The 12-story building is located between Ninth and Tenth avenues and comprises roughly 300,000 sf. The tenant roster is a mix of office and industrial full-floor occupancies including global media giant Viacom Inc.
Grubb & Ellis managing director Neil Helman and associate managing director Art DellaSalla brokered the deal, which includes three renewal options that bring the maximum term to 99 years. Vincent Carrega, an executive managing director at Grubb, would not get into the financials of the deal, but tells GlobeSt.com, "We valued the building in excess of $30 million and net leased it at a rent that was commensurate with that value."
According to Carrega, the Winter Organization's net lease gives it complete control over the building, and the firm plans on improving the property to take advantage of the current decentralization trend as well as major development around Columbus Circle, anchored by the AOL Time Warner Center. "The 99-year net lease structure is tantamount to a sale," he tells GlobeSt.com. "The Winter Organization plans to upgrade the property with new mechanicals, elevators, windows and façade." Also planned is a second lobby with a separate, dedicated entrance that will create a "building within a building" for a large user--75,000 sf or more.
Winter Organization principal David Winter stresses the "resurgence in this neighborhood" as a major motivating factor for taking on the property. "This was an exciting opportunity for us to take part in a long-term play here," he tells GlobeSt.com.
Partner Benjamin Winter notes that while part of the tenanting strategy will be to take attract back-office operations of decentralizing companies, the building will also be marketed to front-end business. "I don't anticipate that this will just be the mailroom of some corporation," he tells GlobeSt.com.
Carrega notes that the ownership, investment group 423 West 55th Street LLC, was "extremely selective about who we leased this building to." Winter's bid won out over higher offers, he says, because the fit was right. "Winter was one of a few operators with a first-class reputation, a good track record and good financials, and they are the kind of people that our clients felt comfortable doing business with."
"The owners recognized that their building's neighborhood is improving, with several new residential structures plus the Alvin Ailey American Dance Theater project under construction," says Michael Gottlieb, also an executive managing director with Grubb. "They came to us seeking to retain their long-term ownership of this asset: but they wanted a solution that would allow them to upgrade the building--in keeping with the neighborhood--while increasing their income streams and improving their tax situation. Developing and effecting that creative solution was our key contribution."
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