Macklowe Team Pitches Manhattan Offices
A joint venture between Billy Macklowe and Principal Real Estate Investors is offering a Midtown Manhattan office building valued at up to $150 million.
The 186,000-square-foot property, at 311 West 43rd Street, is 90% occupied. Bids are expected to range from $750/sf to $800/sf. Cushman & Wakefield is representing Macklowe, who invests via William Macklowe Co. of New York, and Principal, of Des Moines, Iowa.
The duo bought the 14-story building at yearend 2015 for $107 million, or $575/sf, from local shop Atlas Capital. Atlas had acquired it in 2013 for $40 million from Zuberry Development of New York.
The Macklowe partnership boosted the occupancy rate last year by leasing roughly 72,000 sf on five upper floors to shared-workspace provider WeWork, according to CoStar. It also pumped millions of dollars into a renovation that included a new lobby and the addition of a rooftop deck. Hakkasan, a high-end restaurant, has a lease on 13,000 sf of ground-floor space until 2027.
The offering is being pitched as having upside. Excluding WeWork, the average rent is $25/sf, well below the average asking rent of roughly $65/sf. So a buyer should be able to raise rents as leases roll over. Also, the large floorplates could help attract tenants to vacant space.
The property, built in 1905, is on the north side of West 43rd Street, between Eighth and Ninth Avenues in the Hell’s Kitchen neighborhood. It was once the headquarters of publisher Charles Scribner’s Sons.