CBRE sells off 49 percent stake in 1540 Bway

By David Jones | November 09, 2010 01:00PM

Edge Fund Advisors and HSBC Alternative Investments said they acquired a 49 percent stake in the Bertelsmann Building at 1540 Broadway from CB Richard Ellis Investors in a deal valued at $254 million or $575 per square foot.

CBRE, based in Los Angeles, acquired the office condominium portion of the property in March 2009 from Deutsche Bank for $355 million. That lender had acquired the distressed property from developer Harry Macklowe.

CB Richard Ellis will provide brokerage and leasing services for the building, which used to house Virgin Megastore.

“As a trophy office building and the centerpiece of Times Square, this latest acquisition fits our strategy of investing in high-quality, stable office buildings in prime locations with credit-worthy tenants,” said Christopher Allen, chief executive of HSBC Private Bank’s alternative investment division.

CBRE said it has leased an additional 95,000 square feet at the 907,000-square-foot property, raising the occupancy rate of the building to more than 85 percent from 78 percent in March 2009.

In May 2010, Adobe, the maker of desktop publishing software, signed a deal to move its New York headquarters to the building. The firm took a 27,000-square-foot lease, to move from its former headquarters at 8 West 40th Street. Asking rents were $57 a square foot, according to a report in the New York Observer.

The building represents the third major purchase in recent months by Edge Fund, a Manhattan-based fund and HSBC Alternative, a division of HSBC Bank that caters to wealthy individual investors.

“Edge has been running around Washington D.C. and New York looking at high-value [properties] on behalf of these investors,” said Dan Fasulo, managing director, research at Real Capital Analytics.

In May, Edge and HSBC acquired a 381,000-square-foot office building in Washington D.C. for $209 million. In December 2009, the firms acquired a 90 percent stake in a 385,000-square-foot property from Brookfield Properties for $203.4 million.

CBRE officials were not immediately available for comment. The terms of the deal were not disclosed