NEW YORK CITY-Banking on the continuing strength of the Downtown market, the Peebles Corp. has purchased 346 Broadway—a building that had been serving primarily as a courthouse—for $160 million, with plans to spend more to convert the asset into a five-star hotel and condominiums.
Peebles purchased the landmark edifice, in conjunction with the Elad Group, from the city; they intend to invest $100 million in the property, according to the Real Deal. Another $300 million will be spent on the project. Goldman Sachs also provided an acquisition and pre-development loan of an undisclosed amount, the source said. The remainder of funds is from other debt.
The city's Economic Development Corp. did not respond to a request for comment by press time. The buyers were represented by Howard Michaels, chairman, Carlton Group. This transaction—along with the $525 million financing of the Park Lane hotel—represents approximately $1 billion of deals Michaels has put together in the last couple of weeks.
Located in Tribeca, 346 Broadway was designed by McKim, Mead & White as the headquarters of the New York Life Insurance Company in 1898. It currently houses the city's Criminal Summons Court and part of its Probations Department.
The hotel component will include 50 to 100 rooms over two floors on the eastern Broadway side of the building. Peebles said he is in talks with two five-star hotel brands, but declined to disclose which ones. The opening date is targeted for 2016.
Plans call for 100 to 140 condo units, the prices of which are yet to be determined. Peebles previously said that prices would start at about $1,500 to $1,600 per square foot, but is now aiming for a higher target. He dubbed this project the “prewar alternative to 56 Leonard,” referring to a condominium project under construction down the street.
“The market really has moved and created tremendous strength,” Peebles tells the Deal.
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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.
