The Real Deal New York

JPMorgan and partners are looking to sell DKNY’s Midtown office

The owners are asking $115M for the 160K sf Garment District building
By Mark Maurer | Twitter_logo_blue copy January 18, 2018 08:30AM

240 West 40th Street, Jonathan Rose and Donna Karan (Credit: Wikimedia Commons)

JPMorgan Chase, Olmstead Properties and Jonathan Rose Companies are looking to sell a Midtown office building almost fully occupied by DKNY, sources told The Real Deal.

The owners of the 12-story, 160,000-square-foot property at 240-248 West 40th Street in Midtown’s Garment District are asking about $115 million, or north of $725 per square foot, sources said.

Donna Karan’s fashion label leases about 143,000 square feet of showrooms and backroom office space at the building, having signed in late 2015 for an expansion and renewal through July 2020. Prior to the renewal, DKNY sought to relocate to a smaller office at RFR Realty’s 285 Madison Avenue, but talks later broke down. DKNY also vacated its office at 550 Seventh Avenue in 2015.

JPMorgan, Olmstead and Jonathan Rose bought the building for $85 million in 2015 from AEW Capital Management and Colliers ABR, which after several mergers is now part of Cushman & Wakefield.

A Colliers International team led by Richard Baxter, Jason Gold, Stephen Shapiro and Ameet Amin is marketing the building, located between Seventh and Eighth avenues, for sale. Olmstead’s Samuel Rosenblatt confirmed the listing, but declined to comment further. JPMorgan, Jonathan Rose and the brokers declined to comment.

As of 2016, JPMorgan’s equity stake in the site was 75 percent, according to bank records. The building’s retail tenants — Boi Noodle House, Dunkin’ Donuts and Guy & Gallard — have leases that expire in 2027 at the latest, sources said.

Elsewhere in the Garment District, New York REIT recently sold two office buildings on West 36th and 38th streets to Brickman and Investcorp for a combined $155 million.