Highlights
500 8th Avenue • Block / Lot: Block 785 | Lot 1 • Submarket: Garment District • Zoning: M1-6 / GC • Historic District: No • Year Built: 1922 • Stories: 13 • Elevators: 7 • Lot Dimensions: Lot Frontage 172.5 ft Lot Depth 94 ft 516 8th Avenue • Block / Lot: Block 785 | Lot 82 • Submarket: Garment District • Zoning: M1-6 / GC • Historic District: No • Year Built: 1931 • Stories: 3 • Elevators: N/A • Lot Dimensions: Lot Frontage 25 ft Lot Depth 100 ft
Description
BKREA has been retained on an exclusive basis to arrange the sale of 500 8th Avenue and 516 8th Avenue (“The Property”), a remarkable 13-story office building, and adjoining 3-story commercial building. The property has a combined lot area of roughly 22,348 SF and occupies the entire easterly blockfront of 8th Avenue between West 35th and West 36th Street. It is just two blocks north of Penn Station, Madison Square Garden, and the newly renovated Penn District. Constructed in 1922, 500 8th Avenue has a total of 278,910 RSF and features 172.5 feet of frontage along 8th Avenue, 94 feet on West 35th Street, and 24 feet on West 36th Street. 516 8th Avenue was built in 1931 and has a total RSF of 9,000 RSF. 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 12 FAR for residential use (inclusive of MIH) and 15 FAR for commercial. At present, 500 8th Avenue has a weighted average lease term of approximately 4.15 years and an occupancy rate of 64%, while 516 8th Avenue has a weighted average lease term of approximately 1.04 years and an occupancy rate of 100%. Given the existing vacancy at 500 8th Avenue, 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 36% vacancy rate of 500 8th Avenue, there is also potential for redevelopment with several possible schemes. We have consulted with esteemed architects and zoning specialists to understand the possibilities for a conversion fully. This resulted in three potential development schemes. In Scheme A, floors 12 and 13 of 500 8th Avenue would be partially demolished and convert to residential use, the third floor of 516 8th demolished, and the newly available floor area relocated in the form of a vertical enlargement up to 27 stories and containing 335,202 SF of floor area. In an alternative Scheme B, the developer would relocate the tenants on floors 10 through 13 and then partially demolish and convert these floors to residential use. And as before, relocate all of the newly available floor area as a vertical enlargement; in this case up to 28 stories and containing 335,161 SF of floor area. In Scheme C, similar to Scheme B, the proposal involves the partial demolition and conversion of floors 10 through 13, but also imagines that the project would seek the Subway Improvement Special Permit, which provides for a 20% increase in floor area. To capitalize on this, a developer would need to go through the ULURP process to unlock the potential for purchasing this bonus floor area. This Scheme results in a building up to 34 stories and containing a total floor area of 401,656 SF. 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 development potential.
Listing Details
- Tenancy
Multi
- Space Type
office
- Sub Category
executive
- Date Listed
10/29/2024
Property Specifics
- Property Name
500-516 8th Avenue
- No of Buildings
2
- Building Size
250,850 SF
- Lot Size
22,348 SF
- Zoning
M1-6 / GC