Rockpoint Buys NY Offices for $465 Million
Rockpoint Group has paid $465 million for a Midtown Manhattan skyscraper that had never traded before.
The Boston fund operator closed in the past few weeks on its purchase of the 626,000-square-foot office building at 1700 Broadway, which is 95% occupied. Cushman & Wakefield brokered the sale for Ruben Cos. of New York.
At the $743/sf price, Rockpoint’s initial annual yield will be between 4% and 5%, in line with the capitalization rates on well-leased office buildings in Manhattan.
Ruben, led by local developer Richard Ruben, constructed the 42-story building in 1968. It was on land owned by the Shubert Foundation, with a ground lease running until 2028. After holding the leasehold interest for decades, Ruben bought the underlying land in early 2016 for $280 million, consolidating the ownership before selling to Rockpoint.
The Class-A building has some 608,000 sf of offices, 11,500 sf of retail space and 7,000 sf used for storage. There is also a 32,000-sf garage.
Ruben signed several new leases or renewals in recent years. The largest tenant, Gensler, moved into some 120,000 sf in late 2016. The design firm occupies floors 2-6 on a lease that runs until 2028.
CBS renewed a lease on 48,000 sf last year, also until 2028, according to media reports. CBS has long been a tenant in the building. It’s across Broadway from the Ed Sullivan Theater, which the network bought in 1993. Other tenants include LS Power, law firm Chaffetz Lindsey and accounting firm Friedman.
The L-shape property fills the east side of Broadway between West 53rd and West 54th Streets, and extends along 53rd Street to Seventh Avenue. The first 11 floors have floorplates of 23,000 sf. The upper stories are set back, with floorplates of roughly 13,500 sf.
The building is in the 30 million-sf West Side submarket, which was 92% occupied at yearend, outpacing the 90.5% rate for all of Midtown Manhattan. The submarket’s Class-A average asking rent was $77.52/sf, below the overall Midtown rate of $83.57/sf, according to Cushman.