New boutique office building headed for East Village’s St. Mark’s

Developers aiming for $150 psf rents in hot Midtown South market

Nov.November 14, 2019 02:15 PM
A rendering of 1 St. Marks Place

A rendering of 1 St. Marks Place

Another high-priced, boutique office building is moving forward in Midtown South.

Real Estate Equities Corp.’s development at 1 St. Mark’s Place in the East Village landed a nearly $80 million construction loan, according to property records filed with the city Wednesday.

South Korean financial services firm Hana Financial Group provided the $79.1 million loan, then sold the $48 million first mortgage to Madison Realty Capital  and held onto a $31.1 million mezzanine loan. VI Development Group arranged the debt.

A representative for REEC — headed by Brandon Miller and Mark Siegel — declined to comment.

REEC is planning to develop a 10-story, 65,000-square-foot office building on the site at the corner of St. Mark’s Place and Third Avenue.

The developers will be eyeing rents in the area of $150 per square foot. Such figures were once only seen in the most expensive locations in Midtown but now are commonplace for newly constructed office buildings in areas like the Meatpacking District, Soho and Greenwich Village.

The site at 1 St. Mark’s sits across the street from Minskoff Equities’ 51 Astor Place, the glass and steel building that arguably set the standard for new office construction when it opened in 2013. At the time, it was derided by locals as being out of character with the East Village’s complexion.

(That property was also financed by a South Korean investor, the Korean Teachers’ Credit Union, which in 2015 bought a 49-percent stake in the property valuing it at $600 million.)

Elsewhere in the area, Normandy Real Estate Partners and Columbia Property Trust are developing a 180,000-square-foot office building a few blocks north at 799 Broadway.

REEC controls the St. Mark’s property through a 99-year lease it signed in 2017 for north of $150 million.

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