NEW YORK CITY—In direct opposition to the three strikes rule, when a property has not one, not two but three things going forward it, investors are in.
Such was the case for the buyers of 88 University Pl. in Greenwich Village, who earlier this week secured a $70 million loan for their $75 million purchase of the 94,000-square-foot corner building. Mack Real Estate Credit Strategies provided the floating-rate loan on behalf of the sponsor—an investment group led by fashion designer Elie Tahari—which recently purchased the Midtown South property in an off-market transaction for approximately $75 million.
Mission Capital Advisors managing director Jonathan More, along with fellow Mission capital debt & equity finance group members Ari Hirt and Jamie Matheny, secured the loan. “The project has so many terrific components that it's a no brainer in terms of risk profile—which is low—while the upside is high,” More tells GlobeSt.com.
The location of the property and the fact that it has a forward lease with WeWork, a highly-desirable office tenant who, over time, will take space in the entire building, made the 11-story tower an easy sell, he notes. WeWork has agreed to take eight of the building's 10 floors of office space, with the company expected to eventually occupy all 10 floors.
“University Place is a retail corridor that many people feel is undervalued. Because of the foot traffic from the Union Square area, the area's new building for the New School, NYU and more, people think the $150 per square foot rents they've been getting should be more like $300 per square foot.”
Adds More, “You can't overstate the value of coming to the table with a tenant already in place. It mitigates the leasing risk of an asset because you know what you have from the get-go and it's a game changer from a financing perspective. Plus, from a branding perspective, WeWork is cool. There's a lot of buzz around it, it's hip, happening and what people want.”
As for the building's ground floor retail space, More asserts, "There already are very strong offers from international firms with substantial balance sheets. They include some soft goods offerings and some potential food uses."
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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.
