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NEW YORK CITY-Archstone-Smith has inked a deal to acquire the Gershwin, a 550-unit high-rise apartment, for approximately $342 million. The 40-story site is located on Eighth Avenue between 49th and 50th streets in Midtown West.
The community offers studio-, one- and two-bedroom apartments with amenities that include 24-hour concierge, health club, indoor swimming pool, sunbathing terrace and a 120-space on-site garage. Nearly 41,200 sf of retail space is fully occupied with tenants that include the Palm Restaurant, Thalia Restaurant, a dry cleaner and the Food Emporium. Archstone did not release the name of the seller, but according to city records, the owner was Resnick Eighth Avenue Associates LLC. Douglas Harmon of Eastdil brokered the transaction.
R. Scot Sellers, chairman and chief executive officer of Archstone, says the New York City metropolitan area currently represents approximately 13% of the firm's national portfolio, based on total expected investment of operating and development communities, including joint venture developments. Archstone made its first Mahattan acquisition in 2002.
Last August, Archstone acquired two high-rise apartment communities--the Aston, a 266-unit community Chelsea, and the Foundry, a 222-unit community in Clinton neighborhood. The Aston sold for $195 million, while the Foundry traded for $87.6 million. Other area holdings include the Sonoma in Murray Hill, the Park Hudson on West End Avenue, Hudson Park in Hoboken, NJ, Archstone Westbury on Long Island and Archstone Stamford in Connecticut. The company is also developing the Mosaic, a 627-unit community in the Clinton neighborhood of New York City. With the acquisition of the Gershwin, the company's current committed total expected investment in the metropolitan area totals $1.5 billion and 3,283 units.
Equity for the acquisition was funded with tax-deferred exchange proceeds from dispositions of non-core assets and $7.5 million of operating partnership units. Archstone-Smith also assumed $100.5 million of tax-exempt floating rate bond financing and $11.8 million of conventional debt at an estimated combined all-in interest rate of 4.1%.
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