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GlobeSt.com | New York REIT Completes Sale of Manhattan Retail Portfolio

04.23.18

By Betsy Kim

NEW YORK CITY—New York REIT has completed the dispositions of its Manhattan retail assets with the $31.5 million sale of four Bleecker Street properties to Toronto-based Brookfield Property Partners, and a family office acquiring 416 Washington St. for $11.2 million. Both transactions closed on April 19.

With the recently sold properties, 350 Bleecker St. is on the corner of W. 10th Street. It includes 4,400 square feet for retail, and an 8,220 square-foot parking garage. Fashion retailer Sarah Pacini currently leases space in the building.

367-369 Bleecker St. is a 4,726-square-foot retail condominium at the corner of Charles Street. The luxury clothing company Burberry had signed a 10-year lease for this space in 2010 but has closed its store at this location.

382-384 Bleecker St. is a 2,905-square-foot, multi-tenanted retail condominium on the corner of Perry Street. Michael Kors, Havaianas and APC have leases in the building. But the Michael Kors store has closed.

387 Bleecker St., a 480 square-foot retail condominium, having an additional 312 square feet of basement storage, is currently vacant. It is at the ground floor of a luxury residential duplex.

“Bleecker Street has had for a very long time tremendous foot traffic and lots of tourist attractions. Brookfield approached us. They will be using this as an incubator for many retail companies that might be looking for other locations,” Jeff Fishman, RKF vice chairman, who led the team in the New York REIT Manhattan retail portfolio sales, tells GlobeSt.com.

“There will be action. There will be people on the streets. There will be stores open. I think it will be a shot in the arm for Bleecker Street. An institutional owner like Brookfield will be able to merchandise the street appropriately,” says Fishman.

Fishman notes that, according to Brookfield, the rents are $200 and $325 per square foot for the Bleecker Street retail vacancies. New retailers would be a good fit with the neighborhood he adds, saying he did not anticipate an influx of, for example, Subway sandwich shops.

“On Bleecker Street, we have a prime opportunity to help repopulate one of New York City’s most distinct retail corridors with new, innovative brands,” says Michael Goldban, head of retail leasing, Brookfield Properties. “The architecture, energy and authenticity of Bleecker Street and the West Village make for a special and unique destination, and we are committed to embracing and capitalizing on those attributes.”

With 416 Washington St., the retail tenants include AVO Construction and Yoga Via. There is a 3,600 square-foot availability where John Allan’s Premier Men’s Grooming Club recently vacated. The family office also purchased the approximately 15,055 square-foot underground parking garage which is zoned for 90 vehicles.

Fishman points to a tremendous amount of activity in the Tribeca area. However, it is not considered a high retail area but more of a neighborhood.

Speaking of neighbors—in the residential component, the River Lofts condominium has two building addresses of 92 Laight St. and 416 Washington St. Curbed magazine reported in 2016 Gwyneth Paltrow and ex-husband Chris Martin had listed their apartment in the condo complex for sale. In 2005, it reported that Meryl Streep had purchased a penthouse in the Laight Street building.

New York REIT’s Manhattan retail portfolio comprised seven properties totaling approximately 90,000 square feet. In addition to last week’s sales, in January HUBB NYC purchased the retail condominium unit and parking garage at 350 W. 42 St. for $25.1 million. That same month, RFR Realty purchased eight retail condominium units at 122 Greenwich Ave., also known as One Jackson Square, for $31 million. RFR, with Hines, was the original developer of the building.

In completing the sales, Fishman says, “The biggest challenge was these were being done in a time when there were an increasing number of retail vacancies throughout Manhattan, with many retail filings of bankruptcy.” Plus, the environment now is one of rising interest rates.

Although the sales are part of the REIT’s liquidation and dissolution plan, “This was still Manhattan real estate and the market will dictate what the properties are worth,” says Fishman. “It does not mean there were bargains to be had.”

In addition to Fishman, RKF VP Brian Segall, and associates Andrew Jacobs and George Martinecz represented New York REIT in the portfolio sales.

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