The deal works out to more than $800 per square foot for the 99-year leasehold on the 11-story, 80,000-square-foot property. Kaufman negotiated the deal with property owner LCT Associates, as TRD originally reported.
“I think both parties have a benefit with this structure,” said Michael Kazmierski, Kaufman’s director of acquisitions, who negotiated the deal along with colleagues Fred Leffel and Grant Greenspan. “Ground leases still represent a great solution for multi-generational owners who have protected a long-term cash-flow stream and also provide a tax-efficient structure.”
Kaufman plans to spend $10 million upgrading the building, including renovating the lobby, upgrading elevators and installing new fiber optic/telecommunications infrastructure. The landlord declined to comment on rents in the building, but did note that the firm will be offering “significant” tenant improvement allowances for new leases.