A google alert today says that the owner of a choice block --roughly one acre -- in midtown Manhattan might be ready to sell it. My browser seems to crash every time I try to read either of the two articles referring to it, but the property involved is a single block, a short walk from Grand Central Terminal, which, according to my research earlier in the year, was said last summer to be worth $400 million to $1.2 billion as a teardown. But the owners seemed to be satisfied with $15 to $20 million per year in operating profits from its current use. The property is about an acre.
$15 million annual on a $400 million property is not much of a return -- 3.75%. But it isn't bad while one waits for the taxpayers of NYS and NYC and the federal government, as well as the private sector's activities, to cause the land to appreciate. Covers the carrying costs, and employs a number of people! The city doesn't impose much of a tax on the land value. And so a year's appreciation could be significantly more than a year's operating profits! What a sweetheart deal we give to the owners of our choice urban land.
My previous post on the subject is here.
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