ATCO Properties & Management, one of Manhattan’s pre0eminent owner/operators of class A commercial real estate, has purchased 240-246 West 35th Street, an 18-story building in the Garment District, for $108 million.
Situated steps away from Penn Station and Herald Square, the 165,000 square-foot office property, includes such tenants as Cablevision-owned media group Newsday; leading fashion design Jason Wu; fashion and eyewear designer Thom Browne; technology company Fidelus Technology; leading foreign language school Spanish American Institute; and high-end bridal designer Reem Bridal. It is currently 96% occupied.
The property is situated in the heart of 35th Street, between 7th & 8th Avenues, which is rapidly becoming a main east-west corridor between Hudson Yards and midtown.
NGKF Capital Markets, serving as the exclusive advisor to ATCO, closed on $71 million in financing for the acquisition.
Metlife issued the senior loan. Executive Managing Director Jordan Roeschlaub and Managing Director Daniel Fromm led the NGKF Capital Markets team that arranged the financing to facilitate ATCO’s acquisition from RPW Group.
The floating-rate loan was structured with a three-year initial term and two one year extension options to facilitate the purchase.
Richard Baxter (now with Colliers International) and Anthony Ledesma of Jones Lang La Salle represented the seller, Westchester County-based RPW Group, in the transaction. There were no outside brokers for the buyer.
The purchase marks ATCO’s first acquisition in the Garment District and the 12th acquisition in ATCO’s ACCRE investment platform since 2012.
ATCO presently owns and manages more than 35 buildings ranging from high-rise office and residential towers to one-story industrial structures and high tech flex buildings, including notable Manhattan properties such as 555 Fifth Avenue, 40 Central Park South, 41 West 58th Street, 630 Third Avenue, 381 and 373 Park Avenue South.
The acquisition was made through ATCO’s City Center Real Estate Program, an investment vehicle designed to provide financing for central business district (CBD) commercial properties in select markets across the country.
“This acquisition at 240-246 West 35th Street reflects our continuing efforts to seek out opportunities in CBDs throughout the U.S., including our hometown of New York City,” said Damon Hemmerdinger, co-president of ATCO Properties & Management.
“With the center of Manhattan moving south and west, we believe that 240-246 West 35th Street offers tremendous value for high quality tenants looking to be near Penn Station, Hudson Yards and Manhattan West.”
“It gives me great satisfaction to know that ATCO is the new owner of the property as it is a prominent company with an impeccable reputation,” said Robert P. Weisz, CEO – RPW Group, Inc.
“I look forward to seeing ATCO develop the building to its full potential and continue to provide existing and future tenants with outstanding service. 240 has been an excellent investment for our family, and I have no doubt that it will be for ATCO as well.”
The acquisition is the latest in a series of investments by ATCO in the Tri-State area and the Mid-Atlantic region.
Most recently, ATCO provided a preferred equity investment in 525-545 Broadway in East Williamsburg, Brooklyn; acquired 38 Main Street in downtown Westport, CT; bought 137 East Franklin Street in downtown Chapel Hill, N.C.; and purchased a 15.5-acre development site in the NoDa Greenway District near the Blue Line Extension light rail in Charlotte, N.C.
