NEW YORK CITY—L&L Holding Company, Normandy Real Estate Partners and an institutional investor advised by J.P. Morgan Asset Management have closed on an $880 million acquisition of Terminal Stores, a 1.2 million square-foot building on the far west side of Chelsea in Manhattan. In August, Bloomberg reported the California State Teachers' Retirement System was one of the investors. Although CalSTRS declined to comment to GlobeSt.com, Real Capital Analytics also lists the pension fund as one of the buyers.

The partnership acquired the property from Waterfront New York and GreenOak Real Estate Advisors LP. The $880 million acquisition and subsequent redevelopment of the Terminal Stores will be financed in part by $520 million in equity from Normandy, L&L Holding, J.P. Morgan and other institutional investors. In addition, Blackstone Mortgage Trust has led the $650 million acquisition and predevelopment loan along with Apollo and Goldman Sachs as co-lenders.

The massive brick building extends from Eleventh to Twelfth Avenue, and from W. 27th to W. 28th Street. The new owners will redevelop the former warehouse complex constructed in the 19th century into contemporary office and retail space. This will include converting approximately 500,000 square feet of self-storage space to Class A offices.

“The Terminal Stores is a magnificent property that echoes the rich history and authenticity of New York City, while also speaking to the area's current vibrancy and limitless potential,” says L&L Holding chairman and CEO David Levinson. “Normandy and J.P. Morgan are the perfect partners for this West Chelsea redevelopment, where demand for offices, showrooms, event space, eateries and high-end galleries continues to grow.”

“Normandy Real Estate Partners, along with L&L, have extensive and successful track records of taking historic and underused properties and renovating them to the benefit of the neighborhoods, communities, and all stakeholders involved,” says David Welsh, founder and partner at Normandy.

Peter Sibilia, co-head of the northeast region, real estate Americas, at J.P. Morgan Asset Management, compares the project to his company's early investments in Hudson Yards and Midtown South. He notes, “Terminal Stores offered the opportunity to invest in neighborhood-defining, transformational and irreplaceable real estate.”

Constructed in 1891, Terminal Stores originally served the railroad lines that dominated the middle Hudson River waterfront. Coleman Burke of Waterfront NY purchased the property in 1983, repurposing it into self-storage space and commercial office use. Uber Technologies, L'Oréal USA and architectural firm Grimshaw are current tenants in the building.

Darcy Stacom and Bill Shanahan of CBRE exclusively represented the seller. There were no outside brokers for the buyer. James Millon, Tom Traynor, Ethan Gottlieb and PJ Finley with CBRE Debt & Structured Finance arranged the $650 million acquisition financing.

Teams led by Peter Olsen, Bruce DePaola and Gerd Alexander from Paul Hastings, Debevoise & Plimpton's Peter Irwin and David Nagler of Skadden provided legal representation for the buyer. Janice Mac Avoy, Jonathan L. Mechanic and Ross Z. Silver of Fried Frank were the attorneys for the seller.

Instant Insights /

L&L, Normandy and J.P. Morgan Close on $880M Acquisition of Terminal Stores

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