About 2 years ago when the MTA finances were looking real bleak, the agency had talked about selling 3 of the buildings they own next to Grand Central. The agency was looking to get approximately $150M for the building at 347 Madison Avenue & the 2 adjoining ones at 341 & 345 respectively.
At the time, I mentioned that I thought it was a terrible idea to sell the properties below market value as the rush to make a deal would not be a wise decision. Thankfully the sale never materialized which brings us to 2013. The agency is now looking to lease out the properties instead. Here is more via Judy Rife of the Times Herald Record:
The Metropolitan Transportation Authority, following through on a plan announced two years ago, will move from its Madison Avenue headquarters and lease the coveted location adjacent to Grand Central Terminal to a developer.
“This promises to help our bottom line in two ways, by reducing our office expenses and capturing much-needed revenue for our capital program,” said Aaron Donovan, an MTA spokesman.
The MTA has retained Cushman & Wakefield, one of eight commercial real estate companies that bid on the contract, to market the buildings at 341, 345 and 347 Madison Ave. Cushman is working on commission.
The request for proposals was given to developers June 25. Responses are due Aug. 14.
Donovan said the MTA expects the developer who secures the long-term lease will demolish the buildings, which occupy a full block between 44th and 45th streets, and redevelop the site with modern Class A offices or a hotel or residential tower or a mix of uses.
Demolition is anticipated because the three buildings cannot be combined and are replete with inefficiencies that prevent their conversion to modern office space. The oldest of the trio dates to 1917.
The developer will be required to maintain access to Grand Central, now an underground walkway from 347 Madison.
The MTA projects this effort to right-size its real estate portfolio, including the pending sale or lease of other, smaller properties, will generate $600 million in cost savings or new revenue.
Click here for the complete report.
Like I mentioned in 2011, real estate is all about location, location, location, especially in Manhattan. The agency is much better off leasing the properties as they retain ownership while making a lot more versus an outright sell. Hopefully whatever deal they strike will not only infuse the agency with a nice amount of money but lead to future profits as well. Time will tell on all of this.
xoxo Transit Blogger