Here’s what tenants are paying at 860 Washington

Major tenants at Meadow Partners and CalPERS’ 120K sf property include Alibaba and Tesla

New York Insights /
Feb.February 02, 2021 07:00 AM
From left: 860 Washington Street, Meadow Partners Managing Partner Jeff Kaplan and Calpers CEO Marcie Frost (Photos via Meadow Partners; Calpers; CNY Group)

From left: 860 Washington Street, Meadow Partners Managing Partner Jeff Kaplan and Calpers CEO Marcie Frost (Photos via Meadow Partners; Calpers; CNY Group)

In one of the few major office acquisitions to close in Manhattan since the start of the pandemic, Meadow Partners and California Public Employees’ Retirement System last month picked up the ground lease at 860 Washington Street in the Meatpacking District for $232 million.

Romanoff Equities and Property Group Partners completed the boutique building in 2016. Shortly before the ground lease sale, Romanoff bought out Property Group in a sale-leaseback deal valuing the land at the $80 million.

Meadow Partners and CalPERS financed their acquisition with a $116 million loan from JPMorgan Chase, which has been included in a CMBS transaction named BMARK 2021-B23. Loan documents provide an inside look at the property’s finances — and a rent roll including prominent tech tenants like Alibaba and Tesla.

As of November, the 117,230-square-foot office building is 97 percent leased to seven tenants, all paying triple-digit rents per square foot.

The largest tenant is Chinese tech giant Alibaba, occupying more than a quarter of the total rentable space — and with the right of first offer for any tenant space that becomes available at the property, according to an S&P Global report. The company and its founder Jack Ma are currently facing pressure from Chinese regulators which led a financial services subsidiary, Ant Group, to cancel its IPO last fall.

The 11,000-square-foot ground-floor retail space is fully occupied by Tesla’s only store in Manhattan, paying nearly $500 per square foot in annual rent — more than a quarter of the property’s total rent bill. Tesla CEO Elon Musk became the world’s richest person last month, as the company’s stock price has more than quintupled over the past year.

Other tenants at the building at are Baker Brothers Investments, an investor in life sciences companies; Delos, a wellness real estate and technology firm; Social Finance, a SoftBank-backed online personal finance company; LG Capital Investors, the family office of Blackstone alum Lawrence Guffey; and San Francisco-based venture capital firm Expa LLC, which executed a new lease at the property during the pandemic.

In a reflection of the financial heft of its tenants, rent collection at 860 Washington has held strong at 100 percent throughout the pandemic.

Meanwhile, physical occupancy at the building was less than 10 percent when S&P analysts visited the property in January. Alibaba is currently considering subleasing its space on the ninth floor, which has not been built out yet, as its employees are all still working remotely.





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