Madison Realty Capital (MRC) has purchased 361 East 50th, a six-storey mixed-use elevator building located in the Midtown East section of Manhattan.
The off-market transaction was valued at USD40.20 million.
Aaron Jungreis of Rosewood Realty Group represented both the buyer and seller.
The 55,501 square-foot property has been family-owned by the seller since it was first built in the 1940s. The property includes 43 residential units, seven commercial units and an additional 45,549 square feet of air-rights for further residential development. It also features 85 feet of frontage along East 50th Street along with 150 feet of frontage along First Avenue. The property had a number of vacant units at close which was ideal from a repositioning standpoint.
MRC intends to pursue an intensive capital expenditure programme to reposition and modernize the property, which will include renovating several residential units into high-end apartments, enhancing overall curb appeal and improving operating efficiency.
"This property is well suited to our value-added investment strategy. It's a high-quality, cash-flowing asset with considerable repositioning potential, all within an attractive residential and commercial neighbourhood. Plus, there is additional upside given the value and development potential of the air-rights," says Josh Zegen, co-founder and managing principal of MRC. "The trendy Midtown East submarket has seen considerable growth recently with several high-end residential condos currently in progress along First and Second Avenue, along with the addition of numerous upscale restaurants and specialty shops that have enhanced the neighbourhood's appeal. The area also benefits from its proximity to midtown, yet still remains a more affordable option for buyers compared to some other Manhattan locales.
"Our capital improvement plan will allow us to create long-term appeal for the property. This is an excellent acquisition that will boost our already strong portfolio."
The residential unit mix consists of several large studio, one-bedroom, and two-bedroom apartments as well as a five-bedroom, five-bath penthouse on the top floor. The commercial space is currently 100 per cent occupied and is composed of six street level retail units with storage space in the basement and one office located on the second floor.