West Village Episcopal church extends building lease
St. Luke's School will continue to occupy 487 Hudson St., a property it plans to invest $25 million to expand.
The Church of St. Luke in the Fields has completed a deal to continue leasing a portion of its block-size West Village campus to St. Luke's School.
The renewal for 487 Hudson St. was done at a discounted rate to help facilitate the school’s operations and its expansion while also providing the church with a long-term income stream, said Stephen Powers, a broker with Denham Wolf who helped arrange the deal. He declined to disclose the rent but said the market value for a 49-year lease for a site of this size would be about $100 million, with about $2 million in annual rent.
" Manhattan schools generally pay between 50% and 75% of market value when they have a shared mission component," he said.
The deal puts St. Luke's School, which offers curricula from pre-K to 8th grade, on a favorable financial footing as it embarks on a $25 million plan to add two floors. The project will enlarge the structure, located at the corner of Christopher and Hudson streets, by 50%, to about 60,000 square feet.
St. Luke's School had been operated operated by the Episcopal church but was split off into a separate entity in 2012. The new lease extends the school's hold on the building.
"We wanted to enable the school to become a mature institution that stood on its own two legs," said the Rev. Caroline Stacey, who has been the church's rector since 2005. "We wanted to set them up to do more than survive, but thrive."
The Church of St. Luke in the Fields owns the entire block bordered by Christopher, Greenwich, Hudson and Barrow streets, a parcel that has become extremely valuable.
Mr. Powers along with Paul Wolf, the co-president of brokerage Denham Wolf, specialize in working with nonprofits and religious institutions. In addition to the St. Luke's school deal, the two brokers recently arranged a 99-year lease of a parking lot on the block at 100 Barrow St. to Toll Brothers. Toll Brothers will build a 75,000-square-foot residential co-op building on the site, 20% of which will be affordable. The developer also leased four neighboring townhouse properties as part of that deal, which it will refurbish and convert into market-rate rental units.
Source: Crain's New York
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