New York REIT to Sell NYC Office Tower for $255M

The agreement to sell the 345,000-square-foot building at 333 W. 34th St. to Brookfield marks yet another step forward in the REIT’s plan of liquidation.
333 W. 34th St., Manhattan
333 W. 34th St., Manhattan

New York REIT Inc. continues its stockholder-approved liquidation program with a contract to sell 333 W. 34th St., a 345,000-square-foot office building in Midtown Manhattan. The REIT will sell the asset to real estate funds managed by Brookfield, pocketing $255 million on the deal.

“To date, excluding Worldwide Plaza and 1440 Broadway, we have sold assets with a gross sales price of $805 million and repaid $517 million of debt,” Wendy Silverstein, president & CEO of New York REIT Inc., said during the company’s third quarter earnings call on November 9, the same day the sale of 333 W. 34th was announced.

Developed in 1954, 333 W. 34th is an institutional-grade property that has maintained its glow through a series of upgrades over the years. The property is fully leased, per New York REIT’s website, with a four-name tenant roster consisting of The Segal Group; the Metropolitan Transportation Authority; Godiva Chocolatier Inc.; and Sam Ash New York Megastores LLC, which signed a lease for 30,000 square feet of retail space in 2013.

The transaction between New York REIT and Brookfield marks the third time 333 W. 34th has changed hands in the last 10 years. In 2013, New York REIT, then American Realty Capital New York Recovery REIT Inc., picked up the 10-story office tower for $220.3 million from SL Green, which had purchased the property for $183 million from Citigroup in 2007. The price the property fetched this time around—as with other properties New York REIT has sold during the liquidation process this year—was consistent with what Silverstein described during the earnings call as a somewhat lackluster investment sales environment.

[2017] was not a bold market for assets, generally speaking, but certainly not in New York City. The volume of sales activity was way down,” Silverstein remarked. “But with that said, every asset that we had sold so far was very, very well bid…. The truth of the matter is, when you go to the market and you sell them in a robust bidding process, that is the definition of fair market value, and I feel highly confident that what we’ve done here has gotten today’s fair market value for investors. And believe me, we’re working very, very hard on achieving that every day.

And the sale go on

New York REIT, still holding a premier portfolio of Manhattan assets, has made great strides in its ongoing plan of liquidation this year. Transactions announced in October and November alone include the disposition of the properties at 245-249 W. 17th St. and 218 W. 18th St. for $514.1 million, and the office buildings at 229 W. 36th St. and 256 W. 38th St. for $156 million. The company also entered into a contract to sell 1440 Broadway, a 755,000-sqare-foot office property, for $520 million.  New York REIT’s goal is to wind down, and it’s quite close to achieving its objective. 

 “Literally, almost every asset is in various stages of discussion with somebody,” Silverstein noted during the earnings call. “Other than the [Viceroy] hotel, I still feel good about getting it done by, call it, the end of March.”

The 333 W. 34th transaction is scheduled to close before 2017 comes to an end.

Image courtesy of New York REIT