By Daniel Geiger
Iluna USA, a Milan based manufacturer of women’s undergarments, has purchased a roughly 6,000 s/f condo unit at 110 East 40th Street.
The company paid $2.75 million for the space, which constitutes half of the third floor. Michael Rudder and Michael Heller, who operate a brokerage and consulting group that specializes in commercial condo sales and conversions, represented the company in the deal.
“Iluna owns many of their worldwide offices and has benefited from the control over their space and the capital appreciation that comes with office condominium ownership,” Rudder said in a statement. “Iluna recognized that 110 East 40th Street offered a tremendous long-term opportunity to own their office space at a great price.”
110 East 40th Street, a roughly 100,000 s/f building, was acquired by the investment firm Philips International in early 2009 for around $35 million. The company carved the 11-story property into condo units of various sizes and hired a team from the real estate services company Newmark Knight Frank to market the spaces.
Newmark executives Scott Klau, Myles Fennon, and Aaron Maltz represented Philips International in the deal with Iluna.
Philips International has been involved in a number of commercial condo conversions including 36 West 44th Street, 820 Second Avenue, and 800 Second Avenue, buying the buildings and slicing them up into individual office units for sale.
Rudder himself is a veteran of the office condo market, working at Time Equities, another firm that focuses on such conversions, until last year, when he started his own firm, Rudder Property Group, in partnership with Heller.
Commercial condominiums, once a niche primarily sought after by non-profit organizations and medical practices, has gained wider popularity as tenants have begun to see the benefits of owning their own space.
At Time Equities, Rudder oversaw and sold units in a number of the company’s biggest conversion projects, including the 350,000 s/f building 125 Maiden Lane and at two midtown locations, the 180,000 s/f property 70 West 36th Street and 131 West 33rd Street, which is 190,000 s/f. Operating on his own, Rudder has continued to churn out deals.
In a conversation with Real Estate Weekly, Rudder said that he had recently been hired to sell 30,000 s/f of office space at 211 East 46th Street, a residential building that was converted into condominiums in 2008. Most of the building’s residential units have been sold off, along with the retail space and parking garage. But three office floors in the base of the building remain, each about 10,000 s/f in size. The spaces had been rented out to tenants by the developer of the property, Cammeby’s International, but are now vacant in anticipation that the likely buyers will want to occupy the floors for themselves. Because of the building’s proximity to the United Nations, Rudder predicted interest from international missions who could use the floors for office or administrative facilities.
Rudder also said that he is close to closing a deal at Extell Development Company’s new Gem Tower, a brand new commercial condo building at 20 West 46th Street that is being marketed to tenants in the diamond and jewelry businesses. In that transaction, the details of which Rudder said he could not yet reveal because it had not yet closed, an Israeli firm that Rudder is representing will acquire half of one of the building’s nearly 24,000 s/f floors for about $9.5 million.
In another deal, Rudder said he is close to selling 12,000 s/f in a condo building on the far West Side.
“More tenants want to own their own space,” Rudder said. “And more landlords are starting to consider converting their office buildings from rental to condo to meet the demand.”