Michael Shvo is back……and this time he is returning as a developer, having partnered with an established developer to buy the LUKOIL/GETTY gas station (reported fist here, btw….). Shvo, with developer Victor Homes, beat out competitors to acquire 239 Tenth Avenue, a gas station site at Tenth Avenue and West 24th Street overlooking the High Line.The property was listed for $18.95 million, but the partnership paid well over the asking price in a heated bidding war settling at $23.5 million – or a record-setting $800 per buildable square foot. Supposedly they are out shopping for additional air rights, although it seems doubtful they can build up in that location as there are pretty strict heigh restrictions for the neighborhood. Positioned diagonally opposite Cary Tamarkin’s 508 West 24th Street and a few doors down from Adam Gordon’s 560 West 24th Street (and 200 Eleventh Aveue), this block is developing into West Chelsea’s PRIME block.
While the brokerage community is aflame with snide and hate-filled comments about the return of Shvo, surely the owners of 245 Tenth Avenue are celebrating the demise of what was the number one de-valuer of that building…..those owners have just added 15-20% of value to their building thanks to Shvo. So what are the lessons to be learned here?
1) You can be loathed throughout the industry and return (having lots of cash to do so helps): this industry is extremely forgiving and forgetful.
2) Nothing is forever, not even the gas station that everyone said the owners would never, ever sell. Many had tried before and failed.
3) $ 800 per buildable square foot is the new $ 500 per buildable square foot. That 60% escalation happened quickly! Too quickly?
4) Only time will tell: what pricing will this property have to command to absorb the land acquisition costs PLUS the de-contamination costs (we have heard the site has lots of spillage) PLUS building costs PLUS marketing costs (Shvo is not cheap).
Tick, tick, tick, tick…..