Japanese Investor Says ‘Konnichiwa!’ to 370 Lex

An Art Deco office building located just one block from Grand Central Station finds Japanese buyer.

By Veronica Grecu, Associate Editor

370 Lexington Avenue - Manhattan
370 Lexington Avenue – Manhattan

Unizo Holdings, a Tokyo-based real estate investment firm, is the new owner of 370 Lexington Ave., a 26-story office building in Midtown Manhattan.

The Japanese company paid $247 million for the 295,016-square-foot property, which hit the market this summer. That’s around $52 million in profit for the selling entity, a joint venture between Sherwood Equities and JP Morgan Asset Management. According to Crain’s New York Business, Sherwood Equities purchased 370 Lexington Ave. for $155 million September 2008, just as Lehman Brothers collapsed and the economy was spiraling down. Sherwood went on to spend $24 million for the repositioning of the building for smaller office tenants, which proved to be a good strategy—since small tenants pay higher rents per square foot and have shorter leases, creating more turnover for the landlord.

The HFF investment sales team representing the seller was led by Senior Managing Directors Andrew Scandalios and Eric Anton and Director David Fowler.

“With an influx of foreign buyers widening the buyer pool and increasing competition for Class A assets such as 370 Lexington, it was no surprise that the property ultimately sold at a record breaking price per square foot,” said Scandalios. “This is the foreign investor’s fifth purchase in Manhattan in a little over two years.”

Built in 1929 by architects Moore & Landsiedel, the office building is located on the corner of East 41st and Lexington Avenue, close to the Park Avenue Corridor, Bryant Park, Midtown South, the United Nations, and the First Avenue Medical Corridor. The building was 99 percent occupied at the time of the sale. Its long list of more than 120 small tenants includes technology, advertising, media, and information technology firms such as Virtusa Corp., Travel Tripper, G4S Technology Software Solutions, PropertyShark, Commercial Property Executive and Multi-Housing News Online.

Image courtesy of Sherwood Equities