12-Story, Midtown South Mixed-Use Loft Property

Description:

Ariel Property Advisors has been retained on an exclusive basis to sell 118-120 West 27th Street.

Located between Sixth and Seventh Avenue, the property lies within the proposed Midtown South Mixed-Use Plan (MSMX) area and benefits from a central location with arguably the best transportation in the world. Once re-zoned, this area is poised to become one of the most dynamic and sought-after areas of New York City.

The property is a 12-story, 37.5’ wide, mixed-use building that has undergone an intensive renovation program to convert the upper 11 floors to residential use.

The program to obtain a residential CofO was launched in 2010. At present, 81% of this legalization program has been completed at a cost of $8,600,000.

• New mechanicals, including a new gas-fired boiler with hydronic heat, new plumbing, upgraded electric service – 1,200 AMPs, new meter bank and panels, new life safety systems, two upgraded elevators, and a building intercom system with key card access have been installed
• 7,281 sf, spanning three floors, have been converted to 5 luxurious two-bedroom apartments renting at an average of $75/sf ($8,000 - $8,750/mth).
• An additional 1,320 unit is vacant and a First Rent can be set upon completion of the building legalization program.
• 7,948 sf on Floors 4, 5, 6 have been white-boxed and are ready for conversion. An additional 1,436 sf of office space at the rear of the second floor is vacant, gutted and ready for conversion.
• There are 5 IMD units spanning 9,615 sf. – 1 of the IMD tenants sold their IMD rights. On vacancy, this full-floor unit could be split into two Free Market apartments.
• The 2,532 sf retail space is vacant and currently marketed for lease.

The residential zoning proposed under the MSMX plan would allow for conversion of the 9,384 vacant commercial space on Floors 4,5,6 and the rear of 2 to residential use (This path to convert the remaining commercial had been lacking to date, as the current M1-6 zoning will not allow residential use as-of-right).

The incentives found in the newly minted 467-M tax incentive program, combined with the zoning reforms under City of Yes, allow for efficient conversion of the existing 3.5 floors of vacant office space (9,384 sf approx.).

A ruling on a Tax Appeal proceeding is pending and is expected to result in significant real estate tax savings.

118-120 West 27th Street represents a tremendous opportunity to take over a conversion project (where most of the onerous and expensive work is already complete) and benefit from the MSMX rezoning to complete the conversion of the property into a luxurious mixed-use building.

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