The Real Deal Online reports: It was recently announced that Macklowe Properties entered into contract for the operating partner stake in the 108-unit apartment tower at 737 Park Avenue and 71st Street on Manhattan’s desirable Upper East Side. It is suspected that Macklowe plans to convert the now-rental property into luxury condominiums over time, as the roughly 30% of tenants currently enjoying rent-regulation leases cycle out. In the meantime, Macklowe could gradually combine units directly above or below each other to expand the average condominium size of 737 Park Avenue and boost per-square-foot sale prices. The rumored sale price of about $255 million would be, according to data recorded by Real Capital Analytics (RCA), the highest price paid for a single apartment building purchased for conversion since the well-heeled Apthorp traded on the opposite side of Central Park for $391 million in 2007. And if Macklowe decides to go ahead with the condo conversion scheme, it would be among the first to pursue such a strategy since the downturn began three years ago. Of this significant Manhattan-based deal, RCA’s Ben Carlos Thypin told The Real Deal that, “This is a litmus test [for whether] a condo conversion is a viable strategy for the next few years . . . This is a pretty bold move for [Macklowe].” Mr Thypin also expressed that he perceives the move as risky, since the purchase price reflects a high basis.
Real Capital Analytics, Inc.+1 212-387-7103Trouble Logging In?
5/11/2012 BusinessWeek:Twitter Pushes Office Rents Up
5/8/2012 ICSC:ICSC Awards Real Capital Analytics its Distinguished Research Partner Award for 2012
5/2/2012 Bloomberg:European Property Sales Down
4/27/2012 Bloomberg:Manhattan Apartment Prices Reach Peak Level