The Real Deal New York

Massey Knakal to market 1.5M sf of Moynihan Station air rights

By Adam Pincus | June 27, 2014 12:37PM

New York State’s business promotion corporation, Empire State Development, picked the investment brokerage firm Massey Knakal Realty Services to sell the 1.5 million square feet of air rights above Moynihan Station in Midtown.

The announcement was made today during a meeting of the directors at Empire State Development. The decision could jump-start additional development around the station.

The sale of air rights is part of the larger, ongoing Moynihan Station redevelopment plan, which will bring New York Penn Station entrances to the James A. Farley post office building at 421 Eighth Avenue, between 31st and 33rd streets. The state acquired the building in 2007.

The state agency first posted a notice on its website in February that it was seeking requests for proposals from brokers to market the air rights.

At least five groups — Massey Knakal Realty Services, Eastdil Secured, JLL, Cushman & Wakefield and a joint venture between two smaller firms, City Center Real Estate and Tenant Wise — had been vying for the job, insiders said. The state agency interviewed the firms in April in preparation for making today’s decision. Some of the individual brokers at the firms who responded to the request for proposals included Robert Knakal, chairman of Massey Knakal; Richard Baxter, a vice chairman at JLL; and Robert Shapiro, president of City Center.

By all accounts, the process will be complicated, in large part because it involves the sale of government property, the air rights. In fact, earlier this year City Council member Corey Johnson and Manhattan Borough President Gale Brewer said they had not been given enough notice about the sale of the air rights.

Some insiders estimate the value of the air rights at between $450 million and $500 million, even though it’s possible not all 1.5 million square feet of development rights will be sold.

Shapiro, who is widely considered one of the city’s top air rights specialists, said it would be a difficult process.

“It will be a long and arduous task since it involves multi levels of government, community groups and boards to approve the sales – and that’s after having zoning changes enacted to expand the boundaries where the transferable development rights can be distributed,” he said.

According to information on the Empire State website seeking requests for proposals, Massey Knakal will be awarded a listing agreement that initially runs for two years, with three extension options, each for one year.