452 FIFTH AVENUE

NEW YORK, NY 10018

Joseph Harary
Joe Mann
David Salamon
Jack Shalom
-------------------Professor Letdin

452 Fifth Avenue

Location
&
Background

Building Location
On West 40th Street and 5th Ave
On Southwest corner of 40th
Street
Combined with 10-story
landmark Beaux-Arts Knox

Building
Midtown Neighborhood

Source: Google maps

Building History
Built in 1902, altered in 1982-1984
Combined the landmark Edward Knox Building (John H.
Duncan)
Produced by Studios Architecture
Architect/Designer: Eli Attia
Architecture Technique: International Style II using Victorian
Faade

Source: crainsnewyork.com

Tenants

Baker & Mckenzie

HSBC
Man Investments
NCH Capital
R.W. Pressprich
VTB Capital
Wood Mackenzie

(Owner: IDB Group and PBC

Corp)

Source: 452fifthave.com

Property Transaction History

Property History
Event
Deed Transfer Recorded

Amount

Date
$330,000,000

Buyer

452 Fifth Owners LLC

Seller

Property Owner (USA) LLC

4/13/2010

Source: PropertyShark

452 Fifth Avenue

Demographics
&
Neighborhood

Midtown Demographics

Asian=13.7%
African American=6.6%
Hispanic=5.8%
White=70.4%
Other=3.6%
Total Population: 54,634
47% Male, 53% Female
Average Members Per Household: 1.67
Median Age: 36.92
Average Household Income: $132,397
Blue Collar Employees: 18,423
White Collar Employees: 112,751
Source: Zillow.com

Midtown East Crime Statistics

Very rarely are there very violent crimes
The crimes that do happen are usually targeted towards
tourists
Per capita crime rate is 723 major crimes
per 10,000 residents (including tourists)
The crimes are usually pickpocketing
Zillow.com

The Area

Plaza Hotel
Bryant Park
Rockefeller Center
Times Square
Central Park
5th Avenue Shopping
New York Public Library

Buildings in the Area

Empire State Building
Chrysler Building
Metlife Building
Helmsley Building
Many More

Famous Restaurants in
Midtown

Alto (53rd Street)

La Fonda Sol (44th Street)
Le Bernardin (51st Street)
21 Club (52nd Street)
The Modern (53rd Street)

Nycgo.com

Transportation
Three blocks away from Grand Central Terminal
(Served 50 million passengers so far in 2012)

Easy to catch a cab

8 Buses: M1, M2, M3, M4, M42, M101, M102, M103
5 Subway Lines: 4,5,6,7, S (shuttle to Times
Square)

Metro North: Hudson Line, Harlem Line, New

Haven Line, New Canaan Branch, Danbury Branch,
MTA.info
many, many more

452 Fifth Ave

Comparable
Properties

Comparable Property 1
Location: 711 Third Avenue
(Between 44th & 45th St.)
Owner: SL Green Realty Corp.
Total Square Feet: 546,299
Use: Commercial
Vacancy: 78,184 SF or 14.31%
Tenants: Crain Communications,
Inc., KPR, Newport News, Inc.,
Parade Publications, Sovereign
Bank, Taylor & Francis Group
LLC

Comparable Property 2
Location: 125 Park Ave
(Between 40th & 41st St.)
Owner: SL Green Realty Corp.
Total Square Feet: 604,245
Use: Commercial/Retail
Vacancy: 169,229 or 28%
Tenants: Chase, Canon,
American Express, Lexis Nexis,
Phillip Morris, Starbucks

Comparable Property 3
Location: 535 Madison Ave
(54th & Madison)
Owner: Park Tower Group
Total Square Feet: 502,319
Property Type: Commercial
Vacancy: 23,318 SF or 5.25%
Tenants: Wells Fargo Advisors,
Morgan Keegan Investment Firm,
Canaccord Genuity, Kobe Steel
USA

