Madison Realty Capital has closed on the purchase of The Buchnan in midtown for $270 million after bringing in joint venture partner, USAA Real Estate Company.
The institutionally-backed real estate private equity firm and the asset management giant will be just the fourth owners of the 300,000 s/f property at 160 East 48th Street
“We believe that The Buchanan provides a tremendous value proposition backed by sound fundamentals with sustainable growth. This was a rare chance to acquire a full block asset exhibiting predominantly core characteristics while providing significant value-add potential,” said Josh Zegen, co-founder and managing principal of MRC.
The building is comprised of five interconnected mid-rise towers which surround a garden courtyard, and contains 289 apartments and approximately 16,000 s/f of retail and office space.
It also comes with nearly 140,000 s/f of excess air rights.
The partnership plans to initiate a capital improvement program geared towards renovating and reconfiguring existing residential units, enhancing operating efficiencies, and creating a high-end amenity package.
The residential unit mix includes studio, one-bedroom, two-bedroom and three-bedroom apartments stretching from the second floor through the 16th floor, with penthouse units offering private outdoor terraces.
The retail space and office space, which spans predominantly along 200 feet of frontage on 3rd Avenue and roughly 145 feet of frontage along 47th and 48th Streets, is currently 100 percent occupied.
According to the Wall Street Journal, the sellers were the Tausik and Kayden familes, partners with investor Harry Helmsley when he bought The Buchanan for $1 million in 1952 and who later bought his stake in the property..
“We are very familiar with this neighborhood and are looking forward to successfully executing our business plan, which is very similar to what we’ve accomplished a few blocks away at 361 East 50th Street,ˮ said Zegen.
“We are also excited to complete our second transaction with our partner USAA Real Estate Company.”
In 2014, MRC partnered with USAA to construct a 170,918 s/f 80/20 multifamily building on the corner of Waverly Avenue and Atlantic Avenue in the Clinton Hill neighborhood of Brooklyn, New York.
Len O’Donnell, president and CEO of USAA Real Estate Company, added: “We are extremely pleased to be expanding our relationship with Madison Realty Capital. They have proven to be an outstanding partner and we are looking forward to the successful execution of this transaction.
“Tom Bermingham and our New York team are creating a truly exceptional portfolio of assets, as we continue to increase our presence in the market.ˮ
