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Investment Opportunity Yielding 80% CAP Rate Summary: Manhattan > Park Avenue> East 60th Street Retail Building> New> Delivered Vacant> $35,000,000 Market Rental Price $35 Mill to $26 Mill CAP RATE 80% Initial investment $15 Mill Read on for details. For additional information please contact Strauss Cassel – 1-917-653-7887 – [email protected] 108 East 60th Street. Retail Space in Manhattan has become even more scarce and prices for rents and well as sales have broken all records, and will continue to do so. Why? Globalization has tacitly reached New York. The number of Tourists has exploded as well as the amount of money they spend. One simple example can be found by visiting the US Census Bureau website. From 2011 to 2014 there has been a tripling of both numbers of visitor to New York City and spending. • In 2014 visitors amounted to 56.4 Million and spending by this group tripled to 60 Billion USD. • Lastly, Manhattan is 22.4 square miles in all, and the area South of 96th Street to the End of Manhattan corresponds to the more affluent area and where large corporations are located. • This physical arrangement then is just a little more that 10 square miles, and this is the area where 60 Billion USD are spent. • Now, because of this enormous affluence of affluent people, New York is also experiencing a building BOOM. New Technology in construction now makes it economically viable to erect structures that reach in many instances 89 stories. This building height is a new occurrence that is enabling builders to sell apartments for as much as $220 Million Dollars and a great number in the $80 Million Range and an even greeter number in the $40 and $20 Million Dollar Range. • As a consequence the fabric of the population is also changing. The Mega Uber Wealthy Billionaires have arrived as well. • With the largest concentration of these buyers living and owning residences, along Central Park South, East and West 57th Streets. • Now, these extremely outsized purchasing power, is concentrated in the area north of 57th Street, along two corridors: • Madison Avenue and Lexington Avenues from 57th Street to 62nd Street, along Lexington Avenue, and from 57th Street to 78th Street, along Madison Avenue. • However the actual street that packs the most shopping power is 60th Street, between Park Avenue and Lexington Avenue. • Why? • 60th Street is the corridor used by millions of shoppers every years to go to and from the largest and most upscale Department Stores in Manhattan, Barney’s at 61st Street and Madison Avenue to Bloomingdale’s at 60th Street and Lexington Avenue. • These shoppers shopping the area in discussion are responsible for the bulk of the 60 Billion USD spending, and they pass in front of 60th Street and Park Avenue, at a rate of 12,500 every hour. Armed with credit cards and cash, visiting New York with wife, girlfriend, and children and bound to shop for garments that they don’t find back home. • 108 East 60th Street, New York, NY – is a retail building in the absolute epicenter of this activity. • An illustrative reference is to 108 East 60th Street as the Massai Mara River, and the millions of shoppers as the annual largest herd migration in the World. In other words, a retailer’s paradise. And by Association a Landlord’s Paradise. • The numbers are easy to follow. • Asking Price: $35,000,000. • Real Estate Taxes: $152,000 annually. • 13,700 SQFT of retail space to rent. • Rental values that have reached $3,890 per SQFT allow this building ample room to maneuver. • If a tenant was to pay $2,500 per SQFT that would bring in $34 Million in rents. • If the Tenant was to pay bellow market, example, $1,900 per SQFT it would bring in $26 Million in rental income per year. • And valuation for this building once fully rented, would skyrocket. • Please do your calculations. • Manhattan deals with CAP Rates of 4% are very desirable here. • The conversion to a new price is derived from a CAP rate of 4% • In this example, if net revenue is 34 Million to 26 Million then divided any one of these numbers by 4 and multiply by 100 and you get the new theoretical price Therefore in scenario 1 rent at 34 Million (divided by .04) = $850,000,00 • And in scenario 2 rent at 26 Million (divided by .04) = $650,000,000 The following additional data is available for review by request: 1. Detailed retail analysis report. 