An Oreo cookie factory turned office tower on the edge of Manhattan’s Chelsea district has fetched $300 million, making it one of the areas most expensive property sales in recent years. New York City-based Somerset Partners LLC, a real estate private equity firm, has contracted to buy the property at 85 Tenth Avenue from a private partnership.
The deal represents Somerset’s first office building acquisition. The firm already has a $250 million portfolio of roughly 3,000 apartment units in the southwestern and southeastern U.S.
The property was built in 1913 for Nabisco. Over the past six years, investors have poured roughly $200 million into renovations. Those improvements included 12 building generators that each provide 2 megawatts of backup power, enough to power the building for as much as 30 days in the event of a blackout.
After the sweeping northeastern blackout of August 2003, electrical redundancy is a key selling point to tenants and investors alike. It clearly appeals to Somerset Partners’ equity investment director Keith Rubenstein, who calls it “ a first class office building.”
“With its impressive physical plant and its list of credit tenants, we believe that it is a secure long term investment and is perfect as our initial acquisition in the Manhattan office market,” adds Rubenstein.
The building is fully leased to credit tenants. The roster includes the U.S. Government, investment bank Lehman Brothers and spirits maker Moet Hennessy. Most floors boast water views of the lower Hudson River. On the retail level, two new restaurants led by celebrity chefs are expected to open.