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Investcorp-Brickman Partner on Garment District Buy

229 W. 36th St. is a fully-leased 12-story office building that totals nearly 149,000 square feet. 229 W. 36th St. is a fully-leased 12-story office building that totals nearly 149,000 square feet.

NEW YORK CITY—Investcorp and Brickman have partnered on the purchase of two office buildings on 36th and 38th streets from New York REIT for a combined price of approximately $156 million.

The joint venture acquired 229 W. 36th St. and 256 W. 38th St. in Midtown Manhattan that are fully leased to a roster of more than 20 long-term tenants and combined total approximately 267,000 square feet. Investcorp states that both properties maintain strong cash flows, proven operating histories and high occupancy rates. 256 W. 38th St. is a 14-story, 117,902-square-foot office building. 229 W. 36th St. is a 12-story office building that totals nearly 149,000 square feet.

The deal continues the asset sales by New York REIT, which on Nov. 2 announced it had entered a contract with CIM Group Acquisitions, LLC to sell 1440 Broadway for $520 million. In October, the company reported it had sold office buildings at 245-249 West 17th St. and 218 West 18th St. to Columbia Property Trust for $515.1 million.

Mohammed Alardhi, executive chairman of Investcorp, says its purchase deal in Manhattan is part of its strategy to increase its U.S. real estate portfolio, which is a key component of the Bahrain-based firm’s growth strategy. “As one of the largest foreign investors in U.S. real estate, we have invested over $2 billion in the last 18 months and will continue to focus on uncovering opportunities in gateway cities across the country,” he adds.

“These centrally located properties are well-positioned to benefit over the long term from the development activity around Hudson Yards, Manhattan West, Penn Station and Moynihan Station while providing stable, in-place cash flows to our investors,” says Brian Kelley, managing director in real estate investment at Investcorp. “We are excited to enter into our third partnership with Brickman, as we believe their investment and management capabilities will unlock immediate value in each of the properties.”

Investcorp notes that as part of its joint venture with Brickman, the New York City-based real estate operator and management firm maintains its joint venture interest in the properties and will serve as the managing and leasing agent for the property.

The Investcorp-Brickman partnership secured $86.25 million in financing for the purchase from MetLife. Cushman & Wakefield’s Doug Harmon, Adam Spies, Adam Doneger and Kevin Donner represented the seller in the sale, and the brokerage firm’s Steven Kohn and Gideon Gil brokered the financing transaction.

On Oct. 27th, Investcorp reported the completion of its first European real estate portfolio following the acquisition of seven assets.

The completion of the firm’s debut European portfolio—its UK Industrial and Logistics portfolio—was the first step in the firm’s strategy to build on its success in the US real estate market. The European strategy was launched in 2016 and with its latest acquisitions now exceeds $100 million.

 

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