A joint venture of L&L Holding Co. and Normandy Real Estate Partners has agreed to pay $900 million for a storied, former freight warehouse in Manhattan’s Chelsea neighborhood.
The new owners plan to reposition the storage space into office space.
The building spans an entire block between 11th and 12th avenues and West 27th and West 28th streets. Tenants include Uber and L’Oréal USA.
The sales price triples the property’s valuation from four years ago, underscoring the area’s dramatic changes over the last several decades, reported The Wall Street Journal.
The Real Deal reported the asset was valued at $300 million in 2014 when GreenOak Real Estate purchased a 49 percent stake in Waterfront New York Realty’s 1.2 million-square-foot building.
The Manhattan office-leasing market continues to benefit from the positive growth in office-using demand driven by job additions, which translated into second quarter transaction volume that was over 25 percent above its five-year quarterly average, according to Avison Young. For the first half of 2018, leasing volume now sits slightly above its five-year average.
After a strong first quarter signaled a rebound in property sales, the second quarter tempered the trend with a mixed bag of results. Based on the results thus far, the transaction count for 2018 is on pace to rank ninth, and the projected $20.17 billion in annual sales volume would rank sixth among the past 10 years.
The Manhattan office market has continued its relatively steady performance over these past few years, with a slight trend downward. The projected $13.34 billion in office property sales expected in 2018 represents 41.0 percent of the 2015 high of $22.6 billion in sales, and while the number of transactions are expected to come in lower than previous years, office fundamentals appear stable.
To read the full report, click here.
