New Thirteen-Story Mixed-Use Fifth Avenue Building Available ($35MM), Midtown, NYC

09-Jul-2022

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An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

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25k sf (2k sf ground floor retail, 15k sf office condos on floors 2-9, 8k sf residential on floors 10-13, and one roof top terrace and entertainment space)

Zoning: C5-2, 20ft frontage on Fifth Avenue  

This is a new thirteen story 25k sf mixed-use Fifth Avenue building with flexible zoning (retail, office, and residential) available for sale ($35MM).  It was originally planned as an owner-occupied headquarters for an overseas owner who decided not to relocate their office to NYC. The building has never been occupied and all facilities, generators, and other equipment (sprinkler system, fire alarms, fire pump) are still new.

There are nine office floors (15k sf) with partitioned offices, boardrooms, and executive rooms, and four residential floors (8k sf) with fully equipped kitchens and outdoor terraces.  The four residential floors can be combined into one quadraplex or partitioned into individual apartment units.  Special building features include a grand entry marble lobby with double-height ceilings and a spacious waiting area.  A roof top terrace offers incredible city views including a direct view of the Empire State Building.

The property is located in one of the top real estate areas in Manhattan with Fifth Avenue frontage and just blocks from Flatiron, Penn Station, Empire State Building, and Koreatown. The property is conveniently located a few blocks from multiple transit stations (M, B, D, F, N, Q, R, W, and 6 lines).

The site’s prime location is suitable for various asset type uses including hotel, residential condos, retail, and office.  The best uses for the property is as an owner-occupied corporate office, as an Airbnb type hotel with a restaurant in the ground floor retail space or as a fully renovated residential condo building. 

This is a perfect commercial real estate asset for a passive investor to acquire and lease up as an inflation hedging commercial and residential rental income generator.  The property is also ideal for the single owner occupier who value the strategic location along the famous NYC midtown Fifth Avenue neighborhood.

Value Proposition This is a unique investment opportunity to acquire a never occupied property that is already built in an incredible location with fifth avenue frontage.  Renovating and leasing up this mixed-use thirteen story office and residential condo building with a high-end restaurant/wine lounge on the ground floor retail located in the heart of midtown Manhattan’s tourist and business district is a recipe for a successful investment. 

Control of Land and Current Status
The property is owned and controlled by a long-term passive owner.  The long-term holder is willing to negotiate a discount to the full market value of the property in return for a quick close.     

Economic Trends Favor Mixed-Use Assets as a Long-Term Investment NYC is the leading financial and business capital of the world and a major transit hub which draw business, residential housing and lodging demand from domestic and international visitors and workers.  As a mega-city NYC benefits from many positive long-term economic forces such as diverse job creation, tourism growth, and business travel which will continue to lead to strong housing and lodging demand.   The headquarters of major global and domestic companies in media, high fashion, entertainment, business services, and finance are all located in the surrounding area. 

** Using comparable sales in the area we derive the following fair market value for the property:

$35MM-$38MM   

Using current market rates, we project the following cash flows and valuations using cap rate model:

Office projections: 15k sf (60% of asset mix), NOI $975k, Exit Cap Rate 5.65% = $17.3MM MV

Residential rental projections:  8k (32% of asset mix), GI $632K, NOI $474K, Exit Cap Rate 4.3% = 11MM MV

Retail projections: 2.5k sf restaurant / wine bar: $160/sf (8% of asset mix) = NOI $400K, Exit Cap Rate 6% = $6.4MM MV

Total Sum of Parts MV = $34.7MM

*This asset is a high-quality investment opportunity in midtown Fifth Avenue and near major transit lines

Oxstones Real Estate, www.Oxstones.com  CRE@Oxstones.com

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