Massey’s Guthrie Garvin, Trump Palace
[Updated: 1:52 p.m., Sept. 28] A retail condominium at Trump Palace on the Upper East Side was sold to shopping mall developer Equity One for $21 million, the company announced today.
The 27,700-square-foot retail condo at the base of 1175 Third Avenue, between 68th and 69th streets, is occupied by a Food Emporium, on a triple net-lease to Great Atlantic & Pacific Tea.
The deal marks North Miami-based Equity One’s first acquisition in Manhattan, and the second acquisition in New York state since the firm acquired Westbury Plaza for $103.7 million in October 2009.
The lease term on the space goes out for another 50 years, according to Massey Knakal Realty Services Chairman Robert Knakal, who led the team that marketed the space for more than four months. The supermarket is not expected to leave any time soon; current rents being paid are only 20 percent of current market rents.
“It will be a long time before an owner will be able to get at the upside potential, but there is a significant amount of upside potential created by the very low rent is being paid,” Knakal said.
A report by Cushman & Wakefield shows the average ground floor asking rent in the Third Avenue submarket, between 58th Street and 79th streets, was $246 per square foot at the end of the second quarter, a $4 a square foot increase from the first quarter.
Equity One, based in North Miami, Fla., either owns or invests in 185 properties around the country, including 171 shopping centers. In April, the firm acquired Copps Hill Plaza in Ridgefield, Conn., for $33.4 million. At the time of the acquisition, the mall was 100 percent leased, led by anchor tenants Stop & Shop and Kohl’s. The Wesbury Plaza mall includes a Walmart and Costco and has an adjacent 22-acre development site.Earlier this month, the firm acquired three shopping centers in Florida for a total of $64.7 million.
Equity One also said it increased its revolving credit line to $400 million from $272 million by exercising its so-called accordion feature. The firm said four new banks joined the existing credit facility with no modification to terms. Several other banks added to their existing credit lines.
“This is another example of our focus on acquiring retail assets with rents that are significantly below market in trade areas with high barriers to entry,” said Jeff Olson, CEO of the firm, in a statement.
Equity One officials were not immediately available for comment.