TIAA-CREF acquires 21 Penn Plaza from Savanna/Feil Organization; Massey Knakal leased 225,000 s/f at the property
December 22, 2014 - New York City
Situated on the southeast corner of West 31st St. and 9th Ave., 21 Penn Plaza is adjacent to the Hudson Yards District. The property is within the epicenter of the $27 billion of investment currently underway on the far west side. Nearby developments include the Moynihan Station (across the street), Related Cos.' and Oxford Properties Group's Hudson Yards and Brookfield's Manhattan West.
The property offers convenience to commuter rail service, the West Side Highway, the Lincoln Tunnel and Hudson River ferries. The NYC subway system is accessible via nearby Penn Station and, next year, the extension of the No. 7 subway to 34th St. and 11th Ave. In addition, the final section of the High Line public park has just opened, extending to 34th St. and 12th Ave.
"We believe this property is well positioned to take advantage of the rapid changes and revitalization happening in midtown west," said Henry Dong, senior director, global real estate for TIAA-CREF. "Rents are on the upswing in the area and we see that trend continuing. The massive redevelopment of the neighborhood should make it a destination for employers, tourists, shoppers and new residents."
Following an investment of close to $5 million in base building upgrades to the property, including new lobbies, entrances and mechanical systems, Savanna and The Feil Org. leased 225,000 s/f of space to re-stabilize the property at 98% occupancy prior to marketing the property for sale through Bob Knakal and his team at Massey Knakal Realty Services.
"21 Penn Plaza is located in the path of progress of the exciting development occurring in the far west side of Manhattan," said Knakal. "Its location, combined with the quality of tenancy and capital improvements in the property make it an ideal home for companies seeking to define the frontier of what should become a new epicenter of activity in Manhattan."
"We are proud of the excellent work performed by our joint venture in transforming 21 Penn Plaza into a CORE/CORE+ asset," said Christopher Schlank, managing partner at Savanna. "We have made a significant investment in its infrastructure and enhanced 21 Penn Plaza's tenant base on our way to re-stabilizing it. It's a great asset in an exciting location experiencing rapid change," said Jeffrey Feil, CEO of The Feil Organization.
As noted, the property is currently 98% leased. Retail tenants include Avon, Dunkin' Donuts and H&R Block. Office tenants include Saks & Company, Langan Engineering and Amtrak. TheTIAA Real Estate Account, a TIAA insurance separate account, will hold the property following the acquisition.