JLL Arranges $95M Loan for NYC Office Portfolio
- Jan 09, 2019
With the help of JLL Capital Markets, East End Capital and its partner, a private family office, recently secured financing for the acquisition and repositioning of three Manhattan office properties totaling 226,900 square feet. JLL orchestrated a $95 million loan for the partners through LoanCore Capital.
The group of assets includes 580 Eighth Ave., a 74,300-square-foot property developed in 1928. The 21-story tower sits in the Penn Plaza/Garment District submarket of Midtown, as does the portfolio’s largest asset, the 117,500-square-foot, 18-story showroom/office building at 251 W. 39th St., which first opened its doors in 1925. Completing the group is 36 E. 20th St., an eight-story property built in 1901 and featuring 24,000 square feet of space in Midtown South’s Gramercy Park neighborhood.
“As one of New York City’s premier real estate firms, East End is perhaps one of the most qualified operating managers to reposition these underperforming assets and execute the proposed business plan with its partner,” Jonathan Schwartz, managing director with JLL Capital Markets, said in a prepared statement. Schwartz was joined on the debt assignment team by colleagues Aaron Appel, Mark Fisher, Matt Collins and Patrick Cotter.
East End will helm the partnership’s repositioning of the three buildings, as well as the re-tenanting efforts. On average, the New York City commercial real estate market is thriving and in the office sector, the demand for premier office accommodations in Manhattan is very strong—still. In the third quarter of 2018, the vacancy rate dropped to 7.8 percent, marking a low not seen in the market since 2008, according to a JLL report. East End’s newly purchased properties are likely to be well received upon reintroduction.
“As job market indicators such as the unemployment rate and office using jobs reach cyclical lows and record highs, respectively, companies are investing more in employee attraction and retention while emphasizing workplace strategies. Manhattan office fundamentals have capitalized on these trends, causing the Midtown core vacancy rate to reach a 10-year low while Midtown South became the most supply-constrained CBD in the country,” per the JLL report.
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