Columbia Property unloads Chelsea office for $170M

Deal comes as REIT finalizes $4B sale to PIMCO

New York /
Dec.December 07, 2021 04:00 PM
218 West 18th Street and Columbia Property Trust’s Nelson Mills (Google Maps, Columbia Property)

218 West 18th Street and Columbia Property Trust’s Nelson Mills (Google Maps, Columbia Property)

PIMCO is trimming Columbia Property Trust’s portfolio as it prepares to close its $4 billion purchase of the Manhattan landlord.

Columbia sold the Chelsea office building that serves as headquarters to Red Bull at 218 West 18th Street to Meadow Partners for about $170 million, sources familiar with the sale told The Real Deal.

Meadow Partners is buying the property through a fund it operates with the California Public Employees Retirement System.

The fund is set up to buy stabilized, long-term properties that aren’t as immediately impacted by current uncertainty over the city’s office market, said Meadow Partners’ Tim Yantz.

“It’s almost fully leased and can get you through the next cycle,” he said.

The deal closed on Friday as PIMCO is set to finalize its takeover this week of Columbia and its 6 million-square-foot portfolio of office buildings.

Representatives for PIMCO and Columbia could not be immediately reached for comment.

The 12-story building at 218 West 18th Street covers some 166,000 square feet and is leased with the average term stretching into the next five years. In addition to Red Bull, the building’s tenants include the SAE Institute of Technology and film production company Deluxe Creative Services.

Columbia bought the building in 2017 for $155 million at the same time it acquired a nearby building at 249 West 17th Street, where Twitter in 2018 renewed its lease to remain until 2030.

A Cushman & Wakefield team of Adam Spies, Adam Doneger and Rachel Humphrey, which advised PIMCO on its merger with Columbia, brokered the sale to Meadow Partners. The brokers declined to comment.

In a transaction announced Monday, Meadow agreed to pay $117 million to buy the 18-story office building at 110 East 42nd Street across the street from Grand Central Terminal from SL Green Realty.

PIMCO’s purchase of Columbia Property is one of the largest merger-and-acquisition deals for a Manhattan office REIT in recent memory. The California-based investment manager announced in September it had reached a deal to buy Columbia for $2.2 billion, which values the company at $3.9 billion with debt.

In addition to its portfolio of office buildings, Columbia also has a pipeline of development projects that includes the Terminal Warehouse in West Chelsea. Columbia and its partner on the project, L&L Holding Company, landed a $1.3 billion loan in July to redevelop the 1.3 million-square-foot property.





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