The Real Deal New York

Developer snags Majestic, Broadhurst Theaters’ air rights

$17.5M deal works out to $300 a square foot -- much less than one industry expert expected

May 28, 2014 03:15PM
By Rich Bockmann

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Majestic Theater (Credit: Shubert Organization)

The developer of the Roseland Ballroom site paid a pair of Broadway theaters $17.5 million earlier this month for about 60,000 square feet of air rights, property records show. That works out to $300 per square foot — half the price one expert reportedly thinks the market should fetch.

Algin Management, which already has plans to build a 59-story apartment tower on the site of the defunct 52nd Street music venue, purchased a total of 58,392 square feet of excess development rights from two theaters owned by the Shubert Organization, property records recorded last week show.

Algin bought 57,210 square feet from the Majestic Theater on West 44th Street between Eighth and Seventh Avenues for $17,163,000 and picked up another 1,182 square feet from the Broadhurst Theater next door for $354,600, records show.

Both deals closed May 7 and worked out to an even $300 a square foot.

The Shubert Organization declined to comment on the transaction, which fell well below the expectations of one expert who predicted the valuable development rights would fetch prices in the $600 range.

City Center Real Estate President Robert Shapiro told Capital NY earlier this month he thought theaters could sell their excess development rights for about $600 a foot.

Back in March, a pair of the developers planning to build a 425-room hotel at 47th Street and 7th Avenue paid $409 a square foot for more than $34,000 square feet of air rights, reported to be a record high for the district. The venture, between Steven Witkoff and Michael Asner, shelled out $14.1 million to the Schoenfeld Theater for those rights.

Both theaters involved in the Roseland deal have unloaded air rights in the past.

The Broadhurst sold more than 27,000 square feet in two separate deals in 2011. In October of that year the theater cleared $225 a square foot when it sold 18,075 square feet for $4 million to ARK Partners for its Viceroy Hotel development at 120 West 57th Street.

In November the theater sold 9,480 square feet to the Stanford Hotels’ property at 120 West 41st Street for $3.8 million, working out to $400 a square foot.

For the Majestic, you have to go back to 2008, when the theater sold 48,180 square feet of air rights to Tishman Construction for its hotel at 44th Street and 8th Avenue for $12.4 million, netting a bit more than $257 per square foot.

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