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Rick's Cabaret Strikes New Realty Deal for New York Club

Rick's Cabaret Strikes New Realty Deal for New York Club
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Oct 25, 2013 3:30 PM PDT    Text size: 

HOUSTON — Rick's Cabaret International has called off its $23 million real estate deal to purchase the club it operates, as well as all of the building's valuable air rights, on West 33rd Street in New York.

Instead, it has signed another option agreement to purchase the club and some of the air rights by September 2018 for $10 million, less a $750,000 deposit. In the meantime, the option agreement includes provisions that hike Rick's Cabaret's rent at the Manhattan club to $100,000 per month until June 2018.

Rick's Cabaret, in a statement made to the SEC today, said that the termination of the $23 million deal came about when a third party purchased from the property owner, Regent 33rd Corp., a large portion of air rights in a multimillion-dollar deal.

"The purchase price for these air rights was $13 million, of which Rick's Cabaret International Holdings contributed $5.2 million in connection with the overall business transaction," Rick's Cabaret said in a statement. "Use of all the air rights and future development of the property are subject in part to the terms of a zoning lot development and easement agreement between regent and the third-party purchaser."

Last December, Rick's Cabaret CEO Eric Langan in December said that the original deal, if completed, would have give the company an additional bonus — air rights to build an additional 52, 000 square feet in New York. Langan estimated those air rights to be as much as $300 and $350 a foot at the time. 

At post time, Rick's trades at $11.31 a share on the Nasdaq, up 3 cents.

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