NEW YORK CITY—As is often the case with commercial real estate, the fund for which Prudential Real Estate acquired 511-541 W. 25th St. did so for the property's potential.
Adjacent to the High Line and featuring 300 feet of retail frontage along a prominent block of art galleries, the asset's image is set to be transformed through the acquisition, PREI's David Pahl, managing director, tells GlobeSt.com. The property, which consists of three interconnected buildings, also was taken over as it is in keeping with the investment strategy of the closed-end investment fund for which it was bought.
“The buildings have some vacant space to lease up and we have some rents well below market so as leases roll over the next four years, we can mark to market when they expire. The three properties have contiguous floors so people on the inside don't even realize they're going from one building to another. In 511 W. 25th, the tallest of the buildings, the corridors run right down the middle and the space is leased to smaller tenants.
“We want to lease to larger, full-floor tenants,” he explains. “Once the spaces are available, they will be totally gutted and redone. Also, because the three buildings appear separately on the outside, there's a branding opportunity. It's unique to have that much frontage in Chelsea so there's fantastic visibility. There's a lot to be done to raise the image of the building and create its identity, so we're working with L&L Holding Co., our joint venture parner, on branding.”
PREI and L&L also have plans to create a rooftop event space, Pahl says. “Approximately 20,000 square feet, the rooftop opens onto the High Line—and this is one of the few office buildings that faces the High Line, so we're looking into what kind of density we can get. We're not sure if it'll be just an event space or operated as a full-time restaurant with views of the High Line and the Hudson River.”
Either way, a rooftop gathering place is needed in the area, he notes. “Given the area's residential component, plus the art galleries, there's a need for event space.”
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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.
