Reuben Brothers pays $50M to Vornado for retail in Midtown West, part of $124M deal

Reuben Brothers through the entity 510 Fifth Propco LLC paid $50 million to Vornado Realty Trust through the entity 510 Fifth Avenue LLC for the retail building (O5) at 510 Fifth Avenue in Midtown West, Manhattan.
This is another building that is part of a $124 million portfolio sale between Vornado and Reuben Brothers including its $50 million purchase of three retail locations in SoHo, at 443 Broadway, 692 Broadway and 148-150 Spring Street, in three separate transactions. Reuben Brothers uses the name Motcomb Estates Ltd. for its property ownership.
The deal closed on August 10, 2023 and was recorded on August 22, 2023. The property has 57,223 square feet of built space and 68,277 square feet of additional air rights for a total buildable of 125,510 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $873 and the price per buildable square foot is $398 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The seller bought the property on October 8, 2010, for $57 million. The signatory for Vornado Realty Trust was Steven J. Borenstein. The signatory for Reuben Brothers was Eric S. Orenstein. The contract date was July 18, 2023.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Reuben Brothers purchased 11 properties in six transactions for a total of $150 million and has no record it sold any properties over the past 24 months.
The seller Vornado Realty Trust purchased one property in one transaction for a total of $40 million and sold 29 properties in 18 transactions for a total of $763.9 million over the same time period.

The property

The retail building in Midtown West has 57,223 square feet of built space and 68,277 square feet of additional air rights for a total buildable of 125,510 square feet according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 125 feet deep with a total lot size of 12,551 square feet. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The property is in the Individual Landmark. The city-designated market value for the property in 2022 is $32.4 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $350 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on February 4, 2013. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 4th highest sale turnover among other neighborhoods in the city with $2.7 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 17.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the seven commercial properties representing 2,863,582 square feet of the 3,787,904 square feet. The largest owner is Vornado Realty Trust, followed by Tishman Speyer and then Brookfield Properties.
There are no active new building construction projects on this tax block.

The majority, or 91 percent of the 3.8 million square feet of built space are office buildings, with specialty buildings next occupying 7 percent of the space.

The seller

The PincusCo database currently indicates that Vornado Realty Trust owned at least 54 commercial properties with four residential units in New York City with 15,117,010 square feet and a city-determined market value of $6.7 billion. (Market value is typically about 50% of actual value.) The portfolio has $5.5 billion in debt, with top three lenders as JPMorgan Chase, Goldman Sachs, and ING Capital respectively. Within the portfolio, the bulk, or 78 percent of the 15,117,010 square feet of built space are office properties, with retail properties next occupying 12 percent of the space. The bulk, or 97 percent of the built space, is in Manhattan, with Bronx next at 3 percent of the space.

The buyer

The PincusCo database currently indicates that Reuben Brothers owned at least four commercial properties with 121 residential units in New York City with 160,150 square feet and a city-determined market value of $87.8 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 85 percent of the 160,150 square feet of built space are hotel properties, with mixed-use properties next occupying 8 percent of the space. They are all located in Manhattan.

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