America, the U.S. arm of the China-based appliance maker, for $14 million. Himmel + Meringoff opted to hold onto the air rights.

If the air rights deal were to close, Garment District-based investors Chetrit and Yadidi will have gathered an assemblage spanning roughly 375,000 buildable square feet, sources said. The price was not disclosed.

In October, they paid $54.3 million for a one-story retail building at 993 Sixth Avenue from Empire Hotel Group, which scrapped its plans for a 44,000-square-foot hotel, according to property records and sources. Chetrit and Yadidi also own a 21-story, 96,000-square-foot office building at neighboring 989-991 Sixth Avenue, which they bought in 2007 for $49 million, records show.

Chetrit, Yadidi and Himmel + Meringoff did not respond to requests for comment.

The Himmel + Meringoff air rights are flexible in that they can be used on the same block or transferred across the avenue. The block-long property at 1352-1362 Broadway, constructed in 1922 as the bank’s headquarters, has frontage on Broadway, Sixth Avenue and West 36th Street. The alternate addresses are 981-987 Sixth Avenue and 101-111 West 36th Street.

Robert Shapiro, a veteran assemblage broker and president of City Center Real Estate who was not familiar with the deal, said the value of air rights in that area are north of $500 per square foot on average.

The Haier Building, which houses the popular events venue Gotham Hall, hit the market in June for an undisclosed amount. Gotham Hall’s net lease across three floors runs through 2033.

Further north in Midtown, Chetrit and Yadidi secured $130 million in refinancing for a pair of office buildings at 15 West 47th Street and 22 West 48th Street in October.

Vornado Realty Trust also has a sizable assemblage in the area, with three contiguous properties in Penn Plaza on 34th Street, between Seventh and Eighth avenues.

Correction: A previous version of the story included an incorrect price for the air rights.