Madison Realty Capital Acquires Manhattan Mixed-Use Property For $40.2M
- Jul 30, 2014
New York—Madison Realty Capital has acquired 361 East 50th St., a six-story mixed-use elevator building located in the Midtown East section of Manhattan, for $40.2 million.
Built in the 1940s, the 55,501-square-foot building has been family-owned prior to the sale. The building includes 43 residential units, seven commercial units and an additional 45,549 square feet of air-rights for further residential development.
“This property is well suited to our value-added investment strategy,” Josh Zegen, MRC’s co-founder and managing principal, says. “It’s a high-quality, cash-flowing asset with considerable repositioning potential, all within an attractive residential and commercial neighborhood. Plus, there is additional upside given the value and development potential of the air-rights.”
The building features 85 feet of frontage along East 50th Street along with 150 feet of frontage along First Avenue. The property also had a number of vacant units at close, which Zegen says was ideal from a repositioning standpoint.
“The trendy Midtown East submarket has seen considerable growth recently with several high-end residential condos currently in progress along First and Second Avenue, along with the addition of numerous upscale restaurants and specialty shops that have enhanced the neighborhood’s appeal,” Zegen says. “The area also benefits from its proximity to midtown, yet still remains a more affordable option for buyers compared to some other Manhattan locales.”
The residential component consists of several large studio, one- and two-bedroom apartments, as well as a five-bedroom, five-bath penthouse on the top floor. The commercial space is currently 100 percent occupied and is made up of six street-level retail units with storage space in the basement and one office located on the second floor.
According to Zegen, MRC plans to pursue an intensive capital expenditure program to reposition and modernize the property. The upgrading includes renovating several residential units into high-end apartments, enhancing overall curb appeal and improving operating efficiency.
“Our capital improvement plan will allow us to create long-term appeal for the property,” he says. “This is an excellent acquisition that will boost our already strong portfolio.”
Aaron Jungreis of Rosewood Realty Group represented both the buyer and seller for the transaction.