USAA Real Estate Co. completes acquisition of two mid-block office properties

USAA Real Estate Company (RealCo) completed the acquisition of two mid-block office properties located in the borough's highest growth submarket, Times Square South which gives onto the 34th St. retail corridor, a high traffic pedestrian neighborhood located between Time Square, Penn Station and Hudson Yards. Hudson Yards, expected to open to its first tenants in 2016 is the largest redevelopment project in the history of the United States, and with its dynamic mix of office, residential, restaurant and retail will be transformative to New York City and drive property demand and values throughout its own market and surrounding submarkets. RealCo's portfolio, known as "The Midtown West Collection" includes 234 West 39th St., a 91,466 s/f, 10-story property built in 1921, and 142 West 36th St., a 118,338 s/f, 17-story office building built in 1922. The offices, which are located a short walking distance from the Times Square and Herald Square subway hubs as well as New York's Penn Station and the Port Authority Bus Terminal sit between Broadway and 8th Avenue. The area is attracting many fast-growing technology, advertising, media and information technology tenants. Providing more color about the assets, Tom Bermingham, Managing Director of USAA Real Estate Company's New York office commented, "The buildings are presently fully leased at rents that are below market, thus offering significant upside potential in a one of Manhattan's hottest neighborhoods." "We are very pleased to be completing our first venture with Waterman Interests. I have been extremely impressed with Tod and his organization for some time now and together I'm confident we will add significant value to these assets. With its proximity to Midtown South and the new Hudson Yards development the Times Square South Submarket is experiencing a renaissance and we believe tenant demand will be quite strong," said Len O'Donnell, president and CEO of USAA Real Estate Company. Added Philip Waterman III ("Tod"), founder and managing member of Waterman Interests, "We are thrilled to have the opportunity to form a partnership with USAA Real Estate Company on the Midtown West assets and know that this transaction will allow us to utilize all of our team's core competencies to reposition this portfolio and deliver exceptional results for the benefit our investors, USAA RealCo, and the tenants in these buildings. We are also very happy to again be collaborating and investing with Savitt Partners, LLC, led by Robert Savitt, who will be spearheading the execution of the leasing strategy in this portfolio."