By Daniel Geiger
Epic LLC, a real estate company that invests in London and New York properties, is acquiring the newly developed Meatpacking District office building 15 Little West 12th Street for more than $70 million, Steven Elghanayan, one of the firm’s principals, has confirmed.
“We love the area and the neighborhood,” said Elghanayan, who operates Epic LLC with his brother Michael Elghanayan. “We think there is a lot of growth possibility here in terms of rents. We’re right across the street from the Standard Hotel. Apple has a store on 14th Street, Sephora is right across the street from our building on West 13th. Google just bought 111 Eighth Avenue nearby for a huge sum. The area is changing.”
15 Little West 12th Street is about 70,000 s/f in size and five stories. Last year, the furniture company Arhaus took about 32,000 s/f of retail space in the building’s base and the firm Palantir Technologies leased the fifth floor penthouse, where it is constructing an opulent space with an outdoor terrace. Two office floors remain, three and four, which are about 17,000 s/f and 16,000 s/f respectively. Elghanayan said he is aiming to rent the openings for between $65 per s/f and $70.
“The beauty about this building is the virtually no other properties in the Meatpacking neighborhood have floor plates as large as between 15,000 to 20,000 s/f like we do, so we feel great about the attractiveness of this space,” Elghanayan said.
Elghanayan said that he plans to retain a leasing team from Newmark Knight Frank led by Newmark’s New York area president David Falk that has been working as the building’s agent. Falk’s team arranged the deal with Palantir last year and is said to be fielding tenants for the remaining space.
“We think that Newmark has been doing a great job,” Elghanayan said.
Elghanayan said that 2,000 s/f of retail space is also available on the building’s frontage along 13th Street.
“We’re looking for a high end retailer for that space,” Elghanayan said, projecting rents in the $300s per s/f.
Elghanayan, who was raised in England with his brother, said that he handles the firm’s investment operations in New York while Michael focuses on deals in London.
“We decided last year to start investing more in Manhattan,” Elghanayan said “We felt it was a good opportunity after the market came down in ‘08 and ’09.
Last year, Epic purchased the condo project 34 Leonard Street from the lender iStar for around $40 million and converted it into a rental property. Elghanayan said that the firm has since fully leased the property to tenants.
The brothers Steven and Michael are cousins of New York’s Elghanayan brothers, Henry, Tom, and Fred, who split their large real estate empire in the city in 2009 with Henry keeping the name of their company, Rockrose, which retained one third of its portfolio. Tom and Fred kept two-thirds of the assets, including most of the commercial properties in Manhattan, under the new banner TF Cornerstone. Steven Elghanayan said that he speaks with the brothers, primarily Fred and Tom.
15 Little West 12th Street was originally imagined by the famed party planner and decorator Robert Isabell. The project fell into the hands of lenders Taconic and Square Mile Capital partners, who had lent over $45 million against the development at a whopping 20% interest rate according to written reports, after Isabella died suddenly in 2009 from a heart attack. Taconic and Square Mile completed the development and began marketing it for sale earlier this year using a team from the real estate services firm Jones Lang LaSalle led by JLL sales executives Richard Baxter, Ron Cohen, Jon Caplan, and Scott Latham.
Stuart Romanoff, a leasing executive at the real estate services firm Cushman & Wakefield, said that the purchase was another sign of the Meatpacking District’s transformation from a onetime industrial area into vibrant neighborhood of shopping, restaurants, hotels, and now office space.
“I think the market has become one of the strongest submarkets in the city for office rental rates,” said Romanoff, who isn’t involved with 15 Little West 12th but is familiar with the area and has moved tenants like NY1 into the neighborhood. “There is very little supply and there is a very low vacancy rate, tenants that are coming there are both creative tenants and financial firms. This influx of these tenants is continuing to grow and expand.”
Correction: An earlier version of this article misstated the amount of properties divided between Rockrose and TF Cornerstone at the time of the split.