Flatiron District in Midtown South. Credit: Jeffrey Zeldman
NEW YORK CITY— Tribeca Investment Group, PGIM Real Estate and Meadow Partners have entered into a 99-year ground lease at 295 Fifth Ave., a 17-floor, 700,00 square foot office tower that will undergo a $300 million reposition into a Class A office building.
Situated in the Midtown South submarket on a full block on Fifth Avenue between East 30th and East 31st streets, the property's floor plates are sure to demand attention from the submarket, which has become one of the most active office markets in Manhattan. Midtown South had a record year in 2018 for leasing activity and asking rents, and has surpassed Midtown as one of the priciest office markets in the city, according to data from CBRE.
"As the supply of large-block office space across the city has become increasingly constrained, opportunities to acquire properties of this size and quality are rare," said Elliott Ingerman, co-founder of Tribeca Investment Group, a private real estate investment firm, in a prepared statement.
Tribeca Investment welcomed the opportunity to partner with PGIM and Meadow to bring new large blocks of space to the market that has seen a lot of demand from technology and finance companies in search of access to renovated historic buildings and Class A glass and steel towers, which the area is ripe with.
For over 20 years, Tribeca Investment has redeveloped assets all throughout Manhattan. The firm plans to use its expertise to guide the project forward and to account for the market's growth drivers by delivering large, flexible floor plates over 40,000 square feet and ceiling heights ranging up to 16 feet for greater flexibility for companies scaling up, according to Ingerman.
The reposition of 295 Fifth Avenue will include a new lobby, retail storefronts, amenity spaces and mechanical upgrades. Also, tenant spaces will become contemporary loft offices. A large glass add-on that offers panoramic views of Midtown will go on the rooftop. CBRE and STUDIOS Architecture will act in the design, construction and lease-up of the property.
"The Midtown South neighborhood has been particularly attractive to tenants, outperforming the broader market as a result," said Cathy Marcus, PGIM Real Estate's global chief operating officer and Head of the United States, in a prepared statement. "As supply in Midtown South continues to be absorbed, we recognized a rare opportunity to reposition 295 Fifth Avenue into what will become a preeminent office asset located within a highly sought-after submarket."
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Mariah Brown
Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.
