The Real Deal New York

Philips sells 40 Rector office condo for $18 million

Non-profit China Institute said to plan art gallery for Financial District storefront

May 23, 2012 06:00PM
By Leigh Kamping-Carder

From left: Sara Judge McCalpin, president of China Institute in America, and 40 Rector St.

The China Institute in America paid $18.3 million for a two-level space at 40 Rector Street, according to property records filed with the city Monday, making the non-profit organization the fourth purchaser at Philips International’s commercial condominium. The purchase covers a 13,000-square-foot portion of the ground floor, plus the entire 35,000-square-foot second floor, Michael Pilevsky, co-president of Philips, told The Real Deal.

The organization, founded in 1926 to promote Chinese culture in the U.S., intends to convert the street level space into a high-end gallery, designed by the architectural firm Gensler, Pilevsky said.

The China Institute operates a gallery out of its current Lenox Hill location at 125 East 65th Street, where it showcases Chinese art and artifacts from the past 5,000 years. A representative for the organization did not return a call seeking comment.

“What was appealing to them was really the renaissance of the whole area with Conde Nast coming downtown,” Pilevsky said, referring to the magazine publisher’s lease at 1 World Trade Center. “They wanted to be one of the earliest cultural institutions to make the move at this point, as the market’s been heating up.”

The deal, which closed May 1, leaves 15 floors vacant in the 19-story, 600,000-square-foot building on the corner of West Street.

The first organization to purchase at 40 Rector was the Council of School Supervisors and Administrators union, which paid $8 million for 32,019 square feet of space in April, as previously reported.

Since then, RVM, a litigation support company, and Urban Justice Center, a legal non-profit, have followed.

As far as future sales, Philips is looking for buyers willing to purchase full floors, Pilevsky said.

The company has received about three offers from non-profits interested in a “building within a building” space that covers the remainder of the ground floor, plus several additional floors, a private entrance and a private lobby, he said.

Sales of commercial condos in Manhattan have reportedly bounced back since taking a dive during the recession, with properties like Philips’ Bar Building at 36th West 44th Street and Extell Development Company’s International Gem Tower at 54 West 47th Street finding favor with foreign buyers.

Scott Klau, an executive vice president at Newmark Grubb Knight Frank, which is marketing 40 Rector, declined to comment. A representative for Gensler did not immediately return a request for comment.

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