Kaufman Closes $35M Manhattan Ground Lease
- Mar 26, 2021
In a rare pandemic-era office deal for Manhattan, the Kaufman Org. has expanded its historic building collection with the acquisition of The Haymarket Building in Midtown’s NoMad neighborhood. The company purchased the asset for $34.5 million from MFM Properties LLC, under a newly formed a 99-year ground lease.
Kaufman will manage the 12-story building at 135 West 29th St., located between Sixth and Seventh Avenues. The deal marks the company’s third acquisition in the last 14 months. Among these deals was the purchase of 56 West 22nd St., with partner AXA Investment Managers, roughly a year ago. Longtime owner Fifty Six Realty Corp. pocketed $48.5 million for the landmark property in the Flatiron District, in an all-cash deal, according to CommercialEdge.
Dating back to 1911, The Haymarket Building offers 86,000 square feet and was 70 percent occupied at the time of sale. Kaufman is planning to renovate the asset, which was last upgraded two decades ago. The tenant roster includes finance, technology, advertising and architecture firms, with asking rents situated in the $39 to $49 range per square foot.
Betting on Manhattan ground leases
With more than a century of experience in the market, Kaufman owns, manages and leases properties across the larger tri-state area, with a total footprint of about 6 million square feet. The bulk of the company’s portfolio is located in Midtown South, where the veteran ground lease investor is among the most active players, according to Michael Kazmierski, president & principal of Kaufman Investments. Kazmierski and Vice President Lorenzo Bakewell-Stone oversaw The Haymarket Building purchase.
Since the onset of the global health crisis, the New York City transaction market has seen a growing popularity for ground lease deals, which included the sale of the 120,000-square-foot 860 Washington St. in the Meatpacking District, reported by The Wall Street Journal in early 2021. Meadow Partners paid $230 million to close the 99-year agreement. Just as the pandemic hit last March, SL Green acquired the ground lease of 126-132 Nassau St. in the Financial District, for the development of a 27-story mixed-use project for Pace University, which later received a $125 million construction loan.