The Real Deal New York

Entire Soho co-op building on market for $50M

Insiders see growing number of owners unify to sell their own property

June 20, 2014 12:00PM
By Adam Pincus

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From left: Peter Hauspurg, David Schechtman, 61-63 Crosby and Robert Knakal

The owners of a 19th-century, four-story cooperative residential and retail building in Soho have banded together to offer their property for sale. Brokers familiar with the property estimated it could sell for $50 million.

The co-op owners of 61-63 Crosby Street, a 20,608-square foot building between Spring and Broome streets with about 6,500 square feet of additional development rights, made the unusual decision to sell the entire building, which recently hit the market. It is atypical, insiders said, because it is difficult for co-op members to unite behind a decision to sell their home.

The offering is further evidence that the demand from buyers offering huge sums of money for retail, commercial and residential space in Soho is pushing even difficult sales forward.

The stone-fronted, Italianate and neo-Greco loft building, completed in 1876, is in the city’s Soho-Cast Iron Historic District Extension, which was designated in 2010. The building, in addition, was home to the city’s oldest women’s artists collective, A.I.R. Gallery, from 1971 to 1994. In 1981, it was converted to a co-op. It now has one retail unit on a portion of the ground floor, and also includes seven loft apartments and artists’ studios.

The Soho building will be delivered with a plan for vacancy, an offering memorandum reviewed by The Real Deal shows. It is being marketed exclusively by an Eastern Consolidated team of David Schechtman, Peter Hauspurg and Abie Kassin. Neither Schechtman nor a spokesperson for the co-op would comment on the matter.

While rare, this is not the only example of a co-op board seeking to sell its building, and broker Robert Knakal, chairman of Massey Knakal Realty Services, is seeing more of it.

In early February, he tested the market with a much larger co-op building, at 303 East 37th Street in Murray Hill, that was expected to sell for as much as $100 million. It is still on the market.

Knakal, who was not involved in this Soho listing, said he is seeing more of these offerings because of high land prices. He is also marketing a residential condominium building where the owners are offering the entire building for sale.

“Land has appreciated so much in value that the owners of the individual units can get two or three times what the apartment is worth,” Knakal said.

Carson Street Clothiers inked a five-year lease for 63 Crosby’s retail space in late 2012 with one five-year extension. It is paying about $160 per square foot for the 2,000-square-foot storefront. The lease has a six-month termination provision, so a new owner could recapture the space to release or occupy itself, sources said.

While asking rents for retail space on Spring Street, Prince Street and Broadway have flirted with the $1,000-per-square-foot level over the past year, side street rents are not as strong. Lisa Rosenthal, a broker with Lansco who was not involved in this listing, said retail rents on the block are between $150 and $250 per square foot.

Yet Crosby is growing as a retail destination.

“With the rest of the side streets in Soho filling in with great fashion tenants, Crosby is now perceived as an affordable, cool alternative,” Rosenthal said.

The retail can be doubled to about 4,000 square feet. If a new owner could snag a tenant for $250 per square foot, the retail alone could be worth about $22 million if it were sold separately.

And prices on upper floors are rising for commercial as well, said Christine Emery, an executive managing director at MHP Real Estate Services. She, too, was not involved in the Soho listing.

“Upper level commercial space, depending on the quality, is between $55 and $65 per square foot,” she said. “Both ground and upper level space still have room to increase if the market stays strong.”

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