Ross Stores Buys 1372 Broadway from Starwood Capital
- Sep 24, 2014
Ross Stores, Inc., has acquired the leasehold interest to the 21-story Manhattan office building at 1372 Broadway that houses its East Coast buying office from an affiliate of Starwood Capital Group.
The price was not disclosed, but Ross, which is the nation’s the largest off-price apparel and home fashion chain, recently announced a $250 million public offering of senior notes. The company stated it planned to use the net proceeds of the offering, which closed Sept. 18, to acquire its New York City office building.
The 572,000-square-foot building is located on the northeast corner of West 37th Street and Broadway between Times Square and Herald Square in the Times Square South submarket, also known as the Penn Plaza/Garment District submarket.
“Ross occupies the majority of the office portion of the building and will look to occupy more space as required,” a company spokesperson told Commercial Property Executive.
Ross Stores, which had fiscal 2013 revenues of $10.2 billion, also owns its headquarters in Dublin, Calif., office as well as its distribution centers and various other properties, the spokesperson said.
Starwood Capital, through its Starwood Distressed Opportunity Fund IX, purchased the leasehold interest in June 2012. Herald Square Properties partnered with Starwood Capital on the investment and has served as asset manager and exclusive leasing agent for the building. The Ross Stores spokesperson said Herald Square Properties will no longer serve in those roles but did not announce a replacement.
“In making this acquisition, we anticipated that the office demand would shift from Midtown Manhattan to the market below 42nd Street, where this property is located,” Marcos Alvarado, senior vice president at Greenwich, Conn.-based Starwood Capital, said in a statement. “We are pleased that our investment thesis played out as expected.”
Since 1991, Starwood Capital has acquired approximately 48 million square feet of office assets around the world. In April, the firm acquired a 78,000-square-foot retail building at 150 West 34th St. across from Macy’s in Herald Square on behalf of a controlled affiliate. The building is fully leased to Old Navy. It has 225,000 square feet of air rights for future development potential, according to Starwood Capital.
Kasowitz, Benson, Torres & Friedman L.L.P. advised Starwood Capital on the sale of 1372 Broadway.
Ross Stores has 1,194 Ross Dress for Less stores in 33 states, Washington, D.C., and Guam, including 23 that opened in June and July. The company also runs dd’s DISCOUNTS, which now has 144 stores in 13 states, including seven that opened in June and July. Ross Stores plans to add about 75 Ross Dress for Less stores and 20 dd’s DISCOUNTS stores this year, according to a company statement.