Greg Kraut’s KPG Funds has unloaded one of its pre-pandemic Soho office developments for not much more than what it paid. And that doesn’t include what it shelled out for renovations.
KPG sold 30-32 Howard Street to San Francisco-based Spear Street Capital for $48.1 million. The deal comes five years after KPG paid $46 million for two buildings and spent additional money to combine 30 and 32 Howard Street into a single boutique office building.
Dubbed Howard x Crosby, the building is at the corner of Howard and Crosby, with an alternative address of 2 Crosby Street. It was built in 1868 and renovated by KPG in 2019. It contains 30,000 square feet over six stories, five office units and a retail unit. European designer apparel company Rick Owens is the retail tenant.
The purchase adds to Spear Street’s office portfolio, which spans the United States, Canada, Europe and the United Kingdom. The company, which boasts on its website of a track record on “complicated office assets,” picked up Midtown office property 641 Sixth Avenue from SL Green in 2021 for $325 million.
KPG is trying to make a name for itself as a boutique office developer, primarily in Soho. The neighborhood’s lush architecture and high foot traffic provides a backdrop for the company’s flix-and-flip strategy that intends to turn outdated offices into Class A assets.
Many of KPG purchases came after the pandemic, when prices fell. This could bode well for the sale of those assets, but the company also borrows from alternative lenders that tend to be more aggressive.
KPG declined to comment on the deal. Spear Street could not immediately be reached for comment.
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