PREI owns the majority ownership in the property and agreed to the venture because the building meets the firms investment criterion – a corner office on an avenue, according to Jim Halliwell, managing director of acquisitions and dispositions for PREI.
The JV plans to invest an additional $6 million in renovations to turn the class B property into a class A one. Previous ownership began the renovations, which added a new façade and new showroom windows up to the fourth floor, according to Jesse Rubens, senior executive managing director for Murray Hill Properties. The planned renovations will include a complete overhaul of the elevators and lobby area, new windows for the entire building, renovated bathrooms and new mechanical systems as needed.
Rubens says renovations will take part in stages as leases terminate and floors become empty. The new elevator system should be completely installed in 2007.
The 400,000-sf, 25-story building is 95% leased. There are more than 50 tenants in the facility, including Escada USA Inc., Hallmark and One Step Up Ltd. Rubens says the building is 80% apparel/fashion companies and 20% office. After renovations are complete the split will probably by closer to 50/50. Both Rubens and Halliwell expect office tenants that are being priced out of the market above 42nd Street to consider 1412 Broadway a viable option.
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