Two Sigma, Kaufman Investments Pay $52M for Flatiron Office

The Kaufman Organization didn’t need to look far to find a buyer for its boutique office building in the Flatiron District.

The Kaufman Organization and AXA Financial sold the 137,000-square-foot property at 40 West 25th Street to Kaufman Investments — an affiliate of the parent company — and Two Sigma Real Estate for $52 million, the Commercial Observer reported. The deal, which came as the result of a lender-directed sale, works out to $380 per square foot.

A joint venture of the Kaufman Organization and the French insurance firm bought the property from Japanese investment firm Unizo Holdings in 2019 for approximately $120 million, representing one of Unizo’s final exits from New York City real estate. They pulled a $76 million acquisition loan from MetLife for the deal.

The drop in value — by more than half in seven years — exemplifies the difficulties experienced by the Manhattan office market since the pandemic, outside of the top trophy properties.

Kaufman Investments president Michael Kazmierski did not immediately respond to a request for comment from The Real Deal.

A Newmark team including Adam Spies, Avery Silverstein and Brett Siegel negotiated the deal.

The property is 80 percent leased; the top two tenants, Wasserman Media Group and Hello Fresh, each occupy 22,000 square feet. Other tenants include GoodRx Holdings, Cosette Fifth Avenue and Chico’s Retail Services. There’s also 15,000 square feet of retail space.

In July 2023, Kaufman Investments partnered with Beacon Capital Partners to buy 875 Sixth Avenue in Midtown South for $92.5 million. The 265,000-square-foot building, at the northwest corner of West 31 Street, was only 65 percent occupied at the time.

Two years ago, meanwhile, Two Sigma bought a 269,000-square-foot industrial campus outside Phoenix for $51.6 million. The seller was Germann Road Land Development, an affiliate of American National Insurance.

— Holden Walter-Warner