AmTrust RE is placing a bet on New York's strong recovering office sector with a new $65.5 million acquisition of a Midtown East, Manhattan building.
The 268,000-square-foot property, called 360 Lexington Avenue, was first built in 1959 and has undergone renovation over the past few years. Some of the upgrades included the elevators and the lobby. Also, the property management company plans to build off that by enhancing the building's exterior facade, which AmTrust said will boost energy efficiency and insulation. Additionally, the New York-based firm wants to incorporate amenity spaces, which include lounges and conference rooms.
Currently, 360 Lexington holds occupancy of roughly 60 percent. Some tenants at the property include Starbucks, European Wax Center, Makimaki Sushi, Webster Bank, and Sisley Paris.
The asset is within walking distance from Grand Central Terminal, which surrounds multiple retailers and eateries.
AmTrust will hope that further amentizing 360 Lexington will find untapped potential in the building. After all, it's proven that the right type of office assets can work in New York, which is the live, work, and play setting.
In August, Manhattan offices were found to be 73.4 percent as busy compared with the same month in 2019, according to a recent report from Avison Young. That's up significantly from the national average of 60.4 percent. Rudin Management Company, for one, is even seeing some of its New York office properties operate at occupancy higher than pre-pandemic levels. So there will be an opportunity for 360 Lexington.
“With major companies increasingly mandating that employees return to the office on a full-time or hybrid basis, we continue to see significant upside in well-maintained, strategically located commercial properties we’re able to acquire at a favorable basis,” Jonathan Bennett, president of AmTrust, said in a statement.
“More than four years since the start of COVID, office leasing activity continues creeping up in Midtown and other New York City submarkets, especially in properties featuring high-end design."
AmTrust's portfolio holds a major concentration in New York properties including eight-story commercial property 203 Jay Street, 33-story luxury residential tower The Amberly, 31-story office tower 250 Broadway, and 43-story office tower 59 Maiden Lane. Also, Chicago is a key market for the firm.
Newmark represented AmTrust on 360 Lexington along with the seller, which was undisclosed.