Times Square’s former Elk Hotel site pitched at retailers

Trio of properties available for $2 million in annual triple net rent
By Adam Pincus | September 24, 2013 06:33PM

The owner of three adjacent parcels at the corner of 42nd Street and Ninth Avenue near Times Square has put the site on the market with brokers expecting offers of about $2 million per year in triple net rent, meaning the tenant pays taxes and other expenses.

The parcel includes the four-story corner building at 360 West 42nd Street and the neighboring structures at 574 and 576 Ninth Avenue, which can house a total of 21,000 square feet of above ground retail space.

The corner structure used to house the Elk Hotel, which was famed for being a relic of Times Square’s seedier days. The properties are owned by companies controlled by Martin Sanders’ Sanders Investments.

The commercial brokerage firm Avison Young is representing Sanders in the offering. Avison Young Tri-State President Arthur Mirante and principals Jon Epstein, Michael Leff and Charles Kingsley are handling the assignment.

Sanders purchased the properties in the 1980s.

“I felt eventually there would be a vast improvement” in the neighborhood, given its proximity to the Port Authority Bus Terminal and Times Square, he said. “This time marked the right time for a long-term net lease.”

The residential units in the building are vacant, and he holds cancellation clauses for the retail in the ground floor spaces, he said.

The buildings are adjacent to Extell Development’s 60-story residential tower the Orion at 350 West 42nd Street. Extell purchased the air rights from the Sanders buildings in 2002, limiting the redevelopment prospects for the site.

“The highest and best use is multi-floor retail. It would be a great branding opportunity with high visibility on 42nd Street,” Epstein said.

The brokers said the owner was also offering the option of leasing just the corner building, with an estimated rent of $1.2 million per year.