APF Takes Charge of Club Row Building

NEW YORK CITY—APF Properties has bought out Prudential Real Estate Investors for full control of the Club Row Building at 28 W. 44th St. The investment firm has increased its stake from 20% to 100% in a deal that values the Midtown office and retail property at $235 million.

After learning that PREI intended to monetize its investment in the 95-year-old Club Row Building, “We could have easily exited the asset now along with our partner and reaped a substantial immediate profit,” says APF principal Kenneth Aschendorf. “However, we see a 'Part II' to this investment where we can capitalize on the transformation that has been completed.” APF and equity partner PREI paid $161 million to acquire the property in 2011 from SL Green Realty Corp.

The initial course of action was to replace PREI in the ownership. However, Aschendorf says, “Instead of going for the quick profit, we decided to step up in a big way and substantially increase our own personal investment in the building and buy out Prudential in a transaction that greatly benefits all parties.”

Since buying what was formerly known as the National Association Building and repositioning it as the Club Row Building, APF has seen the occupancy at 28 W. 44th increase from 88% to 98%. The company has also seen the market for class B office properties in Midtown rise considerably since completing its valuation in July, and can look forward to increased rental rates in the Grand Central District, which has appreciated less than any other Midtown submarkets.

There's also Club Row itself, so named for the concentration of iconic private clubs along 44th Street between Fifth Avenue and Avenue of the Americas, including the Harvard, Princeton, Yale, Penn and New York Yacht Clubs, a key element of the street becoming a prime block. Built in 1919, the 372,000-square-foot, 22-story tower is priced below true class A properties, and as such is “extremely well-positioned to compete and capture further rent growth,” says Aschendorf.