By Roland Li
Ownership of an Art Deco office building in the Financial District has been sold for $25 million to Metro Loft Management, according to city records.
Metro Loft Management purchased the building, at 116 John Street, from Hacienda International Realty, Inc., but the two companies will continue to work in a partnership to convert the property into a residential building.
Avinash K. Malhotra Architects will oversee renovations to built 418 rental units, with plans to begin leasing next year, the New York Times reported last week. The building is currently around 40% occupied by office tenants, but renovations have commenced in vacant space, with the owners attempting to empty the building, according to the Times.
Eastern Consolidated’s Stuart Gross, principal and executive managing director, and Azita Aghravi, principal and senior director, represented both sides in the deal.
“This is a prime example of financially creative adaptive reuse, where the owner benefits from the upside in the improved property, and the developer gets efficient acquisition financing. Eastern worked through a complex ownership structure, which required creativity in the transfer of the property and terms of the partnership,” said Gross in a statement.
“The chemistry has to be right in order to ‘marry’ two partners financially,” said Aghravi. “The fact that Metroloft had the expertise in this type of conversion in the neighborhood assured us that Hacienda and Metroloft are a great fit. The two have already developed a strong working relationship based on trust. We believe that this project will be very profitable for both sides.”
Debt and equity financing will be arranged for the existing debt and renovation, which is expected to exceed $100 million in total.
Officials at Metro Loft weren’t available for comment.