Vornado pays $12M to McDonald’s in Garment District, may expand adjacent 475-unit dev site

Vornado Realty Trust through the entity 265 West 34th Street Owner LLC paid $12 million to McDonald’s Corporation through the entity McDonald’s Real Estate Company for the retail building (K1) at 490 Eighth Avenue in the Garment District, Manhattan. The expected use is ground up development.
The deal closed on March 19, 2026 and was recorded on March 24, 2026. The property has 9,400 square feet of built space and 37,990 square feet of additional air rights for a total buildable of 47,370 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,276 and the price per buildable square foot is $253 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 McDonald’s Corporation was Bruce Neumann . The signatory for Vornado Realty Trust was Steven J. Borenstein . The contract date was March 19, 2026.

Vornado purchased this property, which will likely be used to expand the footprint of its development site, an adjacent site at the corner of Eighth Avenue and 34th Street. Crain’s New York reported that Vornado planned to construct a 475-unit rental building, costing $350 million to build, at 480 Eighth Avenue.

As part of the sale transaction, McDonald’s signed a lease to occupy a condominium unit in the building once it is constructed, and also McDonald’s has a purchase option to buy that condominium unit.

In fact, McDonald’s bought 490 Eighth Avenue in 1987 through a purchase option included as part of a 1973 lease it signed when it first opened the location. PincusCo calculated the 1987 purchase price was $575,000, according to an analysis of transfer records. That price is not confirmed. PincusCo does not locate any development plans filed with the city’s Department of Buildings for the corner or for the McDonald’s parcel.

Prior sales, articles and revenue

Prior to this transaction, PincusCo has records that the buyer Vornado Realty Trust purchased five properties in four transactions for a total of $378.1 million and sold 16 properties in six transactions for a total of $1.7 billion over the past 24 months.
The seller McDonald’s Corporation purchased one property in one transaction for a total of $3.4 million and had not sold any properties over the same time period. The 9,400-square-foot property generated revenue of $897,230 or $95 per square foot, according to the most recent income and expense figures.

The property

The retail building in Garment District has 9,400 square feet of built space and 37,990 square feet of additional air rights for a total buildable of 47,370 square feet according to a PincusCo analysis of city data. The parcel has frontage of 47 feet and is 100 feet deep with a total lot size of 4,737 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $4.8 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 $1,300 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 Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has the 10th highest sale turnover among other neighborhoods in the city with $1.4 billion in sales volume in the last two years. For development, Garment District is the 5th most active neighborhood among other neighborhoods. It had 11.1 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. There were 37 pre-foreclosure suit filed among other retail buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of 21 of the 27 commercial properties representing 2,022,864 square feet of the 2,262,329 square feet. The largest owner is Circle Realty Group, followed by Jenel Real Estate and then Kaufman Management Company.
On the tax block, there were three new building construction projects totaling 196,772 square feet. The largest is a 300-unit, 157,517 square-foot hotel/dormitory/shelter (R-1) building submitted by Chetrit Group and filed by Meyer Chetrit with plans filed April 5, 2016 and permitted August 21, 2017. The second largest is a 27,048 square-foot business (B) building submitted by Churchill Real Estate Holdings and filed by Jake Borden with plans filed April 26, 2016 and permitted December 10, 2018.

The majority, or 75 percent of the 2.3 million square feet of built space are office buildings, with hotel buildings next occupying 16 percent of the space.

The seller

The PincusCo database currently indicates that Mcdonald’S Corporation owned at least two commercial properties in New York City with 6,502 square feet and a city-determined market value of $2.1 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are retail properties. They are all located in Brooklyn.

The buyer

The PincusCo database currently indicates that Vornado Realty Trust owned at least 58 commercial properties with four residential units in New York City with 16,313,029 square feet and a city-determined market value of $7 billion. (Market value is typically about 50% of actual value.) The portfolio has $8.5 billion in debt, with top three lenders as JPMorgan Chase, Goldman Sachs, and Morgan Stanley respectively. Within the portfolio, the bulk, or 74 percent of the 16,313,029 square feet of built space are office properties, with retail properties next occupying 11 percent of the space. The bulk, or 92 percent of the built space, is in Manhattan, with Queens next at 5 percent of the space.

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