Thanks in part to an unusual piece of seller-financing, Jamestown Properties has closed on its $295 million purchase of the Milk Studios building from Stellar Management, city records show. Records filed with the city Friday show a transfer price of $284.4 million, but The Real Deal has learned that the sale price actually ticks in at $295 million. The New York Post reported in early December that the 281,361-square-foot property, located at 450 West 15th Street in the Meatpacking District, was approaching a sale for $300 million.
As The Real Deal previously reported, Stellar chief Laurence Gluck announced in early November that he was preparing to sell the building, best known for being home to the famed Milk Studios photography studio.
The deal involved a piece of seller-financing, with Stellar providing a $150 million short-term loan to Jamestown, which appears in public records. The move was intended to help the deal close quickly, while giving Jamestown more time to iron out long-term financing, The Real Deal has learned.
Seller financing in large commercial sales is uncommon but not unheard of, said Singer & Bassuk Organization Principal Scott Singer, who has represented major city real estate families in their dealings with lenders.
“It’s a vehicle that can be used for … sophisticated parties to achieve a goal,” Singer said.
Douglas Harmon and Adam Spies of Eastdil Secured marketed the building. Harmon declined to comment on the deal, but according to the Post, this is the third time that the duo marketed the building. Property records show that Gluck bought the eight-story building in 2008 for $161 million.
In addition to the $284 million transfer, city records also show the termination of a loading dock lease between Stellar and Mulnick Realty, LLC, an entity of Milk Studios owner Erez Shernlicht, which added $11.2 million to the purchase price. The transfer of additional funds stems from a Nov. 28 agreement between Gluck and Shternlicht stipulating that Gluck must pay a “certain amount” once “certain events” happen.
Reached by phone, Shternlicht said he received this amount for working with Gluck to replace a loading dock with a prime retail storefront.
“They’re going to be an amazing landlord,” Shternlicht said of Jamestown, adding that they can sell the property for even more money down the line, if they choose.
Jamestown also owns Chelsea Market, which is across the street. The City Council voted unanimously in November to approve a rezoning allowing the developer to construct a nine-story office property atop the existing structure.
Stellar declined to comment; Jamestown did not respond to messages seeking comment.
Additional reporting by Adam Pincus