Empire State Realty Buys Manhattan Multifamily for $115M
REIT's multifamily play continues in deal funded by sale of office buildings.
Empire State Realty Trust (ESRT) gas acquired a seven-story multifamily at 298 Mulberry Street for $115M from Broad Street Development and a real estate fund affiliated with Crow Holdings Capital.
JLL represented the sellers, who acquired the apartment building for $92M in 2014. The 86K SF building, located at the corner of East Houston Street on the border between Soho and Noho, encompasses 96 market-rate units and ground-floor retail currently occupied by a CVS drug store.
The cash purchase is being funded by the Empire REIT’s sale of two Westchester office buildings in a 1031 exchange transaction.
Earlier this month, Empire closed on the sale to an undisclosed buyer of 10 Bank Street in White Plains for $42M in a transaction brokered by Newmark. The REIT is in contract to sell 500 Mamaroneck Avenue in Harrison for $53M.
The REIT—owner of NYC’s landmark Empire State Building—made a big move into the multifamily sector with its November 2021 deal to purchase a 625-unit portfolio of Manhattan apartment buildings for $307M.
After the November deal, which involved the acquisition of 561 10th Avenue and 345 East 94th Street, CEO Anthony Malkin said the REIT would continue to diversify its portfolio, adding multifamily and retail assets.
“Our investment team continues actively to underwrite new office, retail and multifamily opportunities where we think we can get an edge with our local knowledge, ability to spot special opportunities, and ability to solve others’ problems with our flexible balance sheet,” Malkin said in a Q1 earning call.
In a Q3 earnings call, ESRT reported that the leasing rate for the company’s office portfolio of nearly 10M SF had reached 89%, with 34 leases encompassing 335K SF in the third quarter.
Malkin said in the Q3 call that the company has achieved carbon neutrality for its portfolio.
“ESRT achieved carbon neutrality for our entire commercial portfolio in 2022. ESRT accomplished this through its industry leadership on in-building energy efficiency retrofit work, which has reduced operational emissions 54% at the Empire State Building and 43% portfolio-wide to date since 2009,” Malkin said.