Caspi Development and RWN Real Estate Partners bought an office building at 135 Bowery on the Lower East Side for $16.2 million, doubling down on a campaign to turn the formerly run-down street into a tech-office destination.
Westchester-based Caspi already owns a nearby property at 161 Bowery, which it bought last year for $12.75 million, renovated and leased out to tech companies including messaging company Kik Interactive. Josh Caspi, the firm’s principal, said strong demand for office space there spurred his decision to buy another building.
Through RWN, private equity billionaire and Apollo Global Management co-founder Marc Rowan now has a stake in the Bowery’s office market. The company, headed by Ari Shalam, was set up to invest Rowan’s private wealth.
The property at 135 Bowery was once the site of a wood-framed gambling den dating to 1817, until First American International Bank demolished it in 2011 and later built an eight-story, 24,000-square-foot office building.
Caspi and RWN are betting they can get higher rents by turning the floors into vintage-looking office lofts and connecting them to high-speed internet, following the playbook from 161 Bowery. Caspi said he is adding wooden beams treated to look old.
Cushman & Wakefield’s Darragh Clarke and Mei Ling Wong brokered the deal. M&T bank provided acquisition financing. NGKF’s David Falk and Daniel Levine will handle office leasing.
The formerly run-down Bowery recently saw an influx of luxury condos, swanky bars and art galleries. Now Caspi and RWN are hoping it can also become a tech office district, attracting tenants priced out of Midtown South.
Amid a boom in venture funding, several Manhattan landlords are marketing their buildings specifically to tech companies and startups. Critics worry this creates risks if funding dries up and startups fold en-masse, while others counter that the current tech boom is on firmer footing than the dot-com bubble of 2000.
RWN has spent heavily on New York real estate over the past years, typically by partnering with local development firms. For example, in February the firm teamed up with Dalan Management to buy a ground lease on a Midtown rental building for $47 million, and in 2013 paid $72 million for a Kips Bay portfolio in partnership with Silverstone Property Group.