By Linda O’Flanagan
Normandy Partners is in contract to buy 1370 Broadway for $125 million, according to sources.
The 250,000 s/f Garment District building was offered for sale by Sitt Asset Management and investor Carlton Associates through Eastdil Secured last month. Sitt bought the 16-story office building from SL Green for $58.5 million in 2003.
Reports have been swirling for several weeks that bids for the building were coming in at around $520 per square foot.
According to website MrOfficeSpace.com, some 30,000 s/f of office space is currently available for lease in the 240,000 s/f building while another 50,00 s/f is coming due within the next few years, according to brokers familiar with the property.
With current rents said to be well below marketing pricing in the Times Square South district, “That makes for some nice upside on rents. I think that was the crux of the sale,” said one source close to the deal.
Last December, Morristown, NJ-based Normandy sold the Hancock Tower in Boston to Boston Properties for $930 million after buying the tower for $660.6 million in a 2006 foreclosure auction.
The company – which owns and operates one of the largest real estate portfolios in the Northeast – currently manages a series of discretionary real estate funds totaling approximately $1.0 billion of equity commitments. Its existing portfolio includes 14 million square feet of commercial assets, four hotels and numerous land development sites.
According to its website, Normandy targets value added real estate investments in the gateway markets of Boston, Metro New York City, Los Angeles, San Francisco, and Washington, D.C. “where opportunities exist to enhance value through creative repositioning, financial restructuring, intensive management, and capital improvements.”
Current tenants at 1370 include the executive office suites company Jay Suites which last year signed a 10-year deal for 16,000 s/f, merchant bank Rosenthal & Rosenthal which occupies 57,625 s/f and the clothier Espirit.
Neither Normandy nor Sitt immediately responded to a request for comment.