Harlem Office Resilient As Underdog In Office Investments

NEW YORK CITY- Harlem has always had a smaller sample size of office product relative to the rest of the city. But that hasn’t stopped developers from building in the submarket and convincing investors to wrap their heads around smaller office floor sizes, Brent Glodowski, director at Avison Young, tells GlobeSt.com. 

Often it is a challenge to convince typical office investors who are used to over 100,000-square-foot properties to focus their attention towards a 20,000-square-foot asset in a submarket, which they likely hadn’t previously considered, he said. “When someone builds an office building in Harlem they do so with more of a hope or certainty that it can be filled with quality tenants,” Glodowski said.

Serving as an example is 268 Lenox Ave., which Avison Young arranged the sale of the leasehold interest of the four-story office building between 124th and 125th streets in Manhattan for $10.2 million. The fully occupied 286 Lenox Ave. property has a 99-year ground lease.

Wells Fargo, Visiting Nurse Services and Child Mind Institute are current tenants of the property and have a strong track record, “and a particular desire to serve the Harlem community as opposed to much larger office buildings south of 96th Street, which look to fill their floor plates with whoever is willing to pay the highest rent,” Glodowski said.

A team of Avison Young brokers was able to identify the buyer for the turnkey asset, who was attracted to the building’s location in addition to its strong tenant mix. What was most noteworthy about the property is its location, according to Glodowski. “We consider the corner of 125th street and Lenox Avenue to be “Main & Main” in Harlem.  You’re right at the 2 and 3 subway line, across the street from Whole Foods, and a block from the Red Rooster just to name a few tenants.”