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Kaufman Investments, Beacon Capital make $92.5M Chelsea buy
Amid a frozen market for office sales, 875 Sixth Avenue sells with 35% of building empty
A photo illustration of Kaufman Organization’s Michael Kazmierski and 875 Avenue of the Americas (Getty, Kaufman Organization, LoopNet)
Even in a frigid market for Manhattan office sales, there are still some deals being made.
Kaufman Investments in partnership with Beacon Capital Partners bought 875 Sixth Avenue in Midtown South for $92.5 million, a spokesperson for Kaufman confirmed.
Kaufman and Beacon acquired the one-third-empty building, which they plan to renovate but keep as office, from 875 Old LLC and New 875 LLC, which are affiliated with Peter Braus and James Wacht of Lee & Associates NYC. The deal closed June 30, but did not hit property records last week.
The acquisition was led by Michael Kazmierski and Lorenzo Bakewell-Stone of Kaufman Investments. Chris Varjan and his team at Lee & Associates NYC represented the seller.
The 265,000-square-foot building, at the northwest corner of West 31 Street, is only 65 percent occupied. Tenants include Zero Point Zero Productions and Ken Burns Media. But the buyers see potential.
In a statement, Kazmierski, president and principal of Kaufman, said the building “serves as the nexus between the emergence of Penn Station and the ever-evolving NoMad neighborhood.”
The buyers were motivated in party by the promised renovation of Penn Station, which is expected to create additional demand at the north end of NoMad. Kaufman assumed debt from the existing lender at the property, Genworth Life & Annuity Insurance Company, and intends to renovate the building, though specific plans have not been finalized.
Braus, co-managing member of Lee & Associates, said in a statement it was time for new ownership “that could bring [the] building up to a modern standard and enable it to successfully compete with other Midtown South properties.”
The outlook for Manhattan office assets is anything but certain. Even top-tier office landlords have given rent concessions of up to 24 percent; in May, Manhattan office buildings hit a record 94 million square feet of vacancy. But higher-end properties seem to be outperforming their Class B and C counterparts.
The 25-story building on Sixth Avenue was completed in 1927 and features a series of setbacks, beginning on the 16th floor, that are more reminiscent of residential structures.
“875 Avenue of the Americas has always been an incredible asset,” Braus said.