221 West 17th St. (NYLJ/Rick Kopstein)
RXR Realty has closed on the deal to acquire 61 Broadway from 61 Broadway Owner LLC, an affiliate of Broad Street Development, for $330 million, after being in contract for about two months. RXR also announced that it has secured a $200 million loan from HSBC Bank USA.
“The property fits nicely with RXR’s stated strategy to enter the downtown market,” said chairman and CEO Scott Rechler. The building has “great bones and technology” and with the “completion of a recent capital plan by the former owners, it was very well maintained,” he said.
The 33-story Broadway building, with more than 786,900 square feet, is at the corner of Exchange Place in the Financial District.
Joshua Mermelstein, a partner at Fried, Frank, Harris, Shriver & Jacobson; Brian Kniesly, tax partner, and associates Steven Fields and Alexander Sutherland represented RXR Realty in the acquisition of the property and in the loan agreement. RXR was represented internally by vice chairman and general counsel Jason Barnett.
Eli Dweck, a partner at Wachtel Missry, and associate Anthony Bonan, represented the seller.
Steven Herman, a partner at Cadwalader, Wickersham & Taft, and associate Jessica Wong, represented HSBC.
RXR received $185 million at closing and another $15 million for future capital expenditures and leasing commissions, according Jones Lang LaSalle’s capital markets team. The building’s current tenant occupancy is more than 90 percent, with the majority of leases reportedly due to expire soon. Rechler said 61 Broadway is a good alternative for “tenants getting pushed out of Midtown South.” Based on lower rents, location, floor plates and access to light, he said he hopes to attract the attention of creative firms and technology companies.
“The neighborhood is moving toward a ‘live, work, play’ environment, which is gaining significant momentum among today’s work force,” Kellogg Gaines, a managing director at Jones Lang LaSalle, said in a statement.
RXR is one of the largest owners, managers and developers in the New York tri-state area with a portfolio that includes 87 properties, containing about 17.7 million square feet.
A team from Jones Lang LaSalle’s capital markets group led by Gaines and Brett Rosenberg, senior vice president, included vice chairmen Richard Baxter, Jonathan Caplan, Yoron Cohen and Scott Latham, assisted Broad Street Development in the sale and financing of the property.
RXR’s Rechler and Frank Patafio, senior EVP and head of acquisitions handled the acquisition along with William Elder, EVP and managing director for New York City, and Frank Pusinelli, EVP of operations, property management and construction.
With a focus on redevelopment, Delshah Capital has purchased an office building at 221 W. 17th St. for $26.4 million. The 33,000-square-foot property, located between Seventh and Eighth avenues, was sold by Doreen Interiors, a family-operated design business.
Delshah is partnering with On the Level Enterprises (OTL) and an institutional investor to turn the loft-style property into luxury residential condominiums. The team secured financing from CapitalSource.
Stephen Epstein, a partner at Jaspan Schlesinger, represented Delshah in the acquisition of the property.
William Weisner, a partner at Tarter Krinsky & Drogin, re-presented Delshah in the financing and development of the prop- erty.
Bryan McCrossen, a partner at Donovan LLP, and attorney Christopher Palmese, represented the seller.
Tzvi Rokeach, a partner at Kramer Levin Naftalis & Frankel, represented CapitalSource.
This area is a “prime location for luxury condominiums” Michael Shah, Delshah’s principal, CEO and founder, said in a statement. The Chelsea property is adjacent to another successful condominium project, the Walker Tower, he added. “The condominiums are benefiting from the commitments Twitter, Google, Facebook, Barneys New York and others have made to the neighborhood,” he said.
The redevelopment of 221 W. 17 St. includes the addition of four floors to create a 10-story luxury condo building with retail space on the ground floor.
Delshah’s strong relationships with its partners and investors in the redevelopment of 221 W. 17th St. and other properties “demonstrates our firm’s commitment to delivering superior risk adjusted returns,” said Jeffrey Bogino, senior vice president and managing director.
Founded in 2006 by Shah, Delshah is a full-service commercial real estate investment firm specializing in residential, retail and office properties in New York City. Before starting the real estate firm, Shah was an attorney with Wachtell Lipton Rosen & Katz in its mergers and acquisitions group.
Delshah owns or manages more than 1,700 residential units across the five boroughs of New York City with more than 2 million square feet, including Renwick Modern, a luxury condominium at 22 Renwick St. on the lower East Side.
On The Level is a New York City-based management and real estate development firm, founded by John Carson and Angelo Cosentini more than 25 years ago. The firm specializes in design, finance and construction. It has developed more than 1 million square feet of residential, retail and commercial properties, including Blue Condo, a new mixed-use condo at 105 Norfolk St. in the lower East Side.
Hall Oster and Brock Emmetsberger, first vice presidents of sales at Massey Knakal Realty Services, handled the deal on behalf of the seller.
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