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Partnership Closes on Knickerbocker Buy

NEW YORK CITY-The heavy investor interest surrounding 1466 Broadway and similar office assets signals a trend, says RCA’s Fasulo.

By Paul Bubny | Updated on June 18, 2010

NEW YORK CITY-A partnership of Highgate Holdings, Ashkenazy Acquisitions Corp. and Crown Acquisitions has acquired the former Knickerbocker Hotel and an adjacent 10,000-square-foot lot at 1466 Broadway. The selling price on the 300,000-square-foot asset, which in recent years was positioned for office and which Istithmar World Capital gave back to Danske Bank in March after defaulting on a $300-million mortgage, is believed to be slightly more than $180 million. A Highgate spokesman tells GlobeSt.com the company cannot disclose the exact dollar amount, although a source familiar with the deal says the $180-million estimate is in the ballpark.

The investor interest swirling around the historic property, and the fact that there are now about half a dozen comparable Midtown and Midtown South assets on the market, point to a trend, Real Capital Analytics’ Dan Fasulo tells GlobeSt.com. “Because your core, class A-plus assets are getting this pricey already at this point in the cycle, and there’s still that wall of capital that wants to be in commercial real estate, some investors are beginning to look at going further out on the risk spectrum in order to get higher yields,” says Fasulo, managing director at RCA. That means properties with higher vacancies and other risk factors.

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