Willrich Holdings, a joint venture of the Willett Cos. LLC of Rye, NY and Warren & Partners of Dublin, purchased the property. The seller, National Office Partners LP, is a partnership between Hines and CalPERS. Jeffrey R. Dunne, vice chairman, and Steven P. Bardsley of CB Richard Ellis' tri-state investment team represented the seller and procured the buyer.
CBRE officials say that the deal is valued at $743 per sf, a new high-water mark for an office here. They add that the high price paid for 55 Railroad Ave. is a "testament to both the quality and location of the property, the long-term, stable income stream derived from a stellar rent roll and investors' insatiable appetite for office property in the supply-constrained Greenwich market." The previous office property sales record in Greenwich was set several years ago when Broadway Partners purchased Pickwick Plaza in a deal estimated at about $483 per sf.
The fully leased 55 Railroad Ave. property is located at the foot of Greenwich Avenue across the street from the Greenwich Metro North station. The Hines/CalPERS partnership recently completed $7.2 million in renovations to the building that included upgrades to the lobby, common areas, facade and other building systems. The property is leased to a group of financial services and hedge funds.
"Hedge funds and other specialty financial service firms, in particular, have focused on Greenwich as a must-have location, both for its proximity to desirable residential locations, access to an unusually educated labor pool, transportation options and influential business community," says Hines senior vice president Tommy Craig. "Competition between these firms has driven available supply in Greenwich down, especially in the CBD, and pushed up rents." Tenants at 55 Railroad Ave. are paying between $50 to more than $60 per sf on a net basis.
CBRE's Dunne, who led the sales effort, says the competition was intense from investors, particularly those with access to offshore capital. Frank Kenny of the Willett Cos. says his partnership emerged the victor after three rounds of bidding. "55 Railroad Ave. provided an opportunity for our investors/partners to acquire a 100%-leased, first-class office building in a superb location in one of the most affluent communities in the US," Kenny says. Bruce Beswick, chief financial officer of the Willett, adds the firm plans to retain the property as a long-term investment.
In the spring of this year, the partnership of Willett and Warren & Partners purchased 150-200 Meadowlands Parkway, a 220,000-sf office building in Secaucus, NJ, from Hartz Mountain. The transaction, valued at approximately $31 million, was also brokered by CBRE.
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