The Real Deal New York

JMC lands $51M to buy NY REIT’s Lenox Hill office building

Square Mile provides acquisition loan
By Kathryn Brenzel | March 01, 2018 11:50AM

306 East 61st Street, Matt Cassin and Craig Solomon

JMC Holdings scored $51 million to buy New York REIT’s office property in Lenox Hill, known as the Interior Design Building.

Square Mile Capital Management provided the financing for the deal, the firm announced on Thursday. JMC paid $47 million for 306 East 61st Street, one of the real estate investment trust’s last remaining properties. As part of the deal, JMC paid off a $19 million mortgage — meaning that New York REIT received net proceeds of $26.5 million for the property, the REIT announced last week.

Representatives for JMC didn’t immediately return a call seeking comment.

The loan will cover the cost of acquiring the property, as well as capital improvements and associated leasing costs, Square Mile said in a statement. JMC plans to reposition the property as a “high-end boutique building,” according to Square Mile. Cushman & Wakefield’s Gideon Gil brokered the financing.

New York REIT announced in December 2016 that it would begin liquidating its assets. The company sold its first office property, 50 Varick Street, in August for $135 million. Other deals have included a pair of office properties in Midtown South, which sold to Columbia Property Trust for $515 million; two buildings in the Garment District to Brickman and Investcorp for $155 million; and a West 34th Street office building to Brookfield Property Partners for $255 million.

During the years leading up to the REIT’s liquidation, the company was plagued by shareholder disputes, lackluster returns and a scandal involving the company’s former affiliate, American Realty Capital Partners.