By Roland Li
A 29,700 s/f office condo at 137-139 West 25th Street has been sold for $10 million, or roughly $337 per s/f.
Frank Crimmins, senior vice president and controller of Sony Music Entertainment, is listed in recent building permits as the owner of 137-139 West 25th Street. A call to Sony’s headquarters at 550 Madison Avenue wasn’t immediately returned.
The 12-story building totals 80,803 s/f, according to PropertyShark, including 72,550 s/f of office space and 8,250 s/f of retail.
Jonata Dayan, Adam Ben-Dayan and Jonathan Ben-Dayan of Winoker Realty Company, represented the buyer, 127 West 25th Street LLC. The space will be leased to Micropower USA/Micropower Career Institute, a technology and business trade school.
Dayan said the deal was somewhat unusual, because the buyer was leasing it to another entity, rather than taking the space itself.
“Typically, office condos have been selling to user-owners,” said Dayan, but added, “The rental rates make sense. It’s a good investment.”
She said asking rents in the area were $27 to $32 per s/f, although the profit margin for the new owner will be largely dependent on the type of mortgage on the property.
Commercial office condos have become a desirable purchase as rents continue to increase, because they offer a stable financial situation for buyers who occupy the space, said Dayan. For long-term tenants who own, relatively consistent common charges are a preferable option to rents that have the tendency to rise in Manhattan.
Dayan recently sold the third floor of 137-139 West 25th Street to a non-profit group, as well as a 4,500 s/f office condo at the nearby 223 West 19th Street, which traded for $2 million. According to the Observer, Box Graphics will own and occupy the space.
She also sold two condos at 800 Second Ave to a dentist and obstetrics and gynecology doctor, who will use the spaces as offices. While medical entities have been a large consumer of condos – N.Y.U. Langone Medical Center bought a 14 units for $50 million in January – Dayan said that all types of companies were currently interested in buying office condos.
“It’s not really industry-based,” said Dayan. “People are more financially sophisticated.”
Massey Knakal’s Robert Burton, senior vice president of sales, and Brock Emmetsberger, director of sales, represented the seller.
“This sale shows the returning strength and desirability of the midtown commercial market,” said Burton in a statement.
“We haven’t seen vacant office spaces in Chelsea of this class and size sell for above $300 per square foot since 2008, so this is a very good sign for the market,” said Emmetsberger in a statement.
As for Sony, the American branch of the company has occupied 550 Madison Avenue, formerly known as the AT&T building, for nearly two decades. Back in 1996, the Times reported that Sony doubled its space at 555 Madison Avenue and cut half its space at 711 Fifth Avenue, while terminating a lease at Sheldon Solow’s 9 West 57th Street.
Update, May 11, 3:40 pm: The sale has now closed. The seller was listed as Zomba Recording LLC, one of the record labels operated by Sony Music Entertainment, which previously had offices at 137-139 West 25th Street, before relocating to 550 Madison.