Crunching The Numbers On RFR’s Church Mission Office Conversion

On a recent evening we got a peek inside RFR’s 281 Park Ave South. JLL’s Mitch Konsker’s marketing the 45k SF landmarked building, along with a retail leasing team from the landlord, RFR Realty, headed up by Jordan Claffey. Snapped: Mitch on the roof at 281 Park Avenue South. Mitch says the roof could be converted to useable outdoor space for tenants. 

Mitch tells us the team’s only interested in renting to a single user and is seeking out a TAMI tenant or financial services user like a hedge fund, which could use the ground floor for marketing, retail or offices at the building, which originally housed the offices of the Federation of Protestant Welfare Agencies. Three users are in talks for the space, Mitch tells us—all TAMI tenants. The asking rent is $110 per SF, with the retail-ready portion on the ground floor factored into the number. 

Considering what’s happening in the Flatiron's multifamily market, the choice to go with an office conversion stands out. For some perspective: the average price per SF for condos in the Flatiron District in Q4 ‘15, per Trulia, was $1,744. That would give the building, which RFR paid $50M for a little over a year ago, a $78.5M sellout as a condo conversion. By that math, it would take just about the full term of a 15-year lease to a single tenant taking the whole building to hit that number.

But it would likely fetch even more as a condo conversion, considering what’s in the area. Case in point: 212 Fifth Ave, another historic building converted to condos in the same neighborhood, has asked between $2,500 and $4k per SF.

Why go office, then? According to Mitch, “There’s nothing else like this available in Manhattan."