Eretz Group sells Midtown office building for $30M

Buyer owns site of strip club Rick’s Cabaret
By Mark Maurer | February 28, 2014 04:40PM

The ELO Organization, a developer that owns the site of gentlemen’s club Rick’s Cabaret, has acquired a 12-story Garment District office building for $29.6 million from the Eretz Group, according to property records filed with the city today.

The 44,300-square-foot property at 39-41 West 38th Street between Fifth and Sixth avenues, was sold to Eretz by the Lee Ann Steinberg Charitable Trust in 2007 for $14.9 million, property records show. Hair salons Lasio Studios and Onyx & Jade Salon occupy a combined 4,000 square feet on the ground floor. Travel tech firm Plusgrade signed a third-floor lease there in 2012. Asking rents were an average $38 per square foot at the property, which is currently fully leased.

No brokers were involved in the deal. Stephanie Moore, a broker at Tarter Stats O’Toole, handled leasing on behalf of Eretz when Eretz owned the property.

Jack Elo, manager of ELO, plans to renovate the lobby and upgrade the heating system.

“We’re doing work on it to make it more presentable,” Elo told The Real Deal. “But we see this as a long-term asset.”

Rick’s Cabaret secured an option in October to buy both the building and land at 50 West 33rd Street from ELO for $10 million sometime in the next five years, as previously reported. The club paid $13 million for 39,000 square feet of air rights above the building.