Metropolitan College eyes Rector Street spot

School seeking $68M in tax-free bonds to help fund purchase of 110,000-square-foot space

New York /
Aug.August 19, 2014 02:55 PM

The Metropolitan College of New York, on the search to relocate its Hudson Square campus, is eyeing a 110,000-plus-square-foot office condo at 40 Rector Street. Such a deal would mark the largest buy at the building since owner Phillips International began converting the property three years ago.

MCNY, the professional education school founded by social entrepreneur Audrey Cohen 50 years ago, is considering purchasing the sixth, seventh and eighth floors of the 19-story FiDi building, as well as a ground-floor condo with a private entrance facing West Street.

The college is seeking $68 million in tax-free bond financing from the Build NYC Resource Corporation, which will consider the matter at a public hearing early next month.

A small portion of the bond’s proceeds would go to pay back the outstanding balance on a 2005 bond MCNY used to renovate a space it previously occupied at 75 Varick Street. The remainder, if approved, would be combined with MCNY’s funds to buy the Rector Street properties.

The college declined to comment specifically on Rector Street, but it did announce earlier this year it was launching a search to relocate its current Manhattan campus at 431 Canal Street. The school offers programs in the Mott Haven section of the Bronx and is building a full campus nearby.

Kenneth Siegel of JLL, who is leading the school’s search to relocate in Manhattan, could not be immediately reached for comment.

If the deal goes through, it would be the largest purchase at Philips’ 600,000 square-foot building, located south of the World Trade Center site. The company bought the building in 2001 and leased it to tenants such as Merrill Lynch and several government agencies until it decided to go condo in 2011.

The Council of School Supervisors and Administrators union was the first to buy at the building, picking up a 32,019-square-foot space in April 2012 for $8 million.

It was followed by, among others, the China Institute of America, the Urban Justice Center and the NAACP.

The Federation of Protestant Welfare Agencies, which went into contract earlier this month to Sell Its Park Avenue headquarters for $50 million, was reportedly eyeing space in the building.

There are 75 commercial condo buildings in Manhattan covering some 9 million square feet with an availability rate of 7.6 percent, according to a mid-year report by the specialty brokerage firm Rudder Property Group. Prices were lowest in the downtown submarket, averaging $511 per square foot during the first half of the year.

According to Rudder, average prices in Manhattan are up 11 percent over the past five years, driven by demand from non-profits that are taking advantage of a strong investment-sales market to sell off their properties and consolidate in more efficient spaces.


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