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May 15, 2019  

Rudin Shops Offices in NY Financial District

Rudin Management is marketing a Lower Manhattan office tower that it built in 1962 and has owned ever since.

The 387,000-square-foot building, at One Whitehall Street, is estimated to be worth at least $515/sf, or $200 million. Cushman & Wakefield is advising New York-based Rudin, which is led by cousins Bill Rudin and Eric Rudin.

The 21-story property is fully leased, but is being pitched as a value-added play. The investment strategy is to renovate and seek to boost below-market rents as leases roll over.

In addition to modernizing the office space and lobby, a buyer could create amenities, such as conference centers, and improve terraces on floors 9, 15 and 20.

The current range of rents is roughly 21% below the projected range of $55-70/sf that the space could command after upgrades, according to marketing materials. That higher level still could appeal to tenants priced out of Manhattan submarkets like Midtown South, where the average Class-A rent is $93/sf. With leases on two-thirds of the space rolling over within six years, investors are being told they could boost net operating income 40% by 2026.

Cushman is also touting the active redevelopment in Lower Manhattan, including the rebuilding of the nearby World Trade Center complex.

The building’s rent roll includes Lifespire, Regional Plan Association, TransitCenter, Topps and Winter Reporting. Ground-floor retail tenants include the U.S. Postal Service and Duane Reade.

The Financial District property is on the east side of Whitehall Street between Bridge and Stone Streets, one block east of Battery Park. It’s across the street from a subway station and a few blocks north of the Staten Island Ferry terminal. Offices above the 10th floor have protected views of the Hudson River, thanks to low-rise surrounding buildings and an easement.

The Rudin family, one of New York’s real estate dynasties, is a long-term holder that only infrequently puts properties up for sale. But it listed another Financial District property two weeks ago with Eastdil Secured.

The Rudins constructed that 270,000-sf building, at 110 Wall Street, in 1964. Bids are expected to hit about $160 million, or $591/sf. WeWork is leasing virtually the entire 27-story property until 2041, with space divided between its office and co-living platforms. The lease carries some $210 million of contractual revenue. There is also 10,000 sf of ground-floor retail space.

The two Rudin offerings were described as routine portfolio management by market pros.