L&L Infinite acquires 575,254 s/f 600 Third Avenue office tower for $245 million
Manhattan, NY L&L Infinite has completed the acquisition of 600 Third Ave., a fully-modernized, 42-story 575,254 s/f office tower in the city’s Grand Central district.
L&L Infinite is joined in the new joint venture by affiliates of Mack Real Estate Group, BLDG and BD Blakely, replacing L&L Holding and an institutional investor in a transaction that values 600 Third Ave. at $245 million. The buyer, who secured a $215 million acquisition loan from Bain Capital, was advised by IGCP, an affiliate of L&L Infinite. The Newmark team led by Adam Spies and Josh King represented the seller and assisted on the debt, and Ken Zakin also from Newmark assisted on the equity.
This marks the first acquisition by L&L Infinite, a new venture launched earlier this year by industry veterans David Levinson and Marty Burger. L&L Infinite was formed to pursue opportunities in development, acquisitions, and debt strategies across the U.S. real estate market.
“Our leasing successes at 600 Third are a symbol of the resurgence of the Midtown East business district and the Grand Central submarket,” said Levinson, chairman of L&L Infinite. “This acquisition serves as validation from the investment community in 600 Third’s high-quality workspaces, strong tenancy and prime Grand Central location.”
“This complex transaction speaks to the breadth of expertise that L&L Infinite brings to the market,” said Burger, CEO of L&L Infinite. “Through our longstanding industry relationships, we assembled a team of premier investors and secured an attractive financing package that will enable us to build on the success of 600 Third.”
“We are excited to join L&L Infinite in the acquisition of 600 Third,” said Richard Mack, CEO of Mack Real Estate Group. “Although we have substantial prior experience investing in the office sector, we have been highly selective about committing equity to office investments. Today we believe that the combination of capital market disinclination toward office, New York’s strengthening office leasing market, and the asset quality, durable tenancy and embedded growth of 600 Third Ave. make it a compelling investment opportunity.”
“Our investment in 600 Third Ave. underscores our conviction in the positive momentum within the Grand Central office submarket,” said Justin Kleinman, executive vice president and chief operating officer of BLDG Management. “We are thrilled to partner with the outstanding teams at L&L Infinite and Mack Real Estate Group.”
“As return-to-office has become the established norm, companies continue to view New York City as a key hub for recruiting and retaining top talent. 600 Third has consistently outperformed its peers and is well-positioned for long-term growth and appreciation as supply continues to diminish across the Third Avenue corridor,” said Mark Gormley, a managing director at Bain Capital. “We are pleased to be the partner of choice for this top-tier investor group and look forward to supporting their growth plans for this high-quality asset.”
Originally built in 1970, the 575,254 s/f tower occupies the entire western blockfront between East 39th and East 40th Sts. It features efficient floor plans, high ceilings and light and air on all sides of the building.
The property has undergone a series of renovations, including lobby upgrades, elevator modernization, and building system improvements. 600 Third Ave.’s plaza was also redesigned to create a welcoming public green space with pathways that encourage pedestrians to circulate and relax. Additionally, an exclusive tenant amenity floor is in design and will include a wrap-around terrace, a lounge area and multi-purpose space.
Currently 92% leased, the property has consistently had strong occupancy, averaging 94% occupancy and never falling below 90% occupancy over the past two decades. Current market rents significantly exceed the in-place rents, and 600 Third is poised to benefit.
Notable companies with a presence at 600 Third include prominent law firm Polsinelli, strategic investment firm Energy Impact Partners and global investment management firm 3G Capital. The tower’s retail component is fully leased to a vibrant lineup of brands including Dunkin’, Shake Shack, Just Salad, PureGym and Chipotle.
Courtesy of L&L Holding