NEW YORK CITY—Columbia Property Trust (CXP) has added two Midtown South properties, including the New York City offices of Twitter, to its holdings here. The REIT said Wednesday afternoon that it had acquired 245-249 W. 17th St. and 218 W. 18th St. from New York REIT (NYRT) for $514 million.
“Our acquisition of these prime Midtown South buildings allows us to expand within New York, where we already held the largest concentration in our portfolio, and will further establish Columbia as a significant player in Manhattan's most dynamic office district,” says Nelson Mills, president and CEO of CXP. “We view these acquisitions, along with our recent share repurchases, as an excellent use of the capital raised from our non-core dispositions.”
NYRT, which is liquidating and winding down in accordance with a plan of liquidation, said Wednesday the two boutique Chelsea properties—which total 446,967 square feet—were part of the collateral for a cross-collateralized and secured loan in the original principal amount of $760 million. In connection with the sale, NYRT paid approximately $348 million on account of the loan, and received net proceeds of approximately $146.2 million after satisfaction of debt, pro-rations and closing costs.
Twitter's New York headquarters fill most of the boutique buildings on 17th Street, which include a six-story western tower and 12-story eastern tower. Another tenant of the two adjacent properties is one of the largest showrooms of high-end modern furniture chain Room & Board. The 12-story 218 W. 18th houses the New York City headquarters of beverage and lifestyle company Red Bull, along with several other office tenants. The properties are 100% leased.
“Based on the leasing momentum we are experiencing at our nearby assets, particularly with our recent track record at 315 Park Ave. South, we remain very confident in the Midtown South and Chelsea submarkets,” says Adam Popper, SVP for the eastern region at CXP. “TAMI and financial services users alike continue to embrace these submarkets as one of the preferred destinations for tenants in NYC, with strong demand for assets like these that offer smaller floor plates, fully renovated interiors and attractive amenities.”
The two properties increase CXP's New York presence to seven class A properties totaling 2.6 million square feet. Together, they comprise 44% of the REIT's overall portfolio based on gross real estate assets.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
