NEW YORK CITY-Continuing the buying spree it's been on all year, American Realty Capital New York Recovery REIT has snapped up two Manhattan assets—a Downtown office tower and a hotel that's slated to open in October—for a combined price of $188.5 million.
According to industry data, NYRR and joint venture partner East End Capital took over 123 William St. for $40 million from the Chetrit Group, which bought the property back in July of 2005. The building was turned over to a special servicer in May 2011. Industry data shows that, prior to this purchase, the building had a distressed loan of $90 million. However, NYRR reports that no such loan existed.
The 27-story tower features 495,739 square feet of rentable space and is just 50% occupied. The joint venture made the purchase because it shares the bullish sentiment on Downtown Manhattan that many local investors currently have, NYRR CIO Michael Happel tells GlobeSt.com.
"We bought the property, along with East End, because we see a great opportunity to reposition the building and create value by investing capital to improve the building and lease it up," he says. "Also, we believe this property will benefit from the on-going transformation of Downtown Manhattan from a '9 to 5 market' into a '24/7 market.'"
Meanwhile, NYRR has purchased a leasehold interest in the new Viceroy New York for $148.5 million from Ark Investment Partners. The 29-story, 240-key property will be managed by Viceroy Hotel Group, which currently manages luxury hotels in locations including Santa Monica, Miami, Beverly Hills, Snowmass, Anguilla, Abu Dhabi and the Maldives.
Adds Happel, "Once these pending acquisitions are closed, our total portfolio, at cost, will approach $1 billion, with approximately 90% of our portfolio—by purchase price—concentrated in Manhattan. Additionally, we are excited to add our first hotel asset."
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
