Sherwood Equities, which helped kick-start the revitalization of Times Square in the 1990s, is looking to sell yet another piece of its portfolio in the area.
The company has put the 26,000-square-foot retail condo at the base of 2 Times Square up for sale, eyeing a price around $90 million, The Real Deal has learned.
The property, which sits at the intersection of Broadway and Seventh Avenue at the northern end of the Times Square “bow tie,” is fully leased with about 9 years of average term remaining on the leases, according to marketing materials. Olive Garden, the largest tenant, has a lease running through 2034.
The pitch for the retail is that the in-place rents are about 30 percent below the current market, which would give a new owner a chance to raise them as leases roll. Times Square asking rents increased the most of any retail corridor in the city last quarter, climbing 19 percent from the previous quarter to $1,995 per square foot, according to CBRE.
“The significant improvement in daytime foot traffic and the return of international tourists encouraged owners to reprice their spaces upward from prior levels,” the brokerage wrote in a retail report on the first quarter.
A representative for Sherwood did not immediately respond to a request for comment. A Newmark team led by Adam Spies and Adam Doneger is handling the sale process.
Sherwood, headed by CEO Jeffrey Katz, developed 2 Times Square in 1990 as the neighborhood was transitioning from its seedy past into its modern-day version of a neon-lit outdoor mall.
The building is wrapped in iconic digital signs seen around the world each New Year’s Eve when the ball drops. The ball actually stands on the building behind 2 Times Square, 1600 Broadway, which is also owned by Sherwood.
Two years ago Sherwood sold the retail space at 1600 Broadway — home to M&M’s World — for a little more than $190 million to a joint venture led by Paramount Global.
More recently, the company late last year sold the hotel portion of 2 Times Square for $165 million to a joint venture of Apollo Global Management and Newbond Holdings.
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Sherwood sells Times Square hotel for $165M