260 W 36th St.
Retail | 81,375 SqFt
Marketing description
BKREA has been retained on an exclusive basis to arrange the sale of 260 West 36th Street (“The Property”), a remarkable 9- story office building. The property has a lot area of roughly 7,266 SF and is located on the south side of West 36th Street. It is just two blocks north of Penn Station, Madison Square Garden, and the newly renovated Penn District.
Constructed in 1907, 260 West 36th Street has a total of 102,611 RSF and features 73.58 feet of frontage along West 36th Street. The Property is currently in an M1-6 zoning district (in the Special Garment Center District), but is located in the proposed Midtown South Mixed Use (MSMX) rezoning area. If approved, the Property would be rezoned to M1-9A/R10, allowing up to 18 FAR for residential use (inclusive of MIH) and 15 FAR for commercial.
At present, 260 West 36th Street has a weighted average lease term of approximately 2.26 years and an occupancy rate of 59%, with cancelation clauses built into the leases for 260 West 36th Street. Given the existing vacancy at 260 West 36th Street, a potential investor could add value by renovating and leasing the vacant floors. Furthermore, the Property represents a potential covered land play, where an owner can collect existing cash flow while going through the planning process for a conversion.
Due to the 41% vacancy rate of 260 West 36th Street, there is also potential for redevelopment with several possible schemes or sold as part of a larger redevelopment site along with 500 and 516 8th Avenue.
We have consulted with esteemed architects and zoning specialists to understand the full possibility of a conversion. This resulted in multiple potential development schemes. Along with 260 West 36th Street, 500 8th Avenue offers an outstanding opportunity for value-add investors or developers looking to capitalize on the strong demand drivers in the Midtown neighborhood.
The property is strategically located near the Penn District and Hudson Yards, catering to office tenants who want to be close to mass transit. It could offer walk-to-work convenience for future residential tenants in area is filled with excellent dining options, shopping outlets, and Madison Square Garden, which hosts several events throughout the year. Additionally, the Property is in a proposed rezoning area where it is on the precipice of a massive increase in the development potential of up to 34 stories and contains a total floor area of 401,656 SF, not including TDRs from 260 West 36th Street
Investment highlights
- Value add potential: future investors could renovate and lease up the existing vacancy floors.
- Covered land play: there are different strategies allowing investors and developers to earn existing cash flow while going through the planning process for a redevelopment.
- Assemblage of major substantial blockfront frontage: along with 260 west 36th street, 500-516 8th avenue offers an astounding 197.5 feet along the eastern side of 8th avenue.
- Ample transportation available: within walking distance to the property are several transportation hubs which service 1,2,3,a,c,e, the lirr and nj transit.
- Favorable midtown location: the property is located near several fortune 500 companies, popular restaurants and retail establishments.
- Multiple potential rezoning to development schemes: due to the favorable m1-9a / r10 zoning a developer may have several options of conversions.
- Ability to deliver vacant: cancellation causes are in place in all the leases of 260 west 36th street, allowing asset to be delivered vacant.
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