Lloyd Goldman’s BLDG Management picked up an East Harlem office building at 145 East 125th Street in a $27 million all-cash deal, sources told The Real Deal.
The six-story, 36,000-square-foot building’s entire office component is leased to the Salvation Army, which moved in earlier this year. There is also a ground-floor retail space that houses McDonald’s, Dunkin’ Donuts and Franklin Check Cashing. The Salvation Army is occupying the space until 2018, when it will relocate to the new 11-story building it is developing on Third Avenue in the neighborhood.
The Salvation Army’s rent is $29 per square foot, while the ground-floor retail tenants pay between $115 and $140 per square foot, according to an offering memorandum.
The deal closed on Oct. 6 for about $750 per square foot.
The original assembler of the large multifamily package later known as the “Dawnay Day portfolio,” Steven Kessner and his son Michael Kessner, have owned 145 East 125th Street since 2001, records show. And for more than two years, they have been trying to sell it – first with Eastern Consolidated in 2014 for $29 million and then with Cushman last year for $32 million.
A Cushman & Wakefield team led by Robert Shapiro, Bob Knakal and Jonathan Hageman represented the seller. The brokers confirmed the deal, but declined to comment on the buyer.
The building, located at the corner of Lexington Avenue, is fully occupied and has no additional buildable square footage. BLDG will likely treat the purchase as an investment and possibly reposition it down the road, sources said.
Ironically, the property sits in the heart of an East Harlem development blitz. In the immediate vicinity, there is Extell’s as-yet-undeveloped Pathmark site at 160 East 125th Street; Blumenfeld Development Group’s 11-story, Bjarke Ingels-designed project at 146 East 125th Street; and the Durst Organization’s distressed site at 1800 Park Avenue.
“There is approximately 3.5 million square feet of new development within a 2-block radius of the property, which also added to the overall appeal,” Shapiro said, citing Cushman data.
In March, Goldman scooped up a portfolio of rental walk-ups in Murray Hill for $37 million.