The Real Deal New York

GDS planning 20-story office building on one of NoMad’s few unbuilt lots

Developer and European partner signed 99-year ground lease at 1241 Broadway
By Mark Maurer | April 13, 2018 11:15AM

1241 Broadway, Michael Kirschmann and Alan Rudikoff

1241 Broadway, Michael Kirchmann  and Alan Rudikoff

GDS Development is planning to build a 20-story office building on one of NoMad’s few vacant lots, for which it just signed a 99-year ground lease, The Real Deal has learned.

The site, located at 1241 Broadway at the corner of West 31st Street, currently serves as a parking lot. The 170,000-square-foot boutique development is slated to have a retail component at its base, sources said.

GDS is leading the development and receiving equity from an unidentified European publicly traded real estate investment firm that is making its first U.S. play, sources said. The partners intend to break ground on the site by early 2019, sources added.

The lessor is Harvey Drucker’s Drucker Associates, which has been the owner for the more than 40 years and continues to own the fee interest. The site’s parking operator vacated in late February.

A memorandum of lease from March shows the lease expires in 2117. That lease cites a recorded figure of $64 million, which sources said is incorrect. The upfront payment and annual ongoing payments were not immediately clear.

The lot sits next to O’Reilly’s Pub & Restaurant, and a block south of Greeley Square.

Eastdil Secured’s Brett Siegel, Evan Layne and Jeff Organisciak represented the seller. GDS and Eastdil declined to comment, and Drucker could not be reached.

NoMad’s on-site parking is largely in garages; the only other remaining parking lot in the neighborhood is located at 25-27 West 25th Street. There is also one at 80 West 24th Street in Chelsea.

Drucker, an office landlord in NoMad and Chelsea, sold a building last month at 9 West 29th Street for $54.3 million to HFZ Capital Group, which is finalizing an assemblage for its office skyscraper.

GDS, a Tribeca-based development firm led by Michael Kirchmann  and Alan Rudikoff, helmed a Soho condo conversion in 2016 and is now constructing a nine-unit condo at 500 West 25th Street in Chelsea.