New York REIT kicks off “non-core” sell-off with $38M deal

NYC-focused trust says goodbye to Clinton Hill rental building

New York /
Sep.September 10, 2015 09:37 AM

New York REIT’s promised strategy to sell off “non-core assets” appears to be picking up steam after the New York City-focused real estate investment trust announced it agreed to sell a Brooklyn rental building, at 163 Washington Avenue in Clinton Hill, for $38 million.

The 16-story building, built in 2009, features 49 rental units across more than 40,000 square feet of residential space, as well as one commercial unit and 38 parking spaces. New York REIT valued the deal at approximately $914 per square foot and at a capitalization rate of 4.7 percent, the company said Thursday. The buyer was not disclosed.

The deal, expected to close in the fourth quarter, is part of the REIT’s “strategic initiative” to market and divest several non-core assets in Brooklyn and Queens to focus “high quality” properties in its core portfolio. New York REIT CEO Michael Happel announced such plans, as well as the company’s intention to repurchase up to $150 million of its common stock, earlier this year after facing shareholder criticism regarding the REIT’s direction.

New York REIT has also received “substantial interest in the four other assets we have for sale outside Manhattan” as part of its planned non-core asset dispositions, Happel said in a statement. The REIT has retained commercial brokerages HFF and Cushman & Wakefield to market the properties, with HFF brokering the 163 Washington Avenue deal.

The company expects to generate between $120 million and $130 million through the sale of the five non-core assets in Brooklyn and Queens, Happel said in New York REIT’s second quarter earnings call last month. It paid $102 million to acquire the assets it is now looking to divest.


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