NEW YORK CITY-Giving Midtown a big boost, American Realty Capital New York Recovery REIT announced Friday it has entered into a purchase and sale agreement to acquire the fee simple interest in 1440 Broadway, for a whopping $528.6 million. The seller is a joint venture team of a subsidiary of Rockpoint Group and Monday Properties, according to Real Capital Analytics.
The former company owned 80% of the property while the latter owned 20%. Eastdil Secured advised Rockpoint on this transaction. It was unclear who at Eastdil worked on the deal, but superstars Adam Spies and Doug Harmon had represented Rockpoint when it first purchased the property. Midtown has slipped behind Midtown South in recent months on asking rents.
Both Rockpoint and Monday declined to comment but it's not difficult to determine why the sale transpired: the JV—which only invested in the building last December—picked up the asset for $353 million. NYRR did not respond to requests for comment by press time.
The 25-story property is 95% leased and offers about 756,000 rentable square feet. Approximately 40% of the rental income from the property is derived from investment-grade rated companies. The largest tenant in the building is Macy's, which occupies 203,196 square feet, or approximately 27% of the structure. Some media companies also call the tower home, including Primedia (the firm behind about.com) and Advance Magazine Publishers, according to RCA. Those two leases, which both expire in the fourth quarter of 2015, span 171,000 square feet and 108,000 square feet, respectively.
In announcing the deal, NYRR CIO Michael Happel says, "The Times Square South neighborhood has significant long-term potential as the Times Square submarket pushes south and the Bryant Park submarket pushes north. This institutional-grade asset is in excellent physical condition and has a high-quality roster of tenants from various industries.”ARC's NYRR did not respond to a request for further comment by press time.
The asset bolsters NYRR's overall portfolio and strategy, Happel adds. “This purchase will increase our portfolio asset value to over $2.1 billion, including other recently announced acquisitions. We remain focused on building a first class company with a concentration on New York City real estate. Our team continues to identify and acquire strong assets in excellent locations, and at good prices, enabling us to grow our portfolio aggressively."
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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.
