The deal was brokered by The CB Richard Ellis Tri-State Investment Team, led by Jeffrey R. Dunne, which represented 535 Connecticut LLC, a joint venture comprised of an institutional client of Lend Lease Real Estate Investments, Inc. and Mountain Development Corp. The brokerage firm also procured the buyer--an investment partnership of Matan Properties. The property sold for $161.31 per sf.
The building is approximately 92% leased with limited near-term lease rollover, according to CB Richard Ellis officials. They add that Micro Warehouse occupies approximately 35% of the building (approximately 60,000 sf) including the top two floors at a rental rate of only $18-$18.50 per square foot, which is approximately 60% of the rental rate for recent leases in the building.
Dunne commented on the deal by saying, "Matan Properties has purchased a well located asset offering a stable return over the near term and exciting upside potential on releasing. The ability to offer signage on this high visibility building further enhances the releasing prospects." He added that the sale price was fair to both the seller and the buyer.
The seller had purchased the 535 Connecticut Ave. complex approximately four years ago in a bankruptcy sale for just under $21 million, according to sources familiar with the property. The firm then undertook some renovations to the building prior to the sale with the Matan Properties' partnership.
Dunne notes that in the Westchester, N.Y. and Fairfield County, CT. office market, tenant demand remains soft, while the investment sales sector continues to be strong. He says that record low interest rates and the favorable investment returns real estate has posted compared to the stock market of late are the key factors fueling the robust activity that now exists in the office property sales market in the region.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
