Jamestown eyes $100M for South Bronx office property
Price expectation is a slight discount to 2017 purchase price of $115M
Jamestown is looking to sell a South Bronx office building for about $100 million — a discount of nearly 10 percent to the price it paid five years ago.
The Atlanta-based investor put the 10-story building at 260 East 161st Street, across from the Bronx county courthouse, up for sale, The Real Deal has learned.
The office and retail portions of the roughly 266,000-square-foot building are fully leased, primarily to tenants like the Bronx District Attorney’s Office and the city’s law department, as well as retailers like Starbucks, Walgreens and Chipotle.
Because of the proximity to the court complex, the building has been an example of “unflappable resilience within the outer borough office market,” according to marketing materials from Newmark, where a team led by Adam Spies and Adam Doneger is marketing the property.
Despite that resilience, Jamestown’s mid-point pricing expectation of about $106 million is still a discount to the $115 million the company paid when it bought the property in December 2017. Rising interest rates have made acquisition costs shoot up, putting downward pressure on property prices.
Office properties have struggled in particular to hold up their valuations as the move to hybrid work has depressed values for all but the most high-end buildings.
A representative for Jamestown did not immediately respond to a request for comment.
The property has a $64 million mortgage with PNC Bank that can be assumed by a new buyer. That should alleviate some of the pressure from higher interest rates, at least until the loan expires at the end of 2024. The loan is swapped to a fixed rate of 4.31 percent, according to the property’s offering memo, which is significantly below market rates.
Properties with low-cost mortgages that a seller can pass onto a buyer have become one of the few ways to break through the log jam that rising interest rates have created in the investment sales market.
Jamestown, which owns office buildings like the 15-story 63 Madison Avenue and the 26-story 200 Madison Avenue in Midtown, sold a 50 percent stake in the company to the mall giant Simon Property Group late last year.
Former low-income South Beach apartments hit market as possible hotel conversion
COMPANIES AND PEOPLE