2. The following documents are • Of course only the market can tell you available: the clearing price, but without 3. Title Report question, an investor looking or yield, would gladly pay a price that is much 4. Recent Sales more than the current asking. 5. Recent Rentals • What has not been calculated yet is additional income that comes from a 6. Retail Analysis % of retail gross sales as additional 7. Demographic Date rent. Please call: Michael Strauss-Cassel • Many landlords, especially those that 1-917-653-7887 have what is termed a Tourist Trap Retailing Model, do charge a Email: [email protected] percentage of sales as additional rent. • An “inefficient” retailer in this location can experience gross sales over $221 Million. An “EFICIENT” one would do much better. The Benefits for a Retailer – The Tenant • An opportunity to create A BRANDED BUILDING in a location seen by the entire world (remember, enormous density, the highest in the world) • A Location that has the most buying power of any location in the World (think: 60 Billion USD spent in 11 square miles) • A location with a TOURIST TRAP RETAILING MODEL (look at the definition Google it, you will understand what it means). • AFFTACHED PLEASE FIND THE ORIFINAL BROCHURE. • THE BUILDING is being delivered vacant (ideal for a branded building, with a branded façade, like the “FAMOUS” Prada Building in Tokyo). • New Construction (All done, the additional work is almost all cosmetic). • Visiting the building is by appointment only, you are free to visit the 60th Street to make your own assessment, or use Google.com/maps. • All projections are approximations, based on gathered data from: the US Census Bureau, Google researching for key words “Retail Rents, Manhattan, record breaking”, and retail analysis conducted by Strauss Cassel, Inc. (SC5W.com) 108 EAST 60TH STREET (off Park Avenue), New York, NY For Sale Building 108 East 60th Street, New York, NY FOR SALE: Retail Building ASKING: $35,000,000 TAXES: $146,905 per year Retail Sqft.: 13,870 approx. Contact: Michael Strauss-Cassel Tel. 1-917-653-7887 Email: [email protected] New building, completed in 2005, features 20’x100’ floor plates with 15’ high ceilings, new elevator, a/c and gas heating. Steps from Bergdorf & Goodman, Barney’s, Bloomingdales, Chopard, Van Cliff & Arpel, Bulgari, Dior, and Hermes. An unbeatable location at the center of this incredibly active retail world. The building can serve up to 500 shoppers at the same time. The ideal location for any retailer, from appealer, to jewelry, to specialty gourmet foods. Make this your next mini Harrod’s. Visibility: Visibility is out of the charts, your retail operations will be seen by millions of people with the most enviable purchasing power in the world. You should know that in 2014, 56.4 million people visited New York and they spent $60 Billion USD shopping. New York City is barely 22 square miles, and retail space in Manhattan rents for the loftiest prices. Location, Location, Location Surrounded by Prada, Hermes, Dior, Chopard, Fendi, and all the other super luxury brands. Between the major luxury brand department stores, Bergdorf & Goodman, Barney’s and Bloomingdale’s The Building for Sale Park Ave and 60th St. Armani Hermes Prada Dolce & Gabbana The arrow points to the sector with the highest Shopping spending power in New York. This is where the very high end retailers are. And the building for sale at the center of this incredible Shopping district. In 2014, 56.4 Million people visited NY, and they spent $60 Billion USD, shopping. For additional information, please contact Michael Strauss-Cassel Tel.: 1-212-702-4027 – Email: [email protected] REAL ESTATE LISTING FOR SALE: Entire Building and Land LOCATION: Park Avenue and East 60th Street, New York, NY 10022 TYPE OF PROPERTY: SIZE: RETAIL LEVELS: LOT SIZE: ASKING PRICE: Zoning C5 commercial /retail, most permissive code. 13,870 SQUARE FEET APPROXIMATELY. Seven (7) retail levels. 