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April 18, 2018  

Offices Near Manhattan's High Line for Sale

A majority stake in a new boutique office building along Manhattan’s High Line park is in play.

A joint venture between Property Group Partners and W.R. Berkley has hired Cushman & Wakefield to shop its roughly 75% stake in the 114,000-square-foot property, at 860 Washington Street.

Meanwhile, the Romanoff family, which holds the remaining 25% interest, evidently has an option to buy out the Property Group/Berkley team, but the details couldn’t be learned. The family, which operates via Romanoff Equities, has tapped CBRE to line up a new partner that would buy the 75% stake if Romanoff exercises its option.

The 10-story building, which is fully leased, could be worth as much as $350 million, or just over $3,000/sf. The property, completed in 2016 on a speculative basis, features floor-to-ceiling windows, high ceilings and column-free floorplates. The tenants include Chinese e-commerce behemoth Alibaba, Delos Living and Social Finance. Tesla opened a first-floor showroom for its electric cars around yearend.

The building, which is expected to be designated LEED silver, is between West 13th and West 14th Streets in the Meatpacking District. It abuts the High Line, a major tourist destination.

The Meatpacking District is one of Manhattan’s hotter office markets. The neighborhood’s 5 million sf of space is 98% occupied at rents that routinely exceed $100/sf. That performance has increased investor interest in the submarket, as did Google’s $2.4 billion purchase of the 1.2 million-sf Chelsea Market last month from Atlanta-based Jamestown Properties, which was represented by Cushman. That office/retail building fully occupies the block stretching from Ninth to Tenth Avenues, between West 15th and 16th Streets.

Meanwhile, Invesco Real Estate of Dallas has just agreed to buy the leasehold interest in another Meatpacking District property — the 93,000-sf office building at 430 West 15th Street — for almost $160 million, or $1,720/sf. The capitalization rate is 4.75%. The seller, TIAA unit TH Real Estate, is being advised by Hodges Ward Elliott and Cushman. The building is fully leased.