Marcus Partners has purchased a share of two Midtown South office buildings for $54.5 million.
The Boston-based investment firm has entered a joint venture with Dalan Management, which owns 10 and 12 East 33rd Street, a pair of 12-story office buildings near the thriving district known as NoMad. The two companies now share ownership of the properties.
Each building features roughly 35,000 s/f of office space and 2,000 s/f of retail. Dalan spruced up both assets in 2015 but the newly formed partnership plans to conduct a full renovation with improvements to the façade, storefronts and entries, lobbies and elevators with the goal of attracting more tech-focused clients to the spaces.
“Marcus Partners is truly excited to enter the Midtown South market with a unique property geared toward an entrepreneurial TAMI tenant base,” said David Fiore, a principal at Marcus and head of its New York Regional office. “The properties offer a stable, diversified tenancy and provide opportunities to create further value over the next few years. We are excited to continue the improvement plan with the Dalan team to reposition 10-12 East 33rd Street to the next level of quality and performance.”
JLL team lead by Mo Beler, head of JLL’s New York Investment Sales, arranged the joint venture agreement. Also involved in the deal were Beler’s fellow managing directors Glenn Tolchin and Anthony Ledesma, as well as JLL Vice President Matthew Spiegel.
“The office property is fully leased to a mix of tenants in industries ranging from technology, advertising, media, information and architecture,” Beler said. “This asset presented the right investor with a rare opportunity to participate in the NoMad appreciation story through the acquisition of two well-leased, aesthetically pleasing loft-style office buildings that offer an opportunity to add further value through targeted upgrades and leasing to meet rising market demand.”
Dalan and Marcus hope to capitalize on the surge of new restaurants and retail activity in Midtown South, particularly in the areas around Madison Square Park and the Flatiron Building. Located a half-mile from both Penn Station and Grand Central, and outfitted with 3,000 s/f floor plates, the joint venture believes the buildings have strong fundamentals from which to grow.
“We are extremely excited to be teaming up with Marcus Partners on the continued operation and repositioning of these properties,” Daniel Wrublin, Principal of Dalan Management, said. “Mo and the team at JLL did a great job in identifying the right capital partner for us. This transaction enables Dalan to recycle capital into a new investment while also maintaining an ownership stake in these great assets.”