Crossing Delancey: Two LES Buildings Sell for $48.5 Million
Marx Realty’s purchase of Lower East Side buildings at 135 and 161 Bowery demonstrates a continued demand in the neighborhood by creative and tech industry tenants.
NEW YORK CITY—“Crossing Delancey” is a nostalgic cinematic look at the Lower East Side, now undergoing rapid changes.
Marx Realty, a division of Merchants’ National Properties, bought two Lower East Side office and retail properties, located at 135 and 161 Bowery St. for $48.5 million. A joint venture of Caspi Development, RWN Real Estate Partners and Artemis Real Estate Partners sold 135 Bowery. The same joint venture with Ultimate Realty sold 161 Bowery.
Craig Deitelzweig, president and CEO of Marx Realty, describes both properties in a vibrant neighborhood as a perfect fit for the real estate firm’s growth strategy, and an opportunity to add value to their portfolio.
The transaction represents Marx Realty’s continued expansion in New York, building on its 4.3 million square-foot commercial real estate portfolio.
“Both buildings are architecturally significant and are located one block away from each other in the very dynamic Bowery neighborhood,” says Deitelzweig. “The constructed office space in both properties has broad appeal to tenants across a variety of business sectors.”
Avison Young was the sole broker with James Nelson, principal and head of tri-state investment sales, leading the sale negotiations. “This sale demonstrates that, with the right product and location, there is still strong demand in the marketplace,” says Nelson. “We were able to identify a well-established purchaser who utilized a 1031 tax-free exchange, and orchestrate a very smooth and easy process with real professionals on both sides of the table.”
Built in 2016, 135 Bowery is located between Grand and Broome streets. The modern, eight-story building with 23,000 square feet of space includes street-level retail and offices on the second through eighth floors. The building is currently fully leased. Its tenants include visual effects company Lola, creative agency Minds + Assembly, trading technology firm Tradewind, and attorneys Martin Liu & Associates. In September 2015, it was sold to the joint venture by First American International for $16.1 million.
Originally constructed in 1920 and redeveloped in 2016, 161 Bowery is between Broome and Delancey streets. The seven-floor building also includes street-level retail and office spaces distributed over 25,000 square feet. Also fully leased, this building’s tenants include Warner Music, social media giant Kik Interactive, advertising firm Space 150, multinational educational startup Brainly and Mark Fisher Fitness on the ground floor. In May 2014, 161 Bowery LLC sold this building to the joint venture for $12.8 million.
From the last sales within the past five years the two properties together recently sold for an increased value of $19.6 million. The sales prices were recorded in Real Capital Analytics.
Deitelzweig notes the Lower East Side neighborhood has attracted the art, music, fashion and media industry for decades. Now even more creative and tech firms are “Crossing Delancey.” “The current tenants at both properties are a testament to the neighborhood’s continuous growth and exciting future,” he says.