ATCO-Migdal JV Snags Manhattan Office High-Rise
- Nov 01, 2017
ATCO Properties & Management has formed a joint venture with Israeli-based Migdal Group on the shared ownership of 240-246 West 35th St., an 18-story office building in the Garment District.
Under terms of the partnership, ATCO will retain a 51 percent majority ownership interest in the property, while Migdal will hold the remaining 49 percent interest.
“As part of our growth objective, we’ve been seeking institutional partners with a shared mindset,” Neil Adamson, ATCO Properties & Management’s senior vice president, told Commercial Property Executive. “Migdal’s investment approach aligns very well with our New York City investment thesis, and we are excited about this partnership.”
The 165,000-square-foot building boasts a tenant roster of Cablevision-owned media group Newsday; leading fashion design Jason Wu; award-winning men’s fashion and eyewear designer Thom Browne; technology company Fidelus Technology; the Spanish American Institute; and high-end bridal designer Reem Bridal.
ATCO originally acquired the Manhattan office building in December of 2016 for $108 million, which was its first purchase in the Garment District and the 12th acquisition in ATCO’s City Center Real Estate Program since 2012.
“We are core-plus value-add owner/operators in New York City and from the onset, we thought the property was quite attractive,” Adamson said. “The property needed some deferred maintenance and we believed it would benefit from a lease-up program that we are well positioned to implement given our vertically integrated platform. For us, the opportunity was perfect and allowed us to do what we believe we do well.”
Since that time, ATCO has completed numerous capital improvements in the building, including renovating the lobby, upgrading the common corridor, improving the tenant relationship service and making sidewalk improvements. Currently, an elevator upgrade/modernization is underway.
Surging Midtown West location
The property is ideally situated in the heart of 35th Street, between 7th & 8th Avenues, and just steps away from Penn Station and Herald Square.
“The building also has unique attributes that we simply could not ignore. It is in the path of growth in New York City and also where we believe a major shift of the center of gravity of New York City is moving,” Adamson said. “It is probably from a public transportation perspective, better located than many other buildings in Manhattan. Additionally, you’re less than 10 minutes away in any direction from major commuter lines coming out of Westchester, Long Island and New Jersey. You have access to almost the entire New York City subway system, Penn Station, Grand Central and Port Authority is only a few blocks away.”
ATCO presently owns and manages more than 35 buildings ranging from high-rise office and residential towers to one-story industrial structures and high tech flex buildings, including notable Manhattan properties such as 555 Fifth Ave., 40 Central Park South, 41 West 58th St., 630 Third Ave., 381 and 373 Park Ave. South.
Image courtesy of ATCO Properties & Management