Texas-based Thakkar Developers pays $8.5M to UBS for office ground lease in Midtown West

Thakkar Developers through the entity TD 135 West 50 LLC paid $8.5 million to UBS Realty Investors through the entity 135 West 50th Street Lessee LLC for the ground lease that controls the office building (O4) at 135 West 50th Street in Midtown West, Manhattan. The expected use is cash flowing. The fee is owned by Safehold Inc., and is not impacted by this transaction.
The deal closed on October 8, 2024 and was recorded on October 10, 2024. The property has 865,759 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $9 per the PincusCo analysis, however that is just for the ground lease and does not take into consideration the fee. (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.)

This is Thakkar Developers first purchase in New York City.
The signatory for UBS Realty Investors was Thomas Pierandri. The signatory for Thakkar Developers was Veena Thakkar. This is the sale of a ground lease. Safehold Inc. owns the fee.

The New York Times reported on the auction in August. “UBS Realty turned to a two-day, public online auction on Ten-X, a real estate auction site.”

The rent is $800,000 per month, according to Yahoo news and others, or $9.6 million per year.

The Real Deal first identified the Thakkar family’s Thakkar Developers as the buyer. Thakkar Developers, based in McKinney, Texas just north of Dallas, describes itself as a real estate consulting firm, but the company CEO Poorvesh Thakkar told The Real Deal, “We will definitely do something creative.”

UBS bought the ground lease in 2006 for $332.5 million, and then bought the fee in 2012 for $279 million. Then in December 2019 it sold the fee to Safehold Inc. for $285 million, while signing a new 104-year lease as tenant valued at $221 million, which expires December 31, 2123. That lease was sold to Thakkar Developers.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Thakkar Developers had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller UBS Realty Investors had not purchased any other properties and sold five properties in five transactions for a total of $172.8 million over the same time period. The 865,759-square-foot property generated revenue of $62.6 million or $72 per square foot, according to the most recent income and expense figures.

The property

The office building in Midtown West has 865,759 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 290 feet and is 200 feet deep with a total lot size of 48,200 square feet. The lot is irregular. The zoning is C6-6.5 which allows for up to 12 times floor area ratio (FAR) for commercial The city-designated market value for the property in 2022 is $332.7 million. The most recent loan totaled $106.9 million and was provided by AIG on December 9, 2019.

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 two DOB violations and $14,710 in OATH penalties in the last year.

Development

On the lot, there is one active major alteration construction project, 121205427, for a 722,226 square-foot B building. The project was submitted by Andrew Halder with plans filed June 7, 2019 and permitted December 10, 2019.

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 2nd highest sale turnover among other neighborhoods in the city with $2.9 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 27.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 36 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the two commercial properties representing 2,828,659 square feet of the 2,828,659 square feet. The two identified owners are Rockefeller Group and Ubs Realty Investors.
There are no active new building construction projects on this tax block.

All properties are office.

The seller

The PincusCo database currently indicates that Ubs Realty Investors owned at least two commercial properties in New York City with 881,610 square feet and a city-determined market value of $340.9 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 98 percent of the 881,610 square feet of built space are office properties, with retail properties next occupying 2 percent of the space. They are all located in Manhattan.

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