NYRR to Purchase 149 KSF NYC Office Tower for $65M
- Nov 09, 2012
American Realty Capital New York Recovery REIT Inc. has been doing quite a bit of buying over the last couple of months and now it is on the verge of adding a fully leased Manhattan office property to its portfolio. The REIT has entered into an agreement to acquire the 149,000-square-foot building at 229 W. 36th St. from Real Estate Capital Partners for $65 million.
The office asset last changed hands in 2007, when Real Estate Capital Partners picked it up for $57.6 million. The owner landed a big fish for the tenant roster just one year later when American Language Communication Center Inc. committed to 70,000 square feet under a 20-year lease agreement.
NYRR’s acquisition of 229 W. 36th St. will mark its second purchase in the Garment District; the REIT signed a deal to snap up the 118,000-square-foot office building at 256 West 38th St for $48.6 million in October. NYRR has its reasons for shopping in the Garment District, and a change in area dynamics is one of them. “The continuing recovery of the New York City office market is punctuated by near-record 5.6 percent direct vacancy in the Midtown South submarket, and this is putting upward pressure on rents in the adjacent Garment District submarket as some office tenants are priced out of Midtown South and moving to the Garment District,” Adam Schorsch, vice president with NYRR, told Commercial Property Executive.
Schorsh also points to the historically strong rent growth in adjacent submarkets as another one of the Garment District’s attractive features. And there’s more. “The potential re-zoning, currently under consideration by the City, would positively affect property values and rents in the Garment District,” he added.
However, NYRR is not limiting itself to certain neighborhoods. Last month, the REIT closed the $13 million acquisition of a fully occupied, 20,000-square-foot commercial property in Brooklyn. And in September, NYRR grabbed a 50-unit multi-family destination and a 36-space parking facility, also in Brooklyn, for $31.5 million.