HFF Orchestrates Sale, Financing for ‘New Kid on the Block’ in Manhattan

HFF worked both sides of the deal in the change of ownership of a new luxury apartment property in downtown Manhattan.

HFF worked both sides of the deal in the change of ownership of The Nathaniel, a new 85-unit luxury apartment property in downtown Manhattan. YYY Third Avenue L.L.C., an affiliate of Joy Construction Corp., relied on HFF to facilitate the sale, while Wafra Residential Value Invest I L.P., a fund managed by Wafra Investment Advisory Group Inc., turned to the commercial real estate and capital markets services provider for help securing financing for its $98.3 million acquisition of the residential and retail property.

Sited at 138 E. 12th St. in Greenwich Village, The Nathaniel is the new kid on the block, having just welcomed its first occupants in 2014. Designed by Karl Fischer Architect, the nine-story tower also features 10,000 square feet of ground-level retail space and an 8,000-square-foot below-grade retail component occupied by Westside Market NYC.

At the closing of the sale, The Nathaniel was already 85 percent leased and a full house cannot be too far off, given the current market conditions. While the downtown vacancy rate crept up a wee bit year over year in January 2015, it was still an enviable 2.76 percent, according to a report produced by Miller Samuel Inc. for Douglas Elliman Real Estate.

Times are really good for Manhattan apartment property owners. From January 2014 to January 2015, the median rental price increased 5.9 percent, marking an 11th consecutive year-over-year gain, per the report. Wafra was just one of many investors who was attracted to The Nathaniel. HFF was not at liberty to comment on the transaction, but an industry source told Commercial Property Executive that the combination of new rental construction, prime location and a grocery-store anchor garnered broad interest from both domestic and foreign institutional investors. And the lending community was just as charmed. Ultimately, a large banking and financial service institution provided Wafra with the acquisition financing.

HFF senior managing director Andrew Scandalios was among the team that represented the seller in the transaction, and managing director Steven Klein joined director Jennifer Keller in spearheading debt placement on behalf of Wafra.