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The Terminal Stores building The Terminal Stores building recently sold for $900 million./photo by Betsy Kim

NEW YORK CITY—L&L Holding Co. and Normandy Real Estate Partners are buying Terminal Stores, at 271 Eleventh Ave. from Waterfront New York and GreenOak Real Estate Advisors for $900 million, as reported in The Wall Street Journal. CBRE‘s Darcy Stacom and Bill Shanahan represented the sellers.

The 1.3 million square-foot former warehouse extends from W. 27th to W. 28th streets, spanning Eleventh to Twelfth avenues. The WSJ noted the price tag was triple the property’s valuation four years ago. In 1983, Waterfront purchased the property for $12 million. In 2014, when GreenOak acquired a 49% interest in the property, it was valued at $300 million. That partnership invested $50 million renovating office and retail space in the building.

Craig Leibowitz, Jones Lang Lasalle’s director of research, New York, leads a team focused on the Midtown and Midtown South markets.

Craig Leibowitz Craig Leibowitz, JLL’s director of research, New York

“This was a perfect storm,” Leibowitz tells GlobeSt.com. He points to the current, strong market conditions with historically record low unemployment and record high office-using employment. “Unlike with prior cycles, we have less reliance on financial services, and companies much more diversified and inclusive of tech and other creative firms are attracted to the type of product that Midtown South offers.”

The new owners are planning to convert 500,000 square feet in the building into space to lease. Leibowitz says there’s an insatiable demand among the investor community for value-add product. “We have record levels of dry powder that’s chasing opportunistic and value-add products specifically.” JLL estimates that two-thirds of fund strategies are dedicated to this segment.

Betsy Kim

Betsy Kim is the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.

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