Comparable Property 4
Location: 625 Madison Avenue
(Between 58th & 59th St.)
Owner: SL Green Realty Corp.
Total Square Feet: 542,368
Use: Commercial
Vacancy: 69,660 or 12.84%
Tenants: Baccarat, Bergdorf
Goodman, Fratelli Rossetti,
Neiman Marcus, Polo Ralph
Lauren, Stuart Weitzman,
Swarovski

Comparable Property 5
Location:100 Park Avenue
(Between 40th & 41st St.)
Owner: SL Green Realty Corp.
Total Square Feet: 887,489
Use: Commercial
Vacancy: 37,297 or 4.2%
Tenants: BDO Seidman, Wells
Fargo, Aecom Technology,
Ameriprise, Aetna

Commercial
Market Report
2012 for Midtown

Midtown Commercial Market Report

Class A Market Report (Midtown)

2Q 2012

3Q 2012

Leasing Activity

4.75

3.3

Absorption

-0.01

0.09

Availability Rate

13.00%

13.10%

Vacancy Rate

8.40%

8.30%

Average Asking Rent

$72.17

$72.70

Source: www.cresa.com/newyork

Midtown Commercial Market Report

452 Fifth Ave

History
&
Pictures

View from 40th Street Side

View Looking South, on Fifth Ave

View of Library Across the Street

View from Corner of 40th & 5th Avenue Looking

Out From Building Corner

View Looking East from

East 40th Street Entrance

View Looking South

From 5th Ave

Bryant Park

View looking West from 40th

Street

View Inside the Lobby

452 Fifth Ave

CASH
FLOW
ANALYSIS

Assumptions

452 Fifth Ave

PRO FORMA INCOME STATEMENT ASSUMPTIONS
Building Address:

452 Fifth Ave

Real Estate Taxes:

NY, NY 10018

$6,769,227 Tax Bill

$7.82 per sq. ft.

Insurance:

1.50%

Total Floors:

29

Management Fee:

5% of EGI

Total Square Feet:

616,352

CAM:

$4 per sq. ft.

Current Vacancy:

7.48%

Lease Types:

NNN

Market Vacancy:

8.4%
Discount Rate:

3.50%

Mortgage Rate:

3.50%

Utilities

1,700,000

Adminstrative Fees

175,000

Holding Period:

5 Years

Current Rent:

$75.00 per sq. ft.

Market Rent:

$72.01 per sq. ft.

Rent Increase:

4%

Source: PropertyShark

Pro Forma Income Statement

Potential Gross Income

Year 1

Year 2

Year 3

Year 4

Year 5

Base Rental Revenue

$35,730,900.00

$35,977,320.00

$48,465,187.70

$50,403,795.20

$52,419,947.01

Expense Reimbursement Revenue

$10,159,162.70

$10,159,162.70

$10,159,162.70

$10,159,162.70

$10,159,162.70

Total Potential Gross Income

$45,890,062.70

$46,136,482.70

$58,624,350.40

$60,562,957.90

$62,579,109.71

$3,432,576.69

$3,451,008.91

$4,385,101.41

$4,530,109.25

$4,680,917.41

$42,457,486.01

$42,685,473.79

$54,239,248.99

$56,032,848.65

$57,898,192.31

$2,465,408.00

$2,465,408.00

$2,465,408.00

$2,465,408.00

$2,465,408.00

$924,528.00

$924,528.00

$924,528.00

$924,528.00

$924,528.00

Utilities

$1,700,000.00

$1,700,000.00

$1,700,000.00

$1,700,000.00

$1,700,000.00

Real Estate Taxes

$6,769,226.70

$6,769,226.70

$6,769,226.70

$6,769,226.70

$6,769,226.70

Management Fee

$2,122,874.30

$2,134,273.69

$2,711,962.45

$2,801,642.43

$2,894,909.62

$175,000.00

$175,000.00

$175,000.00

$175,000.00

$175,000.00

Total Operating Expenses

$14,157,037.00

$14,168,436.39

$14,746,125.15

$14,835,805.13

$14,929,072.32

Net Operating Income

$28,300,449.01

$28,517,037.40

$39,493,123.84

$41,197,043.52

$42,969,119.99

Vacancy & Collection Loss

Effective Gross Income

Operating Expenses
CAM & Related
Insurance

Administrative & Marketing

Expenses as a % of EGI
Expense Ratio

Year 1

33%

Year 2

33%

Year 3

27%

Year 4

26%

Year 5

26%

Purchase & Sale Price

452 Fifth Ave

PURCHASE AND SALE PRICE
Going in Cap Rate:

