Tishman Speyer signs 99-year ground lease with U.S. Postal Service for 600K sf in Chelsea

Tishman Speyer through the entity 341 Ninth Avenue, L.L.C. signed a 99-year ground lease with the U.S. Postal Service for 401 West 29th Street in Chelsea. The deal closed on October 1, 2019, and was recorded on October 7, 2019. The transaction consists of 1 parcel, including the tax class U.S. Post Office (Z3). The property is 1,600,000 square feet. The parcel(s) have total development potential of 1,600,000 square feet.

If the $20 million income stream to the U.S. Postal Service,  were calculated using a 5 percent capitalization rate, that would give the leased property a $1 billion valuation, according to a PincusCo estimate.

Tishman Speyer was the winning bidder for the leasehold on 600,000 square feet of the building, including all of floors five through 10, which it plans to redevelop into high-tech office space. The Post Office will continue to occupy the lower portion of the building, known as the Morgan General Mail Facility. Tishman will be paying about $19 million per year and tenants will pay about $100 per square foot, according to the New York Post.

Direct link to Acris document. link
Direct link to the city’s interactive property map, ZOLA. link
A recent story on the property. link.