20’ (feet) by 109’ (feet) built full plus extension possible. $35,000,000 (Thirty-Five Million USD). REAL ESTATE TAXES: Ideal use, Retail. Delivered Vacant $152,000.00 per year. Park Ave and 60th St., is the most profitable retail location in New York. It lays on the road to and from two of the most successful retail department stores, Barney’s and Bloomindale’s. Rents for prime retail space in NYC run from $3,980 x SQFT to $$1,300 per SQFT for raw space. Please call for more information: Michael Strauss-Cassel 1-212-702-4027 / 1-917-653-7887 Projected Income INCOME: Rental Income Rental Income Rental Income Rental Income Rental Income Rental Income Rental Income Special Note: Market less than market less than market less than market below market way below market way way below market Income Rentable Sqft $ 34,675,000.00 13870 $ 31,207,500.00 13870 $ 27,740,000.00 13870 $ 24,272,500.00 13870 $ 20,805,000.00 13870 $ 13,870,000.00 13870 $ 11,096,000.00 13870 Rent per Sqft 2500 2250 2000 1750 1500 1000 800 NOI $ 34,511,000.00 $ 31,207,500.00 $ 27,576,000.00 $ 24,108,500.00 $ 20,641,000.00 $ 13,706,000.00 $ 10,932,000.00 NOI The building is a single user owner, and it will be delivered vacant. Buyers need to make their own calclations with regards to income. The projections above are more than fair as retail rents in Manhattan have reached $3,870 per SqFt in prime locations, such as where this building is. Net Operating cost is computed are rents minus costs, or rent minus total expenses CAP RATE CAP RATE, Capitalization rate computed as Net Operating Profit divided by the Purchase Price CAP RATE 98.60% 89.16% 78.79% 68.88% 58.97% 39.16% 31.23% As you will see, this building is a unique opportunity to own a branded retail Building The Prada Building Tokyo, Japan The Tod’s Building The famous Dior Building Prada, Tod’s and Dior have branded buildings that are extensions of their respective brands. This offering at Park Ave and 60th St, has the potential of becoming a branded building that will be seen by millions of pedestrian traffic and the wealthiest tourism in the world. For additional information, please contact Michael Strauss-Cassel Tel.: 1-917-653-7887 – Email: [email protected] The orange arrow points to the building. Notice that the building is recessed from the lot line? Well, a glass curtain can be constructed to encapsulate the front façade and project it to the lot line, in line with the farthest building abutting this building. This alteration will brand the building and transform it into a retail icon, similarly to what Prada, Dior and others have done. Your design options are limitless, from glass, to cement to ornate, you decided. The perfect place to be seen, and best of all, a new steel structure in place able to support high loads with 15’ high ceilings. A blank canvas where you can build a masterpiece and expose it to the world from New York City. ATRIUM 5TH FLOOR 4TH FLOOR 3RD FLOOR 2ND FLOOR 1ST FLOOR SUB-LEVEL Park Avenue at East 60th St. as it currently stands, is a new building, with 15’ high ceilings, a commercial elevator, a new highbearing-load structure that can easily serve 500 shoppers simultaneously. A glass façade is an inexpensive cosmetic alteration. The building can be fully rented and producing in no time. Atrium: 5th floor 4th floor 3rd floor 2nd floor 1st floor Sub-level Note: a second sub-level and 3rd could be excavated to increase The retail working levels. We are currently investigating the possibility. At this level of investment, construction costs are secondary to increasing profitability. Excavating and reinforcing the structure is not a complicated Issue. Real Estate Business Proposal 108 East 60th Street, New York, NY – Sale of The building and the Land. Summary Asking Price: $35 Million USD. Real Estate Taxes: $152,000 per year. Financing: Available at 4% interest only for up to 70% of the purchase price. Total Carrying Costs: $92,000 per month (including real estate taxes, insurance, water and electric). Rental Income Potential: $34 million for market rent to $15 Million for rent well below market (See calculations that follow). This building is a great investment that will yield returns from day one. Rentable Space: 13,870 SqFt., approximate rentable space subject to minor alternations, costing approx, $425,000. CAP Factor (Capitalization Rate): 89% to 60% (Cap rate defined as, Net Operating Income divided by the Purchase Price of the building) for running the building as a landlord. As a retailer the rental income is used in lieu of Rents to calculate CAP Rate, and the numbers are way higher at 628% or 6.285 times the purchase price. This numbers are realistic, please see the model for calculations. Retail Gross Sales Annually: $221 Million USD estimated, see calculations. POS (Point of Sale Transaction): $700 estimated in model, see calculations. As a retailer, we have calculate gross sales for an average retailer to come in at $221 Million USD annually. CAPACITY: The building can serve 500 clients simultaneously. INTRINSIC VALUE: Visibility and branding are measured using the approach that advertising internet companies use, such as impressions or page views, in this instance traffic (pedestrian an motorized) can be measured and quantified, as the ability to brand the building. See assumptions and calculations in the modeling section. Please see the analysis section outlining calculation methods to derive these estimates. The location is ideal for retailers of all classes. This building is located on 60th Street, less than 75’ from Park Avenue. 