NEW YORK CITY—Newmark Knight Frank's New York capital markets team has been exclusively retained to sell a 48% equity interest in 1540 Broadway. The 44-story, 909,000-square-foot, dark glass, office tower, topped with a six-story spire, is often still referred to as the Bertelsmann Building. It stands in the heart of Times Square, located at the northeast corner of Broadway and West 45th Street.

1540 Broadway's anticipated valuation is $925 million or approximately $1,000 per square foot.

Currently, the asset is 92% leased. According to NFK, 1540 Broadway's net operating income is expected to rise by as much as 32% over the next six years as the vacancies in the building are leased and near to medium term rents that are 8% to 10% below current market levels are set at fair market prices.

The property is currently undergoing a $30 million repositioning, scheduled for completion in 2018. The renovations will modernize the entrances, lobby, elevators, amenities and building systems.

Joint venture partners EDGE Fund Advisors, a Washington, DC-based fund operator and London-based HSBC, retained NKF to sell the 48.165% joint venture stake in the property. The sale of the interest places it below the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax threshold, which would be a significant tax benefit and attraction for international investors. Current tenants include law firms, Duane Morris and Pillsbury Winthrop Shaw Pittman; Adobe, Yahoo, Xinhua News Agency and Viacom.

NKF's vice chairman, Edward Maher, and senior managing directors, Alex Foshay and David Colen, will be leading the sales efforts. Foshay recently joined the team, transferring from NKF's London capital markets team. He tells GlobeSt.com that the asset has just entered the market, so no formal execution timeline has been put in place at this stage.

Built in 1990, the building name that people still often use stems from when it was the North American headquarters of the international media enterprise, Bertelsmann. The company occupied all the office floors from 1992 until June 2004, when it vacated and sold the building.

Instant Insights /

Equity Interest in Bertelsmann Building for Sale

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