Eastern Consolidated named exclusive agent to market 261 East 78th Street

Manhattan, NY Eastern Consolidated has been retained as the exclusive agent to sell a six-story, 17,266 gross s/f medical office building at 261 East 78^th St. on the Upper East Side between Second and Third Aves. There are seven floor-through tenants, including the basement, with an average 5.5 years remaining on the existing leases.   Stuart Gross, executive managing director and principal, was selected by the owner to market the property, and his appointment by the U.S. Bankruptcy Court to oversee the sale is being finalized. Chris Matousek, director, financial services, is the analyst for the deal. “This property is an ideal 1031 exchange investment because it offers a buyer the opportunity to acquire a trophy Upper East Side medical office building with secure in-place cash flow and minimal landlord responsibilities,” Gross said. “This building likewise fits well with a high-quality family office portfolio where long-term and predictable income are more attractive than the value added asset play.” The medical office building was constructed in 2009, has been well-maintained and managed, and is fully leased to a mix of primarily medical office tenants at market rate rents that include escalation clauses. Gross noted that the property is a rare opportunity because the Upper East Side has exceptionally high barriers to entry, resulting in an office submarket vacancy rate of 2 percent and one of the highest average asking office rents of any submarket in Manhattan. Because of this, and the fact that the tenants have invested a substantial amount of their own capital to build out their respective floors, the probability of lease renewal is significantly enhanced. The Upper East Side is the densest neighborhood in Manhattan in terms of population, making it not only a hot spot for restaurants, shopping and nightlife but also for medical and therapeutic services. In broader strokes, the Upper East Side is well regarded as the home of many of the world’s most important museums (including the Metropolitan Museum and the Guggenheim) and exceptional shopping and dining. The neighborhood also boasts many of Manhattan’s most elite private schools (Spence, Chapin, and Dalton, for example) as well as its finest hospitals, including Memorial Sloan Kettering, Mount Sinai, New York Presbyterian, and Lenox Hill. The Lexington Ave. subway lines at 86th St. and 77^th Street provide easy access to Midtown and Lower Manhattan plus crosstown and uptown/downtown bus service is available on East 79th Street, East 86th Street, and all avenues. The addition of the Second Ave. subway line will further strengthen demand on the Upper East Side, as additional commuting options to other areas of Manhattan become available, and the retail landscape is returned to normal.