59th and 60th St., at Lexington Avenue is the second most important transportation hub in Manhattan, with the 4, 5, 6, 6x, N, Q, and R subway lines and the BxM1, M101, M102, and M103 bus lines also connecting here. The hub provides transportation for millions of people working and living in the area. The area also hosts three major retail department stores, Bloomingdale’s on 60th Street and Lexington and Barneys is on 60th Street and Madison. Barney’s and Bloomindale’s are direct competitors of Bergdorf and Goodman, and the immediate area is also the most affluent retail sector in the country, with Hermes, Chopard, Armani, Valentino, Prada, Gucci, Tiffany, Bulgary, Van Cleef and Arpels, just to name a few. More Information on Retail Sales for this Area STRAUSS-CASSEL, Inc. conducted a retail market study for this area that revealed the following information: Apple: We believe Apple is experiencing annual gross sales of more than $700 Million at the 5th Ave., store, and $350 and $400 Million at the two downtown locations. Hermes: We believe that Hermes with two locations across from each other on Madison and 62nd St is comfortably experiencing sales in the $700 Million USD. As a side note Chopard a relatively new entrant in Manhattan, sells two (2) karat engagement diamond rings for $1,089,000, yes this information is correct, walk in the store and see for yourself. Pricing of merchandise is lofty and selling briskly. Hermes sells ladies’ purse from $15,000 to more than $60,000, Fendi, Dior, Chanel have average POS (Point of Sale, amount paid at the register) dollars well over $4,000 with conversion rates that exceed 50%. We believe that this building offering is an excellent investment based on the information we have collected. Retail space in NYC is at a premium and it will not come down, because as everyone knows, the number of tourists visiting NYC has trippled since 2011 and the amount of spending has also tripples. In 2014 NY received 56.4 Million people that spent $60 Billion USD. Manhattan is 22 square miles, and the premium shopping district is without question Park Avenue at 60th Street. Please contact STRAUSS-CASSEL at 917-653-7887 or email [email protected] 108 East 60th St. The district is home to the best hotels, The Plaza, The Pierre, Plaza Athenee, and St. Regis. The super-luxury shopping district. The Plaza District Manhattan Central Park This area is the preferred area of wealthy shoppers. STRAUSS CASSEL STRAUSS-CASSEL.COM / SC5W.COM TELEPHONE: 917-653-7887 EMAIL: [email protected] THE INFORMATION PRESENTED HEREIN IS FROM SOURCES DEEMED RELIABLE AND IS SUBJECT TO CHANGE IN PRICE, RENTAL, COMMISSION OR OTHER CONDITIONS, PRIOR SALE, LEASE OR FINANCING OR WITHDRAWAL FROM THE MARKET WITHOUT PRIOR NOTICE. NO REPRESENTATION IS MADE AS TO THE ACCURACY THEREOF. ALL MEASUREMENTS AND SQUARE FOOTAGE ARE APPROXIMATE. ALL RIGHTS TO CONTENT, PHOTOGRAPHS AND GRAPHICS ARE RESERVED. NOTHING HEREIN SHALL CONSTITUTE AN OFFER OR SOLICITATION WITH RESPECT TO THE PURCHASE OR SALE OF ANY PROPERTY IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR TO ANY PERSON TO WHOM IT WOULD BE UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. INVESTMENT. THIS DOCUMENT IS FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. ALL INVESTMENTS ENTAIL RISKS. THERE IS NO GUARANTEE THAT INVESTMENT STRATEGIES WILL ACHIEVE THE DESIRED RESULTS UNDER ALL MARKET CONDITIONS AND EACH INVESTOR SHOULD EVALUATE ITS ABILITY TO INVEST FOR A LONG TERM ESPECIALLY DURING PERIODS OF MARKET VOLATILITY. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT, PRODUCT, OR STRATEGY WILL OR IS LIKELY TO ACHIEVE PROFITS, LOSSES, OR RESULTS SIMILAR TO THOSE DISCUSSED, IF ANY. NO PART OF THIS DOCUMENT MAY BE REPRODUCED IN ANY MANNER, IN WHOLE OR IN PART, WITHOUT, PROPER CITATION OR PRIOR WRITTEN PERMISSION OF STRAUSS CASSEL GROUP, OTHER THAN TO YOUR EMPLOYEES.