Westbrook Partners has bought out a major partner of the St John’s Terminal building at 550 Washington Street, paving the way for a redevelopment of the site.
The company paid $200 million to buy the majority share of the property owned by Fortress Investment Group in a transaction that valued the 1.1 million s/f office building at around $650 million.
Prior to the deal, Westbrook and Fortress together had owned the majority of the property, while Atlas Capital Group owns a smaller minority interest in the building, which it will continue to hold.
In 2012, the building’s longtime owner, Eugene Grant, sold the four-story building to the investment group for $541 million.
Last year, the owners considered redeveloping the site into a condo project that would include retail and affordable housing.
Atlas presented a plan to Manhattan Borough President Gale Brewer in a meeting last September that entailed the firm purchasing 250,000 s/f of air rights from Hudson River Park Trust, Pier 40’s controlling entity, for $100 million, which would give the deteriorating facility much-needed cash while allowing Atlas to construct an addition to St. Terminal.
At the meeting, Atlas proposed the first phase of the project would include 450,000 s/f of condos and 100,000 s/f of retail, as well as dedicating at least 110,000 s/f of the project to affordable housing for seniors.
That proposal has stalled, and St. John’s Terminal Building is currently zoned for office and hotel use, and would need to get approval from the city to add residential.
The sprawling building has long been viewed as a promising redevelopment project, due to its location on the West Side, the 800 feet of frontage is has along the Hudson River, and one of the most spacious floor plates in Manhattan, which stretches up to 200,000 s/f.
In 1930, the New York Central Railroad proposed building a large freight terminal on Manhattan’s West Side. The plans originally called for the building to be 12 stories high and cost $15 million. However, those plans were scaled back to three stories (the fourth was added later), at a cost of $2.5 million. St. John’s terminal finally opened in 1934.
The building was once a waterfront shipping facility, before being repositioned as a low-cost office building in the 1980’s, for financial firms in need of specialized facilities. Bloomberg LP currently leases 370,000 s/f in the building.
Westbrook Partners confirmed the sale but declined to comment further.
Adam Spies and Doug Harmon, brokers at Eastdil Secured, represented both parties in the transaction.