Rockrose Buys 150 KSF NYC Commercial Office Building for $105M
- Dec 20, 2013
Rockrose Development Corp. has acquired 15 E. 26th St., a 150,000-square-foot boutique commercial office building located on Madison Square Park between Madison and Fifth avenues, from Savanna for $105 million.
“15 East 26th St., is a perfect example of a property that provided an opportunity for Savanna to implement its expertise in the New York office market,” Andrew Kurd, Savanna’s senior associate, told Commercial Property Executive. “We acquired the property at a time when the Midtown South market was starting to heat up and we implemented our two-pronged approach with a capital improvement program and a leasing and marketing initiative.”
Constructed in 1920, 15 East 26th St., is located in a landmarked historic district and houses a mix of high-tech and creative tenants including Vera Wang, which has executive offices and a showroom in the building. The commercial portion of the building consists of 150,000 square feet on floors 1 through 8 and is currently more than 95 percent leased.
Savanna acquired the property in 2012 and spent millions of dollars completely modernizing the lobby and entrance, fully upgrading the elevator cabs and mechanicals, and completing a façade and sidewalk restoration.
“Working with Jones Lang LaSalle, we leased the full third floor to a major financial institution and were successful in relocating two tenants in the building to other properties in our portfolio, which will allow Rockrose to mark those spaces to market,” Kurd said. “This property is maintained at an institutional quality and its location right in the heart of the Flatiron District overlooking Madison Square Park makes it appealing to the full spectrum of tenants.”
Rockrose has purchased six office buildings in Washington, D.C., over the past two years and intends for this new purchase to be another step in expanding its office portfolio in the New York market. It completed a renovation and rebranding of the nearby Creative Arts Building at 300 Park Ave., South in 2012, bringing it to full occupancy in less than a year.
“We are very strong believers in the strength of the Midtown South office market,” Justin Elghanayan, Rockrose’s president, said in a company release. “15 East 26th St., is a similar, very handsome building located on one of the most pristine parks in Manhattan, and it fits with our plans to purchase well-located office buildings, upgrade them to be best-in-class, and hold the assets for the long-term.”
According to Kurd, this was the right time for such a deal based on what Savanna was seeing in the marketplace.
“We continually evaluate all of our assets and analyze where they are in their business plan along with where the market is and is going,” Kurd said. “For 15 East 26th St., we did the same analysis, along with the Eastdil team, and decided that we had successfully implemented our business plan and determined the current market environment would lead to a sale that would be very attractive to us and our investors.”
Craig Deitelzweig, head of Rockrose’s office division, represented Rockrose in-house in this transaction. Adam Spies, Doug Harmon, Adam Doneger and Joshua King of Eastdil Secured represented Savanna.