TIAA-CREF has purchased 21 Penn Plaza, the midtown Manhattan office property owned by Savanna and The Feil Organization, for an undisclosed amount.
Savanna and Feil bought the 16-story office building on the corner of West 31st Street and 9th Avenue for $137.5 million in 2011.
They spent close to $5 million on building upgrades and successfully leased over 225,000 s/f of space to re-stabilize the property at 98 percent occupancy prior to marketing the property for sale at $250 million through Bob Knakal and his team at Massey Knakal Realty Services.
“21 Penn Plaza is located in the path of progress of the exciting development occurring in the far west side of Manhattan,” said Bob Knakal. “Its location, combined with the quality of tenancy and capital improvements in the property make it an ideal home for companies seeking to define the frontier of what should become a new epicenter of activity in Manhattan.”
The property is within the epicenter of the $27 billion of investment currently underway on Manhattan’s far west side. Nearby developments include the Moynihan Station (directly across the street), Related Companies and Oxford Properties Group’s Hudson Yards and Brookfield’s Manhattan West.
The property offers convenience to commuter rail service, the West Side Highway, the Lincoln Tunnel and Hudson River ferries. The NYC subway system is accessible via nearby Penn Station and, next year, the extension of the No. 7 subway to 34th Street and 11th Avenue. In addition, the final section of the High Line public park has just opened, extending to 34th Street and 12th Avenue.
“We believe this property is well positioned to take advantage of the rapid changes and revitalization happening in midtown west,” said Henry Dong, senior director, global real estate for TIAA-CREF. “Rents are on the upswing in the area and we see that trend continuing. The massive redevelopment of the neighborhood should make it a destination for employers, tourists, shoppers and new residents.”
Savanna and Fiel create new lobbies in the building, entrances and upgraded mechanical systems as part of a repositioning that attracted retail tenants include Avon, Dunkin’ Donuts and H&R Block. Office tenants include Saks & Company, Langan Engineering and Amtrak.
“We are proud of the excellent work performed by our joint venture in transforming 21 Penn Plaza into a CORE/CORE+ asset,” said Christopher Schlank, Managing Partner at Savanna.
“We have made a significant investment in its infrastructure and enhanced 21 Penn Plaza’s tenant base on our way to re-stabilizing it. It’s a great asset in an exciting location experiencing rapid change,” said Jeffrey Feil, CEO of The Feil Organization.
The law firm Cole Schotz advised The Savanna Fund in the sale. Attorneys who advised were members Leo V. Leyva, Richard W. Abramson, Christopher J. Caslin, Alan Rubin and associate Griffin J. Doty.