By Orlando Lee Rodriguez
Toll Brothers (NYSE: TOL) continues to expand its footprint in Manhattan with a $56.5 million year-end purchase of a 200,000 square foot site at 76-86 King Street in the historical Printing District.
The transaction was put together by a team from HPNY led by Ivan Hakimian and Kevin Esh. The current site is a two story garage that runs through from King Street to Charlton Street and has 160,000 square feet of air rights.
The former owners, according to HPNY, sold the property in order to avoid the prospect of paying higher capital gains taxes proposed in various ‘Fiscal Cliff’ compromises last year.
“It’s extremely difficult to get your hands on a 200,000 sq ft development site in the Soho area,” said Ivan Hakimian. “We worked on the deal for a long time and it came to fruition immediately before years end. It was a pleasure working along with Toll Brothers.”
This is the second major Manhattan pick up for Toll Brothers in three days. It comes on the heels of the company’s $64 million purchase of Alexico Group’s mired Midtown East development site on First Avenue near 53rd Street.
The area west of Varick Street from Houston to Canal Streets, once known as the Printing District, is currently zoned for manufacturing, but is widely expected to be rezoned for residential development. The local Community Board has already given its thumbs up to rezoning with a unanimous vote back in late October.
The plan has yet to be voted on by the city council, but a representative from Community Board 2 said via telephone that they anticipated the council voting on the measure “very soon.”
In addition to re-zoning, the changing of flood maps for lower Manhattan may be a concern for development of both new Toll Brothers sites, which sit one and three blocks from the East and Hudson rivers respectively.
Speaking at the annual New York State Society of Certified Public Accountants Real Estate Conference on Wednesday, Alan Silver, acquisitions manager for Toll Brothers City Living, said that the company has already anticipated the necessary changes, both in design and construction costs.
“A lot of the issues from Sandy were already addressed going forward and were built into our models for new construction,” he said. “The biggest issue we are seeing is that flood maps are going to change. There is enough demand in New York City that the additional cost will be absorbed.”
Toll Brothers, widely considered to be the largest luxury home-builder in the United States, first entered the Manhattan market with its ‘City Living’ concept back in 2006. It has since developed four apartment buildings in the city and has a heavy presence in Brooklyn and on the New Jersey waterfront. Thursday, Bank of America (NYSE: BAC) began coverage of the company’s stock, which has risen more than 13 percent in value since early December.