By Konrad Putzier
Days after paying $500 million for a Broadway office tower, American Realty Capital said it has $1 billion more where that came from.
“This is a great time to buy in Manhattan,” said Michael Happel, chief investment officer for the company’s New York Recovery REIT (NYRR).
“We have a busy acquisition pipeline and a loose target to buy another billion in commercial real estate in Manhattan over the next 12 months. But if an opportunity presents itself, it may be more than that.”
Earlier this week, NYRR announced a deal to purchase 1440 Broadway for $523.8 million from Monday Properties and the Rockpoint Group.
Located between 40th and 41st Streets in the southern Times Square area, the 756,000 s/f 25-story office and retail building primarily investment grade tenants that include it’s biggest occupier, Macy’s, occupying 27% of the building.
According to Happel, NYRR is considering turning the building’s retail areas into a big-box space in two years, when the current leases expire.
“We think this area continues to improve as the Times Square submarket expands to the south and the Bryant Park submarket expands to the north,” said Happel.
“As rents rise in Midtown South, a lot of tenants are being priced out. One of the places they are moving to is this Times Square South submarket, where they get a more attractive rent and great access to public transportation.”
The 1440 Broadway deal — which was brokered for Monday and Rockpoint by Adam Spies and Doug Harmon of Eastdil Secured — adds to an already impressive portfolio of New York commercial real estate worth $2.1 billion, almost half of which was acquired over the past few months.