By Sarah Trefethen
A partnership of William Macklowe Company and Principal Real Estate Investors, LLC has closed on the purchase of 386 Park Avenue South.
the sale price was $111.5 million, according to city records.
The 270,000 s/f Art Deco office building sits at the northwest corner of 27th Street in red-hot Midtown South, and the partners are planning capital improvements.
Approximately half of that space is unoccupied, Billy Macklowe, WMC’s chief executive, told Real Estate Weekly.
“It has a tremendous amount of vacancy that will allow us to execute our business plan now,” he said.
In executing that plan, the new owners will upgrade the building’s streetscape and front entrance, renovate the lobby, install new elevators and pre-build multiple floors of office space — all with an eye to LEED certification.
Studios Architects will design the renovations, Macklowe said, and he hopes to attract telecom, new media and creative companies that, while still young, have matured beyond the start-up stage.
“The idea is to make this building feel new, young and reflective of what that tenancy is today,” he said.
The pre-built offices are part of the plan.
“With most of these companies, if you can de-risk the construction for them it will give you a leg up,” Macklowe said. The property was acquired from a joint venture comprised of Savanna Investment Management LLC and Monday Properties, according to WMC.
City records show Monday bought the building in 2005, for $70.6 million, and Savanna bought the majority stake for $44.2 million in 2010.
Vacancy in Midtown South was at 6.7 percent at the end of the third quarter, according to Cushman and Wakefield.
Macklowe is confident that the market in the neighborhood will remain strong, and seemed unconcerned that other neighborhood’s, such as Brooklyn’s “Tech Triangle” will be able to usurp it’s status as the place to be for technology companies.
“I think Brooklyn is going to be a terrific competition for Downtown East,” he said.
In August, WMC in sold two Manhattan office buildings, at 400 Madison Ave. and 610 Broadway, but Macklowe said the company is looking to invest in additional Manhattan properties, and has “a couple of deals in the hopper right now.”