Feb 27 The cash-poor Metropolitan
Transportation Authority of New York in the next few months will
begin the process of putting its Madison Avenue headquarters in
midtown on the market by issuing a Request for Proposals, an
official said on Monday.
The MTA, which runs New York City's subways, buses, commuter
lines and key bridges and tunnels, owns three pre-war buildings
located next to each other on Madison Avenue between 44th and
"We expect to vacate possession of these buildings to a
developer in 2014 at the latest," Jeffrey Rosen, director of
real estate, said at a finance committee meeting.
Headquarters and business services workers would be
transferred to 2 Broadway in downtown Manhattan, which the
authority occupies under a net lease. This arrangement obliges
the Metropolitan Transportation Authority to pay rent, taxes,
repairs and the like.
How much the three buildings on Madison Avenue, whose
location is highly desirable because it is just two blocks west
of Grand Central Terminal, will bring depends on what air rights
are transferred to any new office tower expected to be built on
Selling the three buildings outright would generate at least
$150 million before taking into account the transfer of air
rights that would allow a developer to build a higher office
tower, the authority estimated in April 2011, when it first
announced the buildings would be sold.
New York City zoning laws would allow a "minimum zoning
floor area" of 376,575 square feet, the MTA estimated last year.
The maximum would be 542,268 square feet, although there might
be a possibility to acquire more air rights.
Rosen said the authority was planning to increase how much
the three buildings could fetch by offering a ground lease
instead of a sale. Under such an arrangement, the MTA would
lease the property, including the building, usually for many
At the end of the lease, the authority would become the
owner of the land and whatever was built at the site. That is
one reason why a ground lease could be more profitable than a
"We anticipate that a ground lease would yield substantially
more than a sale on a present value basis," the authority said
The authority will face at least one competitor when it puts
the three Madison Avenue buildings on the market.
Nearby 350 Madison Avenue also is for sale. The building, at
the southwest corner of 45th Street and Madison, is owned by
Kensico Properties and is being marketed by Jones Lang LaSalle
Kensico just completed an extensive renovation on the
25-story building, whose street-level retail tenant is men's and
women's clothing store Paul Stuart. The building is 76 percent