NEW YORK CITY—An offer they couldn’t refuse has prompted Kushner Real Estate Group and Ironstate Development Co. to sell a 132,000-square-foot development site at 281 Fifth Ave. Victor Homes has acquired the site for $99 million in a sale that closed Monday and set a record for price per buildable square foot in the Madison Square Park neighborhood.
KRE had bought three adjacent buildings at the corner of Fifth and 30h Street from SK Properties in 2007, and spent the past few years acquiring air rights for what was going to be a 40-story luxury condominium apartment building, partnering with Ironstate this past winter. However, says KRE’s Jonathan Kushner, “Victor Homes built a beautiful building just a few blocks south at 241 Fifth Ave., and simply put, we felt comfortable making a deal with them and they offered us a price we couldn’t refuse.”
JLL’s Yoav Oelsner and Glenn Tolchin represented both sides in the deal, which reportedly came about after a casual conversation at an Upper East Side coffee shop as Kushner took his sons to breakfast a few months ago. KRE and Ironstate are partnering on a number of other projects outside New York City, including the 1.1-million-square-foot Hudson Lights in Fort Lee, NJ.
The sale is in keeping with the surge in popularity of developable land. At a Massey Knakal Realty Services media briefing in April, partner James Nelson, a blogger for GlobeSt.com, said that development sites’ share of the Manhattan investment sales pie went from 5% of the total number of properties sold in 2009 to 18% in the first quarter of this year. Pricing on parcels has increased by nearly two-thirds since ’09, he added.