NEW YORK CITY-After acquiring a 49% stake in 1540 Broadway late last year, HSBC Alternative Investments Ltd. and Washington, DC-based real estate investment firm EDGE Fund Advisors have now taken title here, acquiring the remaining 51% from CBRE Investors in the 44-story Times Square office tower. In conjunction with the deal, EDGE CEO Mark Keller tells GlobeSt.com that the JV also closed on a $350 million refinancing of the property with Metropolitan Life Insurance Co.
While Keller could not disclose the price of the transaction due to confidentiality agreements, data from Real Capital Analytics shows that the JV acquired the 49% interest in the building from CBREI in November 2010 for $520 million.
“We had certain rights from the 49%, we refinanced the property with MetLife and those two things came together,” Keller says, explaining that strong investor demand for class A space prompted the purchase. “CBREI, the owner of the 51%, and our 49% thought it was a good time to invest certainly because of the interest rates in the market. All those things came together to execute the transaction.”
The property, known as the Bertelsmann Building, is occupied by a mix of media and professional services tenants, including Viacom International Inc., Yahoo!, Major League Baseball, Pillsbury Winthrop Shaw Pittman LLP and the Xinhua News Agency. The building is 92% occupied, up 7% from when the JV acquired the 49% interest in the building in 2010. “It’s almost fully occupied,” Keller says, noting that CBRE’s CEO of the New York Tri-State Region Mary Ann Tighe leads the leasing team for the 907,000-square-foot site.
The purchase of the remaining interest in 1540 Broadway now adds the trophy tower to EDGE’s shelf along with 1625 I Street and 1350 I Street in Washington, DC. HAIL acted on behalf of HSBC’s “Club Programme” fund on the transaction. Bill Shanahan and Darcy Stacom represented CB Richard Ellis Investors in the transaction.
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