21st-Century Makeover Eyed for 1920s Manhattan Tower
- Oct 24, 2019
An office property located in a prime Manhattan corridor has changed hands for the first time in its history. A joint venture between Tribeca Investment Group and funds managed by PGIM Real Estate and Meadow Partners secured the Textile Building, a 700,000-square-foot mid-rise in Midtown South, through a 99-year ground lease. The previous owner was Manhattan Properties, according to Yardi Matrix. A spokesperson for the buyer declined to reveal terms of the deal.
Located at 295 Fifth Ave., the 17-story building was completed in 1921 to include a 400,000-square-foot textile showroom, still in use by the industry today. The property also has 30,000 square feet of street-level retail.
CBRE’s Darcy Stacom, Bill Shanahan and Doug Middleton acted on behalf of Manhattan Properties in the transaction. Duval & Stachenfeld LLP, Goodwin Procter and Davis Polk & Wardwell LLP provided legal services for Tribeca Investment Group, PGIM and Meadow Partners, respectively.
A strong submarket
The new owners intend to capitalize on demand for the area’s office inventory, which has increasingly drawn tech companies seeking modern space in historic properties. The joint venture will spend $300 million to reposition the building into a Class A asset. Plans call for a new lobby, modernized retail storefronts, additional amenity spaces and significant mechanical upgrades, as well as a glass-enclosed rooftop area.
According to a third-quarter office report from Cushman & Wakefield, Midtown South is experiencing a historic year for leasing. The submarket has registered 5.6 million square feet of absorption so far this year, a 10 percent increase year-over-year. In the past quarter alone, leasing hit nearly 2.7 million square feet, a quarterly high.
Three major lease transactions, each in excess of 100,000 square feet, drove the strong numbers. Those deals included Google’s 1.3 million-square-foot lease in Hudson Square and Publicis Group’s 960,000-square-foot renewal and expansion at 375 Hudson St.