Sedesco pays $77.5M for office building to next to supertall dev site in Midtown West

Developer Sedesco through the entity Bob 57 Development, LLC paid $77.5 million to Patrick Hotung through the entity Prospect Resources Inc. for the office building (O6) at 37 West 57th Street in Midtown West, Manhattan.
The deal closed on April 24, 2023 and was recorded on April 27, 2023. The property has 69,649 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $1,112 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 signatory for Patrick Hotung was Patrick Hotung. The signatory for Sedesco was Derek Gilchrist. Patrick Hotung is a Buffalo real estate investor perhaps related to a Hong Kong real estate dynasty. This property adds to a development Sedesco already began working on at 41-47 West 57th Street. The Real Deal reported on this acquisition earlier this week.

Before the new acquisition, Sedesco won approval for a bonus to facilitate the construction of a 443,087-square-foot mixed-use building with 119 residential units and 158 hotel rooms at 41-47 West 57th Street in Midtown.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Sedesco had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Patrick Hotung had not purchased any other properties and had not sold any properties over the same time period. The 69,649-square-foot property generated revenue of $4.1 million or $58 per square foot, according to the most recent income and expense figures.

The property

The office building in Midtown West has 69,649 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 58 feet and is 100 feet deep with a total lot size of 5,856 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 city-designated market value for the property in 2022 is $18.1 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 $80 in OATH penalties in the last year.

Development

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 5th highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Midtown West is the 2nd most active neighborhood among other neighborhoods. It had 15.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 21 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 17 commercial properties representing 2,237,731 square feet of the 2,531,170 square feet. The largest owner is Vornado Realty Trust, followed by Solow Realty & Development.
On the tax block, there was one new building construction project filed totaling 36,423 square feet. It is a 15-unit, 36,423 square-foot residential (R-2) building submitted by Solow Realty & Development and filed by Anthony Calicchio with plans filed December 30, 2016 and permitted January 24, 2018.

The majority, or 80 percent of the 2.5 million square feet of built space are office buildings, with hotel buildings next occupying 9 percent of the space.

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