American Realty Capital’s New York Recovery REIT is in contract to buy the 756,000-square-foot office tower at 1440 Broadway from investment firms Monday Properties and the Rockpoint Group for $528.6 million, an executive with the company told The Real Deal.
Rockpoint owns an 80 percent stake in the 25-story building, which it acquired for $282.4 million in December, while Monday, which manages and leases the site, owns the remaining 20 percent. Monday bought the building in 2007 for $434 million. In December, though, the building was valued at $353 million.
The private, non-traded real estate investment trust, whose parent company, American Realty Capital Properties, is led by CEO Nicholas Schorsch, has acquired a total of $2.1 billion in properties to date. This Times Square building, located between 40th and 41st Street, is one of several Midtown properties the REIT has scooped up since forming in 2009.
The deal for the building occurred swiftly over 10 days, according to Michael Happel, chief investment officer for New York Recovery REIT.
“We have a good relationship with the sellers, so we were able to execute it quickly,” Happel told The Real Deal. “It’s certainly an advantage in the New York market to have capital and move fast.”
Adam Spies and Doug Harmon of Eastdil Secured represented the sellers in the deal, while American Realty was represented in-house. Monday could not be immediately reached for comment. Rockpoint declined to comment.
The building’s flagship tenant, mega-retailer Macy’s, renewed its 11-year lease at the building last December. It had signed on for an additional 31,700 square feet, bringing its total occupied space up to 197,000 square feet.
Although the building is currently 95 percent leased, Happel said the REIT plans to redevelop the retail space at the base of the building in about two years as several leases expire.
“This purchase is part of our focus on income-producing properties,” a spokesperson for American Realty said.