Tribeach Holdings, in partnership with Riu Hotels & Resorts, is seeking to buy 119,000 square feet in air rights above the historic Cort Theatre from the Shubert Organization for north of $400 per square foot, sources told The Real Deal.
The square footage would allow the Spanish hotel chain and the developer to grow their plans for a new Riu Plaza-branded hotel just south of the theater – from 27 to 48 stories and by nearly double the square footage.
The air rights deal is contingent, however, on a theater rehabilitation bonus in which Shubert would undertake substantial improvements and a historic restoration of the theater at 138 West 48th Street. The approval process is lengthy, as the City Planning Commission is not expected to act on the proposal until 2019, sources said.
At north of $400 a foot, the purchase price would come out to nearly $50 million.
The air rights would go toward the ground-up development of a Riu hotel tower at 145 West 47th Street. William Fegan’s Tribeach filed plans in April for a 27-story, 343-key hotel on a former parking garage site it had bought for $101.2 million last year. Sources told the New York Post last month that the hotel is slated to rise 48 stories instead.
A permit application filed with the Department of Buildings showed a square footage of 141,560. With the air rights, the hotel could instead span roughly 260,000 square feet.
The Riu brand is growing quickly in New York, after the first hotel opened just last year. Riu and Tribeach had also jointly developed the Hotel Riu Plaza New York Times Square, a 29-story, 647-key hotel at 301-307 West 46th Street.
Shubert, the largest landlord in Midtown’s Theater District, is expanding the Cort Theatre with the help of another recent air rights sale. The Rockefeller Group acquired 82,300 square feet of air rights from the theater in July for $41.1 million, or around $500 per square foot, property records show. As part of that deal, Shubert bought from Rockefeller a 25-foot-wide plot of land next to the theater that will be used in the renovation.
Shubert declined to comment, and representatives for Riu and Tribeach could not be reached.