NEW YORK CITY — Colliers International has brokered the sale of a two-building office portfolio in the Midtown South submarket of New York City for $115 million. Colliers arranged the sale on behalf of Yeshiva University, a private research university with six campuses in New York and one in Israel.
“Yeshiva University owned a portfolio of well-located, in-demand office properties,” explains James Murphy, executive managing director of Colliers International. “They felt that current market conditions provided an ideal time to sell, taking advantage of Midtown South’s record rents and lack of new product.”
The 12-story buildings, located at 24 & 28 W. 25th St. and 40 W. 25th St., total approximately 250,000 square feet. The buildings are located between Broadway and Sixth Avenue in Chelsea’s technology sector. Penn Station and various subway and bus lines are within walking distance.
The Midtown South submarket is the nation’s tightest office market, according to Colliers. The vacancy rate in the fourth quarter of 2012 was at 3.9 percent, a decrease from 4 percent in the third quarter and 4.5 percent in the fourth quarter of 2011.
Colliers attributes the low vacancy rate to job growth in the professional services and high-tech industries, which have increased the demand for office space in the submarket. New construction is being developed in Midtown South, but the supply under construction represents a minimal addition to the submarket’s office inventory.
Additionally, the averaging asking rent in Midtown South has increased to $47.36 per square foot in the fourth quarter of 2012, up from $46.80 per square foot in the third quarter and $41.68 per square foot in the fourth quarter of 2011, according to Colliers.
The buyer of the Yeshiva University office properties, a joint venture between Brickman Associates and DivcoWest, was represented in-house in the transaction. The companies plan to make capital improvements to the buildings in order to appeal to technology-based tenants.
Murphy, Michael Cohen, Louis Prisco and Margaret O’Keeffe of Colliers International represented Yeshiva University. Colliers International is the third-largest commercial real estate services firm in the world. The company has more than 12,300 employees operating from 520 offices in 62 countries.
— John Nelson