Peebles, Elad Buy NYC Landmark Building for $160M
- Dec 18, 2013
The Peebles Corp. and Elad Group have bought the historic 346 Broadway office building from New York City for $160 million and plan to transform the 115-year-old property into a five-star hotel and upscale condominiums in a $400 million restoration.
The 13-story Tribeca building, also known as 108 Leonard St., had been owned by New York City since 1967. The city has used the building to house the Criminal Summons Court and several city agencies. Construction is expected to begin in the spring or summer after the city moves its employees out. The Real Deal reported that sales were expected to start late next year with 2016 slated for the opening. When completed, it could have between 50 and 75 hotel suites and 110 to 140 condo units, according to the New York Post.
The plan began to take shape back in early March, when New York City Mayor Michael Bloomberg announced the city was selling 346 Broadway and 49-51 Chambers St. for a total of $249 million. The Peebles Corp., run by R. Donahue Peebles, won the right to buy 346 Broadway after agreeing to convert about 16,000 square feet on the ground floor of the building into a digital arts and media space dedicated to public use, according to a city press release. The Chetrit Group won the right to acquire 49-51 Chambers St. for $89 million and is expected to redevelop it for residential and retail uses. Both sales, expected to generate about $120 million in net revenue, were part of the city’s plan to consolidate office space and increase efficiency of government operations.
The Peebles Corp. had planned all along to convert the 400,000-square-foot building into a mixed-use property with residential and hotel space. Peebles, the CEO &chairman of the Miami and New York-based development firm, told The Real Deal he turned to Elad Group as a partner in the project because of its experience with restoring landmarked properties, including The Plaza Hotel and 250 West St., both in Manhattan. The building is a city landmark and also on the state and national historic registers. It was designed by McKim, Mead & White and served as the headquarters for the New York Life Insurance Co. starting in 1898.
While details could not be confirmed by press time, several media reports note that Goldman Sachs was providing at least some of the financing.
Howard Michaels of The Carlton Group, the New York-based international real estate investment banking firm, said in a news release that he had brokered the trade of 346 Broadway to the Elad Group from The Peebles Corp. He could not be reached for further details on his role in the transaction. Last month, Michaels also helped put together $535 million in financing for the Witkoff Group and Jynwel Capital to acquire the Helmsley Park Lane Hotel in Manhattan representing approximately $1 billion in deals arranged by Michaels in recent weeks.