The office property at 156 William Street in lower Manhattan has sold to a Swiss Pension Fund for $40.75 million. The 12-story, 217,650 sq. ft. building is located near City Hall. The seller was C & K Properties, the Manhattan-based real estatefirm that already managed the property. Through a spokeswoman, C & K expects the property to post a 5.5% yield during the first full year of ownership.
Unlike other mid-20th century office buildings in lower Manhattan that have sold recently, the buyer claims to have no plans to convert it into a residential property. The building was constructed in 1955.
Brian Ezratty, vice chairman of Manhattan-based investment salesEastern Consolidated, says that the new buyer sees “tremendous upside” in keeping the building as an office use.
“The new buyer will profit from future tenant rental increments, as well as income from the building’s retail component, which currently stands vacant,” says Ezratty, who represented the seller.
How soon until that happens remains to be seen. With office vacancy in lower Manhattan hovering near 15%, many landlords are challenged to fill their office space with tenants. The new 7 World Trade Center will also deliver nearly 2 million sq. ft. to the market early next year, which could further weaken the market.
The property was listed on the Eastern Consolidated website at $42 million, or $1.25 million less than the actual sale price.