Two of the money-losing retail properties Vornado Realty Trust just sold are destined to become offices.
The buildings at 155 Spring Street and 478-482 Broadway have been scooped up by office developer KPG Funds, The Real Deal has learned.
Earlier this week, Vornado announced it was selling the properties along with three other Madison Avenue buildings at a $7 million loss. The buyer of the Madison Avenue properties was revealed by Commercial Observer to be Reuben Brothers, the fim led by two British billionaire siblings.
In a release, Vornado disclosed the total sales price for all five buildings as $184.5 million. An inside source told TRD that KPG paid approximately $85 million for the two Soho properties, which would mean Reuben Brothers’ purchase of the three Madison Avenue buildings came to just under $100 million.
The sale of the Soho buildings is expected to close in the first quarter of 2022. It could not immediately be determined if the ground-floor space would remain retail under the new ownership.
KPG Funds, formerly known as K Property Group, is led by Gregory Kraut and Rod Kritsberg. The company began raising a $200 million fund to buy small Class B and C office properties and redevelop them into Class A offices. It’s unclear whether the Soho purchases were financed through that fund; its most recent filing with the U.S. Securities and Exchange Commission shows no securities have been sold.
In July, KPG signed a 99-year, $30 million ground lease at 132 West 14th Street with the Salvation Army.
KPG declined to comment. Vornado could not be immediately reached for comment.