The Real Deal New York

Goldman joins Kaufman on latest Ring portfolio ground lease

Firm brings on investment bank in $45M deal for 155 West 23rd Street

September 23, 2015 02:45PM

155 West 23rd Street in Chelsea and Fredric Leffel

155 West 23rd Street in Chelsea and Fredric Leffel

The Kaufman Organization is partnering with investment giant Goldman Sachs on its long-term ground lease at 155 West 23rd Street in Chelsea, the latest of Extell Development’s Ring portfolio buildings now controlled by Kaufman.

The partnership paid about $45 million for a 99-year ground lease of the 12-story, 82,000-square-foot office building. Kaufman plans to spend $10 million refurbishing 155 West 23rd Street, according to the firm’s president Fredric Leffel, with the work expected to be complete by the end of next year.

The transaction, first reported by The Real Deal in June, is the fifth ground-lease on a Ring portfolio building that Kaufman secured from Gary Barnett’s Extell. The company also purchased 99-year leases on four nearby office buildings, all formerly owned by brothers Frank and Michael Ring, for around $150 million last year.

Extell acquired the 14-building portfolio in 2013 from the brothers, who inherited the properties from their father and left them to deteriorate. As a result, the buildings remained nearly vacant even as the Midtown South office market became one of the most desirable in the city, according to Crain’s.

Once Kaufman completes its refurbishing of 155 West 23rd Street, asking rents for office space will range from the high-$60s to $70s per square foot. Kaufman also hopes to fill the building’s ground-floor retail space. [Crain’s]Rey Mashayekhi