Howard Hughes pays $40M to city for air rights in Financial District

Howard Hughes Corporation through the entity 250 Seaport District, LLC paid $40 million for air rights from the City of New York for its skyscraper 250 Water Street, in the Financial District, Manhattan.

Howard Hughes filed plans under the job number M00632762, for a new building calling for a 399-unit, 546,975 square-foot residential (R-2) building submitted on December 8, 2021.
The deal closed on August 1, 2024 and was recorded on August 12, 2024.
The Real Deal reported that Howard Hughes recently overcame two potential barriers, the first being a court challenge from a preservationist group, and the second the state’s extension of the 421a completion date to June 2031.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Howard Hughes Corporation had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller City of New York purchased six properties in one transaction for a total of $11.2 million and sold seven properties in five transactions for a total of $154.5 million over the same time period.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received $625 in ECB penalties and $11,475 in OATH penalties in the last year.

Development

For the tax lot buildings, one out of the four buildings received a initial certificate of occupancy in the last ten years. On these lots, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 770,419 square feet. The largest, 121185350, is a new building project for a 242,074 square-foot M building submitted by NYC Economic Development Corporation and filed by Richard Cote with plans filed April 8, 2014 and permitted June 8, 2015.

The neighborhood

In Financial District, The majority, or 74 percent of the 79.9 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Financial District has the 4th highest sale turnover among other neighborhoods in the city with $2.6 billion in sales volume in the last two years. For development, Financial District is the 3rd most active neighborhood among other neighborhoods. It had 10 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

On the tax block of 95 South Street, PincusCo has identified the owners of eight of the eight commercial properties representing 577,781 square feet of the 577,781 square feet. The identified owner is City Of New York.
On the tax block, there was one new building construction project filed totaling 242,074 square feet. It is a 242,074 square-foot mercantile (M) building submitted by NYC Economic Development Corporation and filed by Richard Cote with plans filed April 8, 2014 and permitted April 29, 2015.

The majority, or 52 percent of the 577,781 square feet of built space are retail buildings, with specialty buildings next occupying 48 percent of the space.

The seller

The PincusCo database currently indicates that City Of New York owned at least 2,811 commercial properties with 236 residential units in New York City with 151,359,042 square feet and a city-determined market value of $33.4 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 91 percent of the 151,359,042 square feet of built space are specialty properties, with office properties next occupying 4 percent of the space. The bulk, or 39 percent of the built space, is in Brooklyn, with Bronx next at 23 percent of the space.

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