The Reel

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Massey Knakal Realty Services has been retained on an exclusive basis to arrange for the sale of the leased fee interest at 119-125 Madison Avenue and the adjacent 27-29 East 30th Street. The property is improved by a pair of elevatored apartment buildings totaling 125 rental apartments and 9 commercial units.

The tenant has a 49 year, 11 month lease expiring February 28, 2038 with the option to convert the two buildings to cooperative apartments. In this event, the lease would extend another 150 years from the conversion date, and the owner of the leased fee interest would receive a “conversion premium”: a lump sum payment currently set at $4,475,000 that increases as the lease expiration date nears. The in-place annual lease payment would remain the same, but increase $75,000 every 10 years rather than the current escalation rate of $50,000 every 5. Lastly, the converting sponsor would be required to give 20% of the net profits from the sale of each cooperative share to the landlord, allowing the landlord to realize additional gains under this scenario.

Click here for listing details.

Neighborhoods: Murray Hill/ Agents: John Ciraulo