Toll, Equity Residential pay $134 million in year’s largest development deal
From left: Sam Zell of Equity Residential, Bob Toll of Toll Brothers, Will Silverman, Woody Heller, both of Studley, and 400 Park Avenue South
In the most expensive development site deal of the year so far, home builder Toll Brothers and real estate investment trust Equity Residential partnered in reportedly paying $134 million for a large development site at 400 Park Avenue South.
The joint venture plans to build a 40-story condominium and rental apartment tower at the Park Avenue South and 28th Street site, which has 400,000 square feet of development rights, the companies said in a statement.
Sam Zell’s Equity Residential will own and operate the lower 22 floors with 265 rental apartments and retail, while Toll Brothers will build and sell about 100 condo units on the upper floors, the Wall Street Journal reported.
The deal, which closed yesterday, is Manhattan’s most expensive development deal of the year, according to data from commercial research firm CoStar Group.
The sale price of $335 per square foot is just above the $301-per-square-foot average for sales of Manhattan development sites in the third quarter, according to Massey Knakal Realty Services data.
Studley’s Woody Heller and Will Silverman represented seller A&R Kalimian in the deal. There were no other brokers in the deal. The 20,000-square-foot parcel hit the market in May.
While a $134 million price tag seems small compared to Manhattan’s half-billion dollar office building trades, land is just one portion of the final cost, Silverman said.
“A $134 million site can quickly become a several-hundred-million-dollar project,” he said. “While the raw dollars are not as stratospheric as seen in the office sector, it still represents an enormous commitment of capital.”
The second-most expensive deal so far this year is Glenwood Management’s $125 million purchase from Fordham University of 49-55 Amsterdam Avenue, at 62nd Street, on the Upper West Side, according to CoStar.
Studley also brokered the largest development deal of the year last year, with CIM Group’s $305 million purchase of the former Drake hotel site at 440 Park Avenue.
Sources said the largest site on the market today is the 1.35 million square feet of development rights at Riverside South being marketed by commercial firm Holliday Fenoglio Fowler representing owner the Carlyle Group, which Real Estate Alert reported could sell for about $390 million.