The board that leads the residential cooperative at 303 East 37th Street in Murray Hill is testing the waters for a sale of the entire building as a development site in a transaction that could bring in about $100 million, sources familiar with the building told The Real Deal.
The co-op board is looking to sell the 84-unit, 80,000-square-foot building, which sits on a plot near the entrance to the Midtown Tunnel on Second Avenue. The site could accommodate a building twice as large under its current zoning, information from data firm PropertyShark shows.
State law allows for the sale of a co-op building, as long as the required number of shareholders — usually a supermajority — approve the plan.
“The by-laws would need to be examined,” real estate attorney Alvin Schein, a partner at the law firm Seiden & Schein, said. He is not involved in the current deal. “Most buildings would need a supermajority of two-thirds or three-quarters of the shareholders to sell the property,” depending on their specific by-laws. In addition, any rent-regulated tenants or original tenants when the building was converted to a co-op in 1980, have additional rights on their apartments, and could not be evicted as long as they continue to pay rent, Schein said.
The property is being marketed by Massey Knakal Realty Services, sources said. Robert Knakal, company chairman, declined to comment. Marcy Kornblum, who city Department of Buildings’ records identified as the president of 303 E. 37 Owners Corp., the co-op buildings ownership company, declined to comment.
It is highly unusual for a co-op building to sell, several real estate insiders said, but it is something that is occasionally talked about.
“It is rare you get that kind of consensus. Usually these kinds of things fall apart,” said Peter Hauspurg, CEO of brokerage Eastern Consolidated. He is not involved with this property.
The listings database StreetEasy shows sales for 38 of the 64 units.