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Deals & Dealmakers

SELLING POINTS: SL Green pays $90M for Kenneth Cole office building

SL Green pays $90M for Kenneth Cole office building

SL Green Realty Corp. has agreed to pay $90 million, or $562.50/sf, for the 160,000-s/f office building at 603 West 50th St. in Manhattan.

The New York REIT is buying the property from Kenneth Cole Productions Inc., which had acquired it in 2006 for $24 million.

KCP Holdco, Inc., an affiliate of the seller, which currently occupies the property, will lease-back approximately 40,000-s/f of office space to serve as its headquarters. SL Green will undertake a full-building repositioning to elevate the profile of this asset. The transaction is expected to close within the next 90 days, subject to customary closing conditions.

Built in 1940, 603 West 50th Street is located on 11th Avenue, along the entire block frontage between 50th and 51st street. Upon closing, SL Green will execute a comprehensive renovation program, upgrading the building while enhancing the property’s industrial aesthetic. It is a timber construction building featuring large windows, wood floors and beams, brick perimeter walls, and floors ranging between 22,000 to 28,000 rentable s/f. SL Green did a similar repositioning at 410 10th Avenue, another prewar property.

SL Green’s acquisition of 603 West 50th Street will be partially funded by proceeds from the sale of 1010 Washington Boulevard in Stamford, CT, which is under contract to be sold for $23 million.

Woody Heller and David Heller of Savills advised the seller in this transaction.

Fairstead to renovate $75M Harlem portfolio

Fairstead Affordable has purchased Harlen Housing, a two-building affordable housing portfolio made up of 214 units in Central Harlem, for $75.5 million.

The property benefits from a HUD Project Based Section 8 contract and HPD Article 11 regulatory agreement and will remain deeply affordable for at least the next 40 years. Ariel Property Advisors facilitated the sale.

Fairstead Affordable plans to significantly renovate the property, lower its energy consumption and enhance its overall sustainability.

The renovation will consist of extensive high quality in-unit renovations, including the creation of UFAS/ADA accessible units, and significant common area improvements to the physical plant, lobby, hallways and community room. Fairstead has committed to preserve 100% of the units as deeply affordable for at least the next 40 years.

Ariel Property Advisors agents Victor Sozio and Matthew L. Gillis represented the buyer, Fairstead Affordable, and the seller, Harlen Housing Associates.

The two buildings are located at 560 Lenox Avenue and 50 West 139th Street.

NJ building sells for $16.65M

Gebroe-Hammer Associates has arranged the $16.65 million sale of Reynolds Terrace Apartments, a nine-story midrise comprised of 120 apartment units at 248 Reynolds Terr. in the City of Orange, New Jersey.

The firm’s Executive Vice President Stephen Tragash and Executive Managing Director David Oropeza exclusively represented the seller, 248 Reynolds Terrace, LLC, and procured the buyer, a private investor.

“Featuring a mix of studio and one- and two-bedroom layouts within a tree-lined residential neighborhood, Reynolds Terrace Apartments is a prime example of what today’s investors are seeking throughout the East Essex Region – a quick walk to mass transit, proximity to blue-chip employers and accessible neighborhood conveniences,” said Tragash.

“Properties of this size and caliber will benefit from long-term value appreciation associated with favorable demographic patterns forecasted for the next 5 – 10+ years.”

Lakewood Equities wins New Jersey trophy

Cushman & Wakefield’s New Jersey capital markets team has arranged the trade of 1 Gatehall Drive in Parsippany.

An affiliate of Lakewood Equities purchased the 115,000 s/f, four-story office building from a joint venture partnership involving Lincoln Property Company and Development Ventures Group.

Representing the seller, Cushman & Wakefield conducted tours with over 15 potential buyer groups and received multiple offers for 1 Gatehall Drive.

“The Lincoln Property Company and Deven Group partnership did an outstanding job bringing out the potential of this boutique asset. In particular, their execution of physical upgrades and amenity enhancements allowed their leasing program to generate over a dozen new leases and renewals during the past 18 months,” noted Gary Gabriel, who headed the assignment with David Bernhaut, Andy Merin, Frank DiTommaso and Andy Schwartz.

Cushman & Wakefield office leasing specialists William O’Keefe and Kelsey Nakamura also supported the transaction.

1 Gatehall Drive was delivered 86 percent leased to more than 20 tenants with an average size of 3,400 s/f.

The property’s flexible layout caters specifically to a small and mid-size tenant base.

“Historically, over 30 percent of all leasing activity within the Parsippany submarket has consisted of transactions less than 10,000 square feet, and last year, 80 percentof activity within the larger Morris County market was made up of deals in that size range,” DiTommaso said. “Lakewood Equities recognized the property’s competitive positioning within the market and will continue to benefit from increased occupancy and newly executed leases.”

Senior housing planned for CT site

CBRE announced the $12.44 million sale of a 10-acre parcel at 201 High Ridge Road in Stamford, CT to an affiliate of National Development of Newton, MA.

Jeffrey Dunne, Steven Bardsley, Gene Pride, Jeremy Neuer and David Gavin of CBRE’s Institutional Properties Group represented the seller, Steven Wise Associates, LLC (SW Associates).

National Development, and its partner Epoch Senior Living, plan to redevelop the property into a 150-unit luxury independent and assisted living senior housing community to be known as Waterstone on High Ridge.

201 High Ridge Road currently contains a vacant 196,000 square-foot office building originally constructed as the world headquarters of Waldenbooks and more recently owned by General Electric.

National Development intends to raze approximately 110,000 s/f of the existing building on their portion of the site to construct Waterstone on High Ridge. SW Associates will reposition the remaining building on the adjacent 6.5-acre site.

Dunne commented: “National Development’s new independent and assisted living community and Steven Wise Associates’ plan to repurpose the remaining 86,000 s/f of office is a classic example of the effective re-use of inefficient single tenant surplus corporate real estate. In addition, National Development is providing much needed senior living housing in the Stamford area.”

Medical office property trades for $11M

A Connecticut medical office proeprty has traded for $11.3 million in a deal brokered by Lee & Associates NYC.

Dennis Someck, Justin Myers, and Ben Tapper arranged the sale of the 28,925 s/f property at 515 Middle Turnpike West in Manchester, CT.

The Lee & Associates NYC team represented the seller, Metro Realty of Farmington, CT, who built the property in 2012.

The building was purchased for $11,300,000, approximately a six percent yield, by Physicians Realty Trust of Milwaukee, WI, who was represented by Davis Healthcare Real Estate of Minneapolis, MN.

515 Middle Turnpike West currently has two medical tenants, ProHealth, which is now owned by UnitedHealthcare, and St. Francis Hospital and Medical Center, a member of Trinity Health of New England. St. Francis has a lease expiring in July 2020, at which time ProHealth will take possession of their space and occupy 100 percent of the building.

“The single floor layout of the property with ample on-site parking is optimal for a medical center and outpatient use,” said Tapper, who added that “this is an ideal location for medical, seeing as there are three hospitals within a 10-mile radius.”

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