Columbia Expands NYC Portfolio With $514M Office Buy
- Oct 13, 2017
Columbia Property Trust Inc. has acquired 245-249 W. 17th St., two adjoining fully leased Class A office buildings in New York’s Chelsea submarket, and 218 W. 18th St., another Class A office building in the area. New York REIT sold the assets for an aggregate price of $514 million.
The 245-249 W. 17th St. properties encompass 281,294 square feet and currently house Twitter’s New York headquarters and 218 W. 18th St. consists of 165,670 square feet. While Twitter’s headquarters represents most of the boutique buildings on 17th Street—which include a six-story western tower and 12-story eastern tower that features one of the largest showrooms of the high-end modern furniture chain Room & Board—the nearby 12-story building on 18th Street houses the New York City headquarters of Red Bull, along with several other office tenants.
“The W 17th and 18th buildings are fully-modernized, institutional-quality assets with attractive historic architectural appeal, fully leased on a long-term basis to well-regarded tenants such as Twitter, Red Bull and Room and Board,” Nelson Mills, Columbia’s president and CEO, told Commercial Property Executive. “The W 17th and 18th buildings are squarely located in the path of this migration, with tenant rosters that demonstrate the neighborhood’s breadth of appeal.”
According to Mills, neither of the properties have any near-term capital needs, since both have been fully and attractively renovated in recent years.
Earlier this year, Columbia Property Trust acquired 149 Madison Ave., a 127,000-square-foot Manhattan office building, following an extensive program of asset sales by the REIT.
“We have been very selective in our underwriting process over the past year, as always, in order to find the right opportunities in our target markets,” Mills added. “The leasing success we’ve experienced at our nearby properties, particularly 315 Park Avenue South, demonstrate Midtown South’s strong and resilient demand, in contrast to some other Manhattan submarkets. The W 17th and 18th buildings in particular are distinctive assets among their competitive set.”
Columbia now has seven Class A properties in the area, comprising a total of 2.6 million square feet. That figure represents 44 percent of Columbia’s overall portfolio based on gross real estate assets.
“These assets complement our current Manhattan portfolio in size, location and tenancy and give us a ‘critical mass’ of high-quality, Class A assets in Midtown South, further strengthening Columbia’s position as a major institutional owner and manager in the submarket,” Mills added. “Chelsea is increasingly benefiting from the south- and westward migration of tenants in Manhattan and appeals to both TAMI and more conventional tenants alike,” concluded Mills.
Photo courtesy of Columbia Property Trust