Successful Sale of 855-873 Avenue of the Americas in NoMad, Manhattan
Bob Knakal successfully closed the sale of a major development site at 855-873 Avenue of the Americas in Manhattan’s NoMad and Herald Square neighborhoods. This complex assemblage involved seven properties, totaling 333,806 buildable square feet, and was sold for $117,500,000, or $352 per buildable square foot.
The deal was nominated for the Real Estate Board of New York’s (REBNY) Most Ingenious Deal of the Year Award in 2006 due to the creative solutions employed to overcome significant obstacles.
Sale Details
The development site, totaling 333,806 buildable square feet, sold for $117,500,000. The use of the Wall Street technique to resolve the deadlock and the successful coordination of multiple property sales were key factors in bringing this deal to fruition.
Sale Price: $117,500,000
Seller: Bernstein Family, Lavin Family
Buyer: Confidential
Seller Type: High-Net-Worth Investors
Property Type: Development Site
Sale Date: February 10,2006
Property Details
The development site consisted of multiple properties, including 855-873 Avenue of the Americas and additional properties along West 31st Street. The assemblage created a total of 333,806 buildable square feet, making it a prime opportunity for a large-scale development in the NoMad and Herald Square areas.
The properties included air rights from a fully occupied 6-story office building, which posed a significant challenge during contract negotiations.
Full Address: 855-873 Avenue of the Americas, New York, NY 10001
Zoning: Development
Property Type: Development Site
Buildable Square Footage: 333,806 square feet
Sale Price: $117,500,000
Overcoming the Impasse: A Wall Street Technique in Real Estate
The transaction began with the sale of a single building, 867-873 Avenue of the Americas, which was being sold by the Lavin Family to an owner/user. However, the deal eventually expanded into a much larger land assemblage, taking over two and a half years to complete.
The most significant challenge occurred when a key seller, who owned a fully occupied 6-story office building, refused to sell his air rights in the event of a casualty, as he would then develop the property himself.
To break the deadlock, Bob Knakal introduced a creative solution using a Wall Street technique—a “put” and “call” option. This allowed the parties to agree on terms in the event of a casualty during the contract period.
The key to the solution was getting both parties to agree to the mechanism and establishing a fair price for the options. After setting the option prices, Bob’s team was able to convince the owner of the corner property at 855 Avenue of the Americas to sell outright, further simplifying the assemblage.
Key Components of the Transaction
The deal included multiple property sales and the transfer of development rights (TDRs), each of which contributed to the successful completion of the assemblage:
- Sale of 867-873 Avenue of the Americas
- Sale of the fee position under ½ of 867-873 Avenue of the Americas
- Sale of 859-865 Avenue of the Americas (3 buildings)
- Sale of 106-108 West 31st Street
- Sale of TDRs from 855 Avenue of the Americas
- Sale of the fee position of 855 Avenue of the Americas
The complexity of the transaction required innovative problem-solving and extensive negotiation, but Bob Knakal’s team was able to structure the deal in a way that maximized value for all parties involved.
Neighborhood Overview
The NoMad and Herald Square areas of Manhattan have experienced substantial growth and development over the past two decades.
Prime locations for new construction projects due to:
- Dynamic neighborhood appeal.
- High demand for development sites.
Assemblage of 855-873 Avenue of the Americas:
- Represented a unique opportunity for large-scale property development.
- Sold for $117,500,000.
- Reflects strong interest in sites with substantial air rights and buildable square footage.
Conclusion
The sale of 855-873 Avenue of the Americas demonstrates Bob Knakal’s creativity and persistence in navigating complex real estate transactions. By applying innovative strategies, including the use of a put-and-call option, Bob and his team were able to overcome significant obstacles and successfully complete the assemblage.
The transaction, nominated for REBNY’s Most Ingenious Deal of the Year Award, showcases Bob’s ability to find solutions in even the most challenging deals, maximizing value for his clients.
Testimonial
“Bob Knakal’s creativity, ingenuity, and persistence made this deal happen. Without him, this never would have become a reality. Any seller of land should rely on his expertise!”
– Asher Bernstein, Bernstein Real Estate
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