Empire State Realty Trust is ready to trade a pair of Westchester County office buildings for about 15 percent more than what it paid for them nine years ago.
The REIT is in contract to unload office properties at 10 Bank Street in White Plains and 500 Mamaroneck Avenue in Harrison for $95 million, according to an SEC filing. The deals are expected to close in the first quarter of next year. The buyers were not disclosed.
ESRT disclosed the agreement in its third-quarter earnings report last week, saying it plans to put the $95 million towards 1031 transactions as part of the firm’s capital allocation plan.
With $1.2 billion in liquidity, the firm has focused on capital allocation as it faces no floating rate exposure and its $2.3 billion of debt not maturing until late 2024. ESRT also has a stock buyback program that has purchased $275 million in common stock since the initiative began in 2020.
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The REIT paid around $81.1 million for the office buildings in 2013, according to local property records. The 12-story, 235,000-square-foot property at 10 Bank Street includes tenants like Liberty Mutual, Colonial Life and Broadridge Securities. Universal Remote Control, JDS Therapeutics and Mariner Investment Group are among the notable tenants at the five-floor, 287,000-square-foot building at 500 Mamaroneck Avenue.
Over the past year, ESRT has diversified its portfolio and ventured into the multifamily market as a hedge against an office market downturn. The firm acquired a 625-unit portfolio of Manhattan apartment buildings at 56110th Avenue and 345 East 94th Street last year for $307 million.
CEO Tony Malkin has described the firm as “omnivorous opportunivores” when assessing potential acquisitions, but said ESRT has no immediate plans to acquire more offices.
“Office will be interesting to us when it reaches a point of attraction,” Malkin said during the REIT’s third quarter earnings call. “We haven’t seen anything to date that reaches that point.”