Werner-led group pays $285M for land under 100 West 57th Street: sources

324-unit Carnegie House co-op faces ground rent reset in 10 years, insiders say

TRD New York /
Nov.November 06, 2014 11:30 AM

David Werner, a Borough Park investor who has wowed New York City with a series of big buys this year, partnered with Rubin Schron and the Cohen family to pay $285 million for the land under 100 West 57th Street, sources told The Real Deal. The 324-unit Carnegie House cooperative building is the ground tenant on the property.

A person close to the deal said the investment group closed yesterday on the purchase of the property, which is located at the corner of Sixth Avenue and 57th Street.

This is the third major acquisition by David Werner this year. He purchased 5 Times Square for $1.5 billion and the leasehold for the Mobil Building at 150 East 42nd Street, for $855 million. Werner, Schron and the Cohen family’s Carlton Associates did not immediately respond to requests for comment.

Insiders expect to see more pricey sales of land under co-op buildings with resets looming.

In fact, the sale is being mirrored nearby with the marketing of the ground under the Trump Plaza at 167 East 61st Street, which has a rent reset in 2024. Eastdil Secured brokers Doug Harmon and Adam Spies have that listing.

The co-op building has a ground lease that runs for another 51 years with the property owner, currently paying about $4.4 million per year. In approximately 10 years, the rent for the ground lease payments will reset. That reset will be based on market values.

Ground resets typically price the new rent at about 6 percent of the current market value.

Investment sales broker Robert Knakal, chairman of Massey Knakal Realty Services, estimated the value of the land to be at least $1,200 per square foot and up to $1,500 per foot, if the value of the retail is taken into consideration. Knakal is not involved in this property.

At that value, the land with 377,000 square feet of development rights, would be worth $452 million. That could work out to an annual rent payment of $27 million per year, if reset today, according to an analysis by TRD.

To help fund the purchase, the group obtained a $180 million loan from Natixis Capital Markets in a deal arranged by Drew Anderman, a senior managing director at the mortgage brokerage firm Meridian Capital Group, insiders familiar with the deal said.


Related Articles

arrow_forward_ios

RXR and Walton Street Capital near deal to sell 237 Park Ave stake to David Werner

Morgan Stanley lends Werner and partners $150M for Pfizer HQ buy

Cammeby’s buys Kew Gardens resi complex for $23M

David Werner buying Pfizer’s Midtown HQ for $360M

David Werner, partner buy giant Deep South portfolio for $500M-plus

Loan for Schron: Cammeby’s locks down $54M for 614 Sheepshead Bay Road

RXR, David Werner secure $1.4B refi for 5 Times Square

Cammeby’s releases new, detailed renderings of controversial Coney Island project

arrow_forward_ios