Skip to main content

Everything revolves around the Shubert organization.

Since the Broadway landlord begins reopening its 17 Broadway theaters for the first time in 18 months during the COVID-19 pandemic, it is also receiving more than $ 82.3 million from a blockbuster real estate deal. Shubert recently agreed to sell two vacant lots on Eighth Avenue and the aerial rights over the Imperial Theater to a real estate developer, Extell Development Company.

The sale of the flight rights for $ 51,215,861 surpasses the previous record of $ 41 million set in 2017 when Shubert sold the air rights above the Cort Theater.

Previously, when the company was making millions of dollars out of thin air, its savvy accountants used a tax rule to defer paying capital gains taxes. When a company swaps the money it receives from the sale of a property for another property, it only pays property capital gains taxes when the second property is sold.

“By doing an exchange strategically, you can scale, [and] Diversification of your real estate portfolio according to property type and geographical location “, explained Jeff Rhode, a commercial real estate investor. The tax trick “offers a wide range of potential benefits,” he said.

Shubert has certainly diversified his real estate portfolio beyond Broadway theaters.

In 2017 the Broadway host exchanged the $ 17.1 million it received from the sale of aerial rights over the Majestic Theater for a Chase Bank branch and a Bank of America branch in Illinois. It also traded its revenue from other air rights deals for some McDonald’s and Kentucky Fried Chicken stores in Georgia.

While Shubert executives declined to discuss how the money from his major pandemic payday will be used, Extell acknowledged that the land and air rights will be used for mixed uses. The property developer has spent over $ 186 million since 2014 to assemble 11 lots on the site, and filings with the government suggest the new building will be built between Aug.

While Extell plans to lay the foundation stone for the site within the next year, it has promised to stop all construction during performances at the Imperial Theater next door. The $ 16.75 million musical Isn’t too proud Performances are scheduled to resume there on Saturday, October 16.

Shubert’s vice president of real estate, Julio Peterson, said the company is considered Construction of a new Broadway theater in this room over a decade ago. But after the 2007 economic downturn, Shubert abandoned his plans for the site.

Leave a Reply