ARC NYRR to Buy Office Building in Midtown Manhattan from SL Green for $220M
- Jul 02, 2013
American Realty Capital New York Recovery REIT Inc. has agreed to acquire the office building at 333 W. 34th St. in Midtown Manhattan from SL Green Realty Corp. for $220.3 million, exclusive of closing costs, ARC announced Monday.
The 10-story, 347,000-rentable-square-foot, Class A property, completed in 1954 and since renovated, is fully leased to four tenants: The Segal Co. (Eastern States), the Metropolitan Transportation Authority, Godiva Chocolatier Inc. and Sam Ash New York Megastores L.L.C.
The sale will be all cash and is scheduled to close in 30 days, a spokesperson for the buyer told Commercial Property Executive.
“This purchase was made below replacement cost, will increase our portfolio asset value to almost $700 million and reflects our continuing efforts to construct a portfolio of premium New York City real estate,” Michael Happel, the non-traded REIT’s chief investment officer, said in a release.
The Jones Lang LaSalle New York Capital Markets team represented SL Green in this transaction. That team comprised Richard Baxter, Jon Caplan, Yoron Cohen, Scott Latham, Glenn Tolchin and Anthony Ledesma, according to a JLL source.
After posting about 909,000 square feet of negative absorption in the first quarter, the Midtown Manhattan office market bounced back with three consecutive months of positive absorption totaling 1.9 million square feet, according to brand-new mid-year figures from Cassidy Turley.
And rents continue to hold strong in Midtown. At the high-end of the market so far this year, 29 leases have been signed with starting rents $100.00 per square foot or higher, a substantial increase from 34 such leases in all of 2012, according to Cassidy Turley. The increase in demand for high-end space pushed Class A asking rents up $0.66 per square foot to $77.62 in the second quarter.
The purchase of 333 W. 34th St. extends a spate of activity by ARC and its affiliates.
On June 3, CPE reported on the purchase by American Realty Capital Trust IV of a $1.45 billion portfolio of 986 retail properties from GE Capital — and also on the purchase by American Realty Capital Properties of a GE Capital portfolio of 471 net-lease properties, for $807 million.