Stake in Lower NY Office Building on Block
JEMB Realty is shopping a 50% stake in 75 Broad Street, a Lower Manhattan office tower valued at up to $400 million.
JEMB, which would retain the remaining 50% interest in the 715,000-square-foot property, is pitching the offering as a value-added play, based on the potential to boost the 86% occupancy rate and raise below-market rents as leases roll over.
Cushman & Wakefield has the listing on the Class-B building, known as the New York Technology Exchange. The estimated value translates to up to $560/sf.
JEMB is simultaneously looking to refinance the Financial District property with a fixed- or floating-rate mortgage of up to $260 million. That would reduce to roughly $70 million the amount of equity that a buyer of the stake would have to kick in.
New York-based JEMB was co-founded by Joseph Jerome and Morris Bailey in 1990. It has owned the building since 1999. Jerome’s three sons, who are taking a more-active role in managing the firm, are expected to use the sale proceeds to finance new investments.
The 34-story building on Broad Street was constructed in 1928 as the headquarters of telecommunications firm ITT. JEMB acquired it nearly vacant and repositioned it, evenly dividing the space for office and telecom usage. AT&T is among the largest tenants, leasing 29,000 sf, according to CoStar.
Other tenants include Internap, North South Productions, the New York City Opera, Reliance Insurance, Human Rights First, Inteliquent, Rom Reinsurance, Artspace Marketplace and Toll Brothers. Millennium High School, a public school, leases three floors.
JEMB reportedly spent $40 million on upgrades through 2014. This year, it announced plans to upgrade the lobby, improve common spaces and construct “pre-built” offices ranging from 2,000-14,000 sf. The Art Deco building has multiple setbacks on upper floors that could be used as terraces, an amenity that could allow a buyer to increase rents. The property, which has ground-floor retail space, is between South William and Beaver Streets.