6%

Exit Cap Rate:

7%

Year 1 NOI:

$28,300,449.01

Year 5 NOI:

$42,969,119.99

Purchase Price:

$471,674,150.17

Sale Price:

$613,844,571.29

Mortgage Amortization Table

452 Fifth Ave

MORTGAGE AMORTIZATION SCHDEULE
Purchase Price:
Down Payment:

$471,674,150.17
$100,000,000.00

Loan-To-Value:
Loan Amount:

79%
$371,674,150.17

Interest Rate:
Term:

3.5%
30 Years

Month
1
2
3
4
5
.
55
56
57
58
59
60

Starting Balance
371,674,150.17
371,140,650.39
370,605,594.56
370,068,978.16
369,530,796.62
.
340,521,584.04
339,897,222.60
339,271,040.11
338,643,031.26
338,013,190.71
337,381,513.13

Payment
(1,617,549.39)
(1,617,549.39)
(1,617,549.39)
(1,617,549.39)
(1,617,549.39)
.
(1,617,549.39)
(1,617,549.39)
(1,617,549.39)
(1,617,549.39)
(1,617,549.39)
(1,617,549.39)

Interest
1,084,049.60
1,082,493.56
1,080,932.98
1,079,367.85
1,077,798.16
.
993,187.95
991,366.90
989,540.53
987,708.84
985,871.81
984,029.41

Principal
(533,499.78)
(535,055.82)
(536,616.40)
(538,181.53)
(539,751.23)
.
(624,361.43)
(626,182.49)
(628,008.85)
(629,840.55)
(631,677.58)
(633,519.97)

Ending Balance
371,140,650.39
370,605,594.56
370,068,978.16
369,530,796.62
368,991,045.39
.
339,897,222.60
339,271,040.11
338,643,031.26
338,013,190.71
337,381,513.13
336,747,993.16

Net Cash Flow Statement

452 Fifth Ave
NET CASH FLOW STATEMENT
Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Down Payment

(100,000,000.00)

Cash Flow

28,300,449.01

28,517,037.40

39,493,123.84

41,197,043.52

42,969,119.99

Debt Service

(19,410,592.68)

(19,410,592.68)

(19,410,592.68)

(19,410,592.68)

(19,410,592.68)

CFADS

8,889,856.33

9,106,444.72

20,082,531.16

21,786,450.84

23,558,527.31

Sale

613,844,571.29

Mortgage Pay-Off

(368,991,045.39)

NET CASH FLOW

(100,000,000.00)

8,889,856.33

9,106,444.72

20,082,531.16

21,786,450.84

268,412,053.21

18,113,292.49

18,985,633.25

225,995,746.46

NET PRESENT VALUE

PV Cash Flows

(100,000,000.00)

8,589,233.17

8,500,963.59

NPV:

$180,184,868.97

IRR:

25.98%

Citations
"452 5 Avenue, New York, NY 10018." PropertyShark. N.p., n.d.
Web. 05 Dec. 2012.
"452FifthAvenue." 452FifthAvenue. N.p., n.d. Web. 05 Dec. 2012.
"Crain's New York Business." Latest from Crains New York
Business. N.p., n.d. Web. 05 Dec. 2012.
"Explore NYC Hotel Options." Nycgo.com. N.p., n.d. Web. 05
Dec. 2012.
"Google Maps." Google Maps. N.p., n.d. Web. 05 Dec. 2012.
"Manhattan Bus Schedules." Home Page. N.p., n.d. Web. 05
Dec. 2012.
"Market." Cresa New York. N.p., n.d. Web. 05 Dec. 2012.
"Midtown Demographics." Zillow. N.p., n.d. Web. 05 Dec. 2012.
"PropertyShark Logon." PropertyShark Logon. N.p., n.d. Web. 05
Dec. 2012.