Josh Rahmani and Ebi Khalil have flipped their Park Avenue South deal to Olmstead Properties.
The Empire Capital co-founders went into contract earlier this year to buy 381 and 373 Park Avenue South from the Hemmerdinger family’s ATCO Properties, as The Real Deal previously reported.
Now, Olmstead has bought the office buildings from ATCO for $104 million, with Empire retaining a small piece of the deal.
“373 and 381 Park are quintessential Olmstead buildings — classic architecture, prime location and untapped potential,” Olmstead managing director Steve Marvin said in a statement. “Our broader portfolio is 95 percent leased because tenants value how we operate and manage our buildings. That strong demand positions us well to bring new energy and new tenants to these two properties.”
Bank of New York Mellon is financing the deal at 60 percent loan-to-valuation at $140 million, which is the all-in cost for purchasing and upgrading the buildings, according to a source.
Commercial Observer first reported the purchase.
A Newmark team led by Adam Spies and Adam Doneger negotiated the sale.
“We were able to successfully bring Olmstead into Empire’s purchase of the Park Avenue South Collection as part of our sales process,” Spies said.
Newmark’s Jordan Roeschlaub and Daniel Fromm arranged the financing.
Rahmani and Khalil put the deal under contract in May, and it was well known through the industry that over the following months they were looking to flip the contract. The final deal essentially works as a flip, with Empire staying in with a small equity piece.
It’s a deal model that other investors (the most famous being David Werner) use to make quick profits.
Olmstead said it plans to modernize the properties, including updated amenities and prebuilt suites.
381 Park Avenue South is 17 stories and 244,000 square feet; 373 Park Avenue South is 12 stories and 112,000 square feet.
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