STARWOOD BUYS NYC OFFICE BUILDING
NEW YORK CITY — Starwood Capital Group has acquired the 571,667-square-foot 1372 Broadway, a retail and office building located at the intersection of 37th Street and Broadway in midtown Manhattan, from BLDG Management for an undisclosed price.
“We are pleased to complete our second deal with BLDG within the past couple of years,” says Chris Graham, managing director of acquisitions at Starwood. “We believe this is an exceptional investment due to its high double-digit, cash-on-cash returns on our fund equity over our anticipated hold period, supported by the length of the leases and credit of its tenants.”
The 21-story building is fully leased, and contains retail space on the ground and mezzanine levels. The property was purchased on behalf of Starwood Distressed Opportunity Fund IX, which raised $1.2 billion in its first round of marketing. Starwood plans to raise between $2 billion and $3 billion for the fund.
“We are excited to purchase a strong rent roll in one of the best office markets with rents close to market lows at a significant discount to replacement cost,” says Marcos Alvarado, senior vice president at Starwood. “The investment represented an excellent risk-adjusted return for our investor partners as we anticipate receiving the majority of our return from current cash flow.”
BLDG Management acquired 1372 Broadway in July 2008 from Wachovia Corp. and SL Green Realty Corp. for $294 million. A year earlier, SL Green had sold an 85 percent interest in the building to Wachovia for approximately $335 million.
— Savannah Duncan