Swiss AFIAA Foundation for Real Estate Investments, a Zurich-based fund, has bought 119-125 West 25th Street in Chelsea for $150 million.
The 12-story office tower, which contains the 52,600 s/f headquarters for fitness equipment manufacturer Peloton, is located near the Empire State Building and Madison Square Garden. The seller is Morristown, New Jersey-based firm Normandy Real Estate Partners.
“The current acquisition marks the first time in about eight years that we are investing in the New York real estate market again. In our view, the office market currently provides good investment opportunities. We are also seeing further potential for rent increases in Midtown South Manhattan in particular,” said Dino Christoforakis, the head of transactions for AFIAA’s North American operations.
The property, which was built in 1906, was fully renovated before the sale. Normandy and its partners, Waterbridge Capital and NTT Urban Development, recently completed a $20 million capital improvement program for the 138,000 s/f tower. The renovations upgraded the building’s lobby, elevators, building systems, basement, roof terrace and its penthouse.
The purchase price represents a hefty profit for Normandy, Waterbridge and NTT. The joint venture bought the property for $54.55 million three years ago.
“When we acquired 125 W 25th Street in 2013, we were attracted to the location – in the middle of Manhattan’s technology and media center — and we had a vision of how we could redevelop the asset to set it apart from other buildings in the area and that would draw in future tenants,” said Paul Teti, Principal of Normandy Real Estate Partners.
The acquisition expands AFIAA’s portfolio in North America. The Chelsea office tower will be folded into the AFIAA Global fund, which owns properties in Austin, Chicago, Philadelphia and Washington, DC. This fund currently contains about $1.46 billion in assets.
The seller was represented by Adam Spies, Doug Harmon, Kevin Donner and Adam Doneger of Cushman & Wakefield. The buyer was represented by Samuel Lefkowitz.