NEW YORK CITY-In continuing its retail expansion in Manhattan and the outer-boroughs, American Realty Capital New York Recovery REIT is under contract to acquire two retail sites in Greenwich Village and Howard Beach, Queens, for $36.5 million. Michael Happel, chief investment officer and executive vice president for the company, tells GlobeSt.com that the REIT will acquire four retail condominiums at the base of One Jackson Square at 122 Greenwich Ave. from sellers RFR Realty and Hines and a Duane Reade Pharmacy at 163-30 Cross Bay Blvd. from Wharton Properties.
The properties are being acquired through the REIT’s $1.5 billion equity fund. Happel expects the transactions to close within 60 days and anticipates more deals of this nature in weeks to come. “We are building a portfolio of New York real estate,” he says. “Our strategy is to focus on existing income-producing commercial real estate in the five boroughs, so we do expect to have many more acquisitions of this type. We will be buying a combination of mostly office and retail properties, but selectively, other property types, such as multifamily, apartments, even parking garages.”
The One Jackson Square portfolio includes four retail units containing approximetly 7,080 rentable square feet at the ground floor of the30-unit luxury condominium building. Out of the four, 78% of the retail spaces are occupied, with two of the spaces currently leased to TD Bank and one leased to Starbucks. The remaining fourth site is open.
The Duane Reade site is a freestanding, one-story pharmacy on Cross Bay Boulevard’s commercial corridor totaling approximately 9,767 rentable square feet. The 15-year long-term lease is guaranteed by Walgreen Co., which purchased the Duane Reade chain in 2010 to expand its reach in the New York metropolitan area. “In terms of the specific asset, one thing that we really like here is that there is a long-term lease with Duane Reade, which is now owned by Walgreens, so we now get Walgreens credit on the lease,” Happel says. “For us, it is a good, solid cash-flowing asset in an area where we think there is a longer-term growth potential.”
In total, the two newest acquisitions will expand ARC’s New York Recovery portfolio to $120 million in assets.
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