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New York, NY - ARC purchases 256 West 38th St. through Studley for $48.6 million

2013-01-03

New York, NY American Realty Capital New York Recovery REIT Inc., a non-traded real estate investment program, has purchased 256 West 38th St. from a joint venture of East End Capital and GreenOak Real Estate for $48.6 million in a sales transaction brokered by international commercial real estate services firm Studley. 

The property, located between Seventh and Eighth Aves. in Times Square South, is steps away from one of the city’s largest transportation hubs and cultural destinations, including Penn Station, Madison Square Garden and Herald Square.

“With demand outpacing supply for quality New York investment properties, the area of Midtown just below Times Square is becoming a favorite market among both tenants and investors,” said Will Silverman, senior managing director in Studley’s Capital Transaction Group. “The area is steadily transforming from fashion to a diversified mix of industries, including tech, media, finance and other professional services.”

The seller in the transaction was a joint venture of East End Capital and GreenOak Real Estate, which had acquired the 118,200 s/f office property in 2011 for $30 million, or $250 per s/f. Over the past year, ownership created value via the implementation of a multi-million dollar renovation program that included the lobby, elevators, bathrooms, HVAC, façade and windows.  The efforts culminated in the signing of an anchor lease with a publicly traded company, Cache, Inc.

“We acquired an asset that was both capital starved and operationally distressed.  By applying institutional quality management and improving the physical infrastructure of the building, over the course of eighteen months, we brought occupancy to just under 90% and more than doubled the net operating income,” said David Peretz, managing principal at East End Capital. The property sold for over $400 per s/f. Mark Van Zandt, Head of East Coast Investments at GreenOak, said, “together with the team at East End, we are very proud to have created such value at 256 West 38th St.”

Woody Heller, together with Will Silverman, Eric Negrin and Daniel Parker of Studley’s Capital Transactions Group, represented the seller in the sale.

The building is now occupied by a mix of fashion, technology and professional service tenants, including Cache, United Auto Workers, Insight Research, Gerard Yoscaand J’Envie.

About Studley

Studley is the leading commercial real estate services firm specializing in tenant representation. Founded in 1954, Studley pioneered the conflict-free business model of representing only tenants in their commercial real estate transactions. Today, with 19 offices nationwide and an international presence through its London office and AOS Studley, a partnership with Paris-based AOS, Studley provides strategic real estate solutions to top-tier corporations, not-for-profit organizations and law firms.

About GreenOak

GreenOak is an independent, partner owned, real estate focused principal investing and advisory firm with offices in New York, Los Angeles, London and Tokyo. Formed in 2010 by John Carrafiell, Sonny Kalsi and Fred Schmidt, who formerly led Morgan Stanley’s Real Estate Funds, GreenOak is a highly focused global platform with an experienced and cohesive senior team that possesses a long and successful track record investing in and managing real estate globally.

About East End Capital

East End is a real estate investment firm founded by Jonathon Yormak and David Peretz. The principals have acquired and operated 25 million square feet of property valued in excess of $12 billion. East End targets office, retail and residential properties in major markets on the east coast of the United States, primarily New York, Boston and Washington D.C.  East End’s one million s/f mixed-use portfolio is currently situated exclusively in New York City. 

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