Case Study

1440 Broadway

Opportunity
Monday Properties pursued a class A office portfolio in the fourth quarter of 2002 that contained two properties in Manhattan and one property in Detroit. The portfolio included 1440 Broadway, a 25-story, 743,207 square foot office building constructed in 1925 and located one block south of Times Square. The Times Square submarket had enjoyed a significant makeover as a result of targeted municipal efforts, revitalizing the area and providing increased options to creditworthy tenants seeking close proximity to Manhattan’s major transportation hub.
Transaction
Through its strong existing relationship with the Seller as managing agent, Monday Properties and The Landis Group acquired the portfolio in an off-market transaction from Credit Suite First Boston for an aggregate purchase price of $477.1 million ($293 PSF), with $230 million ($309 PSF) allocated to 1440 Broadway.
Results
Monday Properties served as the managing and leasing agent for the property since 1999. Beginning at that time and through its period of ownership it implemented approximately $49 million of capital improvements, highlighted by a lobby modernization, extensive exterior façade rehabilitation, and building system improvements. As a testament to Monday’s strong existing broker relationships and operator expertise, approximately 450,000 square feet of lease activity had been consummated since 2002, attracting such high-profile tenants as Liz Claiborne, Macy’s, Citibank, and Primedia. Its leasing campaign nearly complete, Monday Properties recapitalized the asset in August 2007 with Prudential Real Estate Advisors at a property valuation of $434,000,000 ($584 PSF), generating an overall portfolio net profit of $160 million and 42.31% IRR to the partnership. This transaction provided The Landis Group the opportunity to exit the asset at full value in a strong investment sales market. Monday Properties maintained its interest in 1440 Broadway and after a subsequent recapitalization with The Rockpoint Group in 2011, sold the property to American Realty Capital in 2013 for $525,000,000 ($700 PSF) generating a 93% IRR to the partnership.
Location
New York, NY
Property Type
Commercial
Square Footage
743,207 SF
Purchase Date
December 2002

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