The Real Deal New York

Knotel inks lease for largest location in Soho to date

Flexible-office startup takes close to 50K sf at 530-536 B’way
By Rich Bockmann | July 24, 2018 03:00PM

530-536 Broadway and Amol Sarva (Credit: Thor Equities)

Knotel sealed a deal for its largest location in Soho to date.

The flexible-office company led by co-founder Amol Sarva signed a lease to take 49,000 square feet at 530-536 Broadway, sources told The Real Deal.

The location marks the fast-growing company’s seventh outpost in the neighborhood, where earlier this year it signed a lease just a few steps away at 584 Broadway.

The 530-536 Broadway space had an asking rent around $75 per square foot, and Knotel’s term runs for 10 years, according to a source familiar with the deal.

Jeff Sutton’s Wharton Properties and Joe Sitt’s Thor Equities own the three interconnected buildings at the corner of Prince Street, which span 194,500 square feet combined.

Robert and Aziz of Sitt Ventures

A spokesperson for Knotel confirmed the deal. Sitt Ventures’ Robert Chattah and Aziz Kabbaj of Sitt Ventures and Sherlock represented Knotel in the lease, and Thor negotiated the deal on behalf of the ownership.

Knotel has been voraciously snapping up office space lately as it ramps up to compete with its main rival, WeWork.

Earlier this year, the company closed a $70 million Series B funding round in April led by Newmark Knight Frank and the Sapir Organization that valued the company at $500 million.

And last week the company agreed to buy the office listing site 42Floors in a move toward building a blockchain-based listing platform.

In March, Sutton had disclosed in filings on the Tel Aviv Stock Exchange that he was buying SL Green Realty’s $100 million investment in 530-536 Broadway, which the two had purchased in 2014 for $340 million.

The filings put a value of $480 million on the 11-story buildings, where retail tenants are AT&T, Club Monaco and Skechers. Office tenants include the advertising firm Anomaly Partners, which just expanded its 85,000-square-foot lease to 2024.

As of May, Wharton and Thor were looking for up to $300 million in new debt to refinancing the building, Commercial Mortgage Alert reported. Morgan Stanley had provided $200 million in debt when Wharton recapitalized the building in 2014.