Our first thought on hearing the price for this sale was whether it was even a Samsung “remote” possibility. But yes, we’ve confirmed that TIAA-CREF is in contract to shatter a Meatpacking District sales record by paying $200 million for 837 Washington St.
The price for the newly constructed 63,131-square-foot boutique office and retail building works out to $3,158 per square foot, largely based on the value of the retail space and future upside in one of the world’s hottest neighborhoods.
For now, the buyer will have a “coupon to clip” as it rakes in just over 4 percent, based on Samsung’s rent for the 10-year deal which, similar to others, has two five-year renewals.
The Korean tech giant leased the entire building for offices and a marketing center to show off its leading-edge products. The office rent was previously reported at $125 per square foot, with around $450 per square foot attributed to the retail space of 8,500 square feet.
The building’s sellers are Taconic Investment Partners along with Joe Sitt’s Thor Equities, which bought its 75 percent stake for $55 million in 2011.
Investment broker Douglas Harmon, along with Adam Spies and Kevin Donner of Eastdil Secured, widely marketed the building, which sits across from the High Line and the Standard Hotel.
Designed by Morris Adjmi, it has greenhouse walls suspended from an industrial-styled iron lattice set over the original small building that was also enhanced with large retail windows.
At the corner of West 13th Street, it sits just up Washington Street from the new Whitney Museum, which is scheduled to open this spring and expected to also influence pedestrian paths.
In the area, along with the sale of the Scoop and Milk buildings, Harmon and his team were responsible for selling the Standard Hotel and securing Property Group Partners as an investor with the Romanoff family, which is currently developing the office and retail at 860 Washington St. — both across the street from No. 837.
Harmon previously sold 111 Eighth Ave. for Taconic and Jamestown to Google for $1.77 billion, and sold an investment in the 14th Street Apple building from Clarion to TIAA-CREF, where it is already partners with Taconic.
Around the corner, Harmon sold Michael and Brandon Miller’s Real Estate Equities the former Mobil Car Wash. The Millers redeveloped this into 16,000 square feet of retail on the ground and another 9,000 square feet of basement. The empty vanilla box is ready for retail and was just resold through Avison Young to Savanna for $80 million. The parties either did not return calls and e-mails or declined to comment.
Meanwhile, Joe Sitt’s son, Jack Sitt, is busy making his own deals in other hot neighborhoods through his company, Colt Equities. The scion just paid $9 million for the 10,000-square-foot retail building at 93 N. 9th St. in Williamsburg, where he is planning a new retail façade and new roof.
The deal shows just how much values have risen in Williamsburg. In December 2012, the sellers, Imperium North Ninth, paid $4.5 million for the 100-by-100-square-foot property that sits between Wythe Avenue and Berry Street.
Jack Sitt’s first investment for Colt was a parking lot in Soho at 11 Greene St. This corner of Canal Street was purchased in May 2014 along with Ruby Ventures. The developers are planning a luxury residential project designed by Gene Kaufman.
Six digital media companies owned by Media General will be consolidating on the 62nd floor of the Empire State Building.
James Gross and Peter Gross of Douglas Elliman Commercial represented Media General in the deal for 26,782 feet.
The Richmond, Va., based company houses one of the divisions in the Empire State Realty Trust-owned 60 E. 42nd St.
ESRT, which also owns the Empire State Building, was represented in-house by Fred Posniak of ESRT, along with a Newmark Grubb Knight Frank team of William Cohen, Jonathan Tootell and Shanae Ursini.
Asking rents there start in the low- to mid-$60s depending on the floors.
Media General merged with LIN Media in December 2014.
No one returned requests for comment.
In October, clients of the tax certiorari firm Goldberg & Iryami were contacted by the US Attorney’s office, we’ve learned, as part of its grand jury investigation that included obtaining files from the Real Estate Board of New York about the 421a tax abatement program.
On condition of anonymity, one owner told us his years’ old retainer agreement was only with Goldberg. He was “in shock” when advised by investigators that the legal fees were being split with Assembly Speaker Sheldon Silver, who has now been arrested for not-disclosing this income, along with other fees.
Was he developer No. 2? He had no clue.
For those who accuse Silver of “selling out the tenants” in return for donations, which are practically required not to garner favor but rather to prevent retaliation, this owner said Silver didn’t do the real estate industry any favors when the rent laws were renewed last time, and were instead made more onerous for properties.
The 421a, a program that is now under the microscope, provides property tax incentives to build both affordable and market-rate housing and eases the higher taxes over time. But it has been criticized for allowing luxury apartments to also pay less in taxes — forgetting the financial risks that could just as easily leave these projects swinging empty in the wind.
The 421a and the tenant rent “protection” acts expire on the same day in June and, in light of the investigations, negotiations should get heated. Stay tuned.
