American Realty Capital New York Recovery REIT Inc. (ARC) entered into a purchase and sale agreement to acquire the fee simple interest in an institutional-quality office building at 218 West 18th Street in the Chelsea neighborhood of Manhattan from a joint venture between Atlas Capital Group and GreenOak Real Estate. The purchase price for the building is $112 million, exclusive of closing costs.
Last year, Atlas and GreenOak purchased the defaulted loan and subsequently took ownership of the property through a prepackaged bankruptcy restructuring. Since that time, Atlas and GreenOak have entered into lease agreements with Red Bull North America Inc., SAE Institute of Technology Corp. and Yammer Inc. (a subsidiary of Microsoft Corp.) for seven floors of the building. Company 3 LLC and SY Partners round out the tenant roster at the 166,000-sq.-ft. property, which is now 84 percent leased.
"This acquisition will kickstart 2013 for our fund by adding another institutional-quality office building to our portfolio," Michael A. Happel, chief investment officer of ARC, said in a statement.
"This significant acquisition comes on the heels of the $124.4 million of purchases that we completed at the end of 2012,” Happel continued. “With this addition, our portfolio nears $500 million of asset value. 218 West 18th Street gives ARC its first exposure to the Midtown South sub-market known as ‘Silicon Alley’ in exclusive Chelsea. The building has a roster of first-class tenants and has recently undergone a comprehensive renovation."