Monday pursued an opportunity to acquire 260 Park Avenue South, an 189,134 square foot office building located one block from historic Gramercy Park in the burgeoning Park Avenue South submarket. A 24-hour neighborhood blending residential and office buildings, parks, restaurants and rich nightlife, Park Avenue South is in the midst of revitalization. The 25-story commercial building was owned and 100% occupied by the United Federation of Teachers (UFT), serving as their headquarters until they relocated and marketed the building in 2002. With the UFT’s relocation pending, 260 Park Avenue South would provide ownership an entirely vacant building in an excellent residential and office location.
Through its strong existing relationship with the United Federation of Teachers, Monday learned of their desire to divest 260 Park Avenue South and immediately expressed a strong interest in purchasing the asset. Monday Properties, Tessler Development and capital partner Island Capital acquired 260 Park Avenue South in August 2002 for $45.1 million ($240 PSF). With its superb location prime for either office or residential use, the venture strategically redeveloped the asset for residential use at a total project cost of $150 million ($793 PSF). In 2005, as construction was commencing, Monday led a $127 million construction refinancing from HSH Nordbank.
In 2005, the Property began its successful conversion into a 110-unit luxury residential condominium featuring ground-level retail, a 24-hour doorman, rooftop terrace and state-of-the-art fitness center. All residential units were equipped with hardwood oak floors, gourmet kitchens and high-end finishes. Sellout of the units was achieved in 2007 at an average price of $1,150 per square foot, a 40% improvement to pro forma. Sales generated an overall net profit of $54 million and 60.29% IRR for the venture.