Dalan Management recapitalized a pair of Midtown South office buildings in a deal that values the properties at more than $54 million.
Boston-based Marcus Partners paid $54.5 million to buy the adjacent 11-story buildings at 10-12 East 33rd Street from Dalan Management, a spokesperson for the buyer told The Real Deal.
Following the sale, Dalan retains a minority stake in the buildings with an undisclosed equity investment in the joint venture with Marcus Partners.
Marcus Partners principal David Fiore, head of the company’s New York region, said the properties “offer a stable, diversified tenancy” with room to “create further value over the next few years.”
Dalan, headed by the father-and-son team of Andrew and Danny Wrublin, bought the buildings, which span a combined 70,000 square feet, for $36 million in early 2015, with most of the rents in the $20s and low $30s per square foot.
The company invested a bout $5 million in upgrading the properties and boosted rents into the $50s per square foot. Dalan put the property on the market two years ago in the summer of 2016 with an asking price of $60 million, but never made a deal.
Danny Wrublin said the deal with Marcus Partners allows the company to “recycle capital into a new investment while also maintaining an ownership stake” in the assets.
The new JV plans to invest more capital into upgrading the buildings’ facades, elevators and lobbies.
M&T Bank refinanced the property with an undisclosed amount of debt arranged by a JLL team of Max Herzog, Marko Kazanjian and Matt Fagella.
JLL’s Mo Beler, Glenn Tolchin, Anthony Ledesma, Matthew Spiegel and Yoav Oelsner arranged the sale and joint venture on behalf of Dalan Management.
Beler said the properties allow investors to provide upgrades to meet a growing market demand.
Dalan, meanwhile, teamed up with Elion Partners in June to buy the 80,000-square-foot apartment building at 2568 Broadway on the Upper West Side for $66 million.