The Real Deal New York

Carmel wants $52M for excess Fulton Street air rights

SF-based firm building 483-unit tower in Financial District

July 21, 2016 01:35PM
By E.B. Solomont

Ron Zeff and 118 Fulton Street in the Financial District

Ron Zeff and 118 Fulton Street in the Financial District

San Francisco-based Carmel Partners is looking to shed 130,000 square feet of excess air rights at 118 Fulton Street, the site of its under-construction 49-story residential tower in the Financial District.

Ron Zeff’s firm is seeking $400 per square foot for the inclusionary air rights, a figure that adds up to $52 million. In all, the developer obtained a total of 180,000 square feet of inclusionary air rights at the site in a deal with the city, which would fetch $72 million if sold at the per-foot asking price; 50,000 square feet of the 180,000 sum is already in contract for an unknown amount.

Carmel bought the site for $171 million in 2014 from David Lichtenstein’s Lightstone Group TRData LogoTINY.  The deal included a total of more than 406,850 buildable square feet – including 380,600 square feet at 112-118 Fulton and more than 26,200 square feet of air rights transferred from 120 Fulton.

Carmel received an additional 180,000 square feet of inclusionary air rights as part of a deal with the city to include 97 affordable apartments in its rental tower. But the zoning on the Fulton Street site – the envelope they can build within – is only so big, said HFF’s Rob Hinckley, who’s marketing Carmel’s excess air rights with Andrew Scandalios, Eric Anton, Jeff Julien and Rob Rizzi.

Hinckley said the air rights can be transferred to a residential project anywhere within Community Board 1, which includes Tribeca, the Financial District, Battery Park City and the Seaport/Civic Center.

Tenantwise, a firm that serves as an intermediary for air rights transfers, found that Manhattan air rights averaged $278 per square foot last year, the highest point since $305 in 2013.

Plans for 118 Fulton have gone through several revisions in the past few years.

Prior to Carmel buying the site, Lightstone filed plans to build a 48-story tower with 452 residential units. It later changed those plans to a 59-story tower with 460 units after being denied a 421a tax abatement.

Carmel’s early plans called for a 63-story with 476 apartments and 8,000 square feet of retail. Now, plans call for a 49-story tower with 483 units. The current plans, filed with the city’s Department of Buildings in March, call for a 520,928-square-foot mixed-use building with nearly 50,000 square feet of commercial space.

Carmel received two construction loans from Wells Fargo totaling $173 million, records show.

The real estate investment firm is also co-developing a 125-unit condo tower at 325 Lexington Avenue with Times Square Construction & Development.

The firm’s other New York holdings include 15 Cliff Street, a 151-unit rental tower, and the Electra at 354 East 91st Street, a 163-unit apartment building.

MENU