American Realty Capital New York Recovery Reit (ARC) is to acquire the fee simple interest in an institutional-quality office building located at 218 West 18th Street in the Chelsea neighbourhood of Manhattan from a joint venture between Atlas Capital Group and GreenOak Real Estate.
The purchase price for the building is USD112m, exclusive of closing costs.
Last year, Atlas and GreenOak purchased the defaulted loan and subsequently took ownership of the property through a prepackaged bankruptcy restructuring. Since that time, Atlas and GreenOak have entered into lease agreements with Red Bull North America, SAE Institute of Technology and Yammer (a subsidiary of Microsoft Corp.) for seven floors of the building. Company 3 and SY Partners round out the tenant roster at the 166,000 rentable square foot property which is now 84 per cent leased.
"This acquisition will 'kick-start' 2013 for our fund by adding another institutional-quality office building to our portfolio," says Michael A Happel (pictured), chief investment officer of ARC. "This significant acquisition comes on the heels of the USD124.4m of purchases that we completed at the end of 2012. With this addition, our portfolio nears USD500m of asset value. 218 West 18th Street gives ARC its first exposure to the Midtown South sub-market known as Silicon Alley in exclusive Chelsea. The building has a roster of first-class tenants and has recently undergone a comprehensive renovation."