The Related Companies and Lloyd Goldman’s BLDG Management have purchased the retail space at 123 Third Avenue, a new 19-story condo at 14th Street, for $11.05 million, according to city records.
According to the deed, Related’s Yukon 123, LLC, and BLDG Management’s BLDG 123 Third Ave LLC will each have a 50% stake in the property.
“Related has always believed that the Union Square neighborhood is one of the most unique and vibrant areas in the city, and this transaction represents our continued commitment to and investment in the area,” said a spokeswoman for Related.
The 2,928 s/f retail condo is leased to Capital One Bank in a 15-year arrangement, with three five-year renewal options. It has 86 feet of frontage and 40 feet on Third Avenue.
Jeff Fishman, Ariel Schuster, Brian Segall and Jonathan Butwin, all of Robert K. Futterman & Associates, represented the buyer and seller. There was no asking price for the property.
“We have such demand for buyers of retail condos,” said Fishman. “This was sold very quickly, but with numerous bids.”
The rent for the space is more than $200 per s/f, making it an attractive, income-producing property, said Fishman. But he noted that the rent was not above-market, and could potentially be re-leased to another company.
“The 14th Street corridor is very much in demand,” said Fishman, crediting the area’s foot traffic and the proximity of institutions such as New York University.
123 Third Avenue was developed by Orange Management, which sold the retail condo, and F&T Group, and it was designed by Perkins Eastman. It has 47 condo units.
Related is a major landlord in the Union Square area. In 2007, it partnered with Vornado Realty Trust to purchase the Virgin Megastore chain, and later closed its massive Union Square and Times Square stores, opening the door for exponentially higher rents. According to Reuters, Virgin only paid $54 per s/f in rent, while the market rate for the space would be around $700 per s/f. The 57,000 s/f store known as 1 Union Square South is now leased to a Best Buy, Duane Reade, Nordstrom Rack and Citibank.
Related is also the owner of 33 East 17th Street, a building on the north side of the Square leased to Barnes & Noble, and it built the W Hotel in Union Square, now owned by Host Hotels.
BLDG Management, controlled by Lloyd Goldman, has a mostly residential portfolio. It recently partnered with Tavros Capital to purchase the foreclosed 448-452 Broome Street for $17 million.
Officials at BLDG didn’t respond to a request for comment.