NEW YORK CITY — KPG Funds has received a $50 million construction loan for 40 Crosby, a boutique office redevelopment project in the high-end SoHo district of Lower Manhattan.
The five-story cast iron building totals 70,000 square feet, including prime retail space on the ground floor with Broadway frontage. KPG plans to rebrand the property as The Crosby upon completion. KPG bought the asset in early 2022 and immediately began planning the redevelopment.
Sabal Investment Holdings and GDS Brightstar provided the construction loan. Nick Scribani, Dustin Stolly and Jordy Roeschlaub at Newmark arranged the financing.
According to Rod Kritsberg, KPG’s co-founder and chief investment officer, the three-year construction loan will be used to give 40 Crosby a full-building renovation, keeping in line with KPG Funds’ standard to transform it into one of the “most desirable office and retail assets in the neighborhood.”
Improvements will consist of a separate entrance on Crosby Street with high-end, pre-built office space and significant capital allocated to the lease-up of the specialty retail space fronting Broadway. The asset offers flexible floorplates to cater to multiple tenants or contiguous floors for a flagship headquarters location. The office space features up to 18-foot ceiling heights, 20 oversized windows bringing in natural light, a cast iron façade and new management and security systems.
“We continue to identify high-quality assets and real estate opportunities in New York for our partners and investors,” says Alan Rudikoff, partner and co-founder of real estate firm GDSNY, the parent company of GDS Brightstar. “40 Crosby is an iconic SoHo cast iron building in a triple-A location, and we are proud to be a part of its continued success.”
“Bespoke office is on fire, and we can’t build fast enough to accommodate the demand for our signature KPG office product,” says KPG co-founder and CEO Greg Kraut. “The demand for office space post-COVID is being redefined in 2023 by landlords who provide an ultra-high-end experience for their tenants in highly desirable locations.”
Offered on the lower-level and ground floor, the 18,000-square-foot retail space will be an open-space design catering to a prospective big-box tenant seeking prime location in the popular SoHo neighborhood. According to Kraut, discussions have already commenced with prospective tenants, including prominent names in grocery and experiential uses.
Manhattan-based KPG is a value-add owner and operator that purchases architecturally significant but aging Class B and C properties and converts them to modern Class A assets.
— Jeff Shaw