Empire State Realty Trust, Inc. is adding to its Manhattan portfolio thanks to striking a deal to buy a SoHo office building that offers nearly 400,000 square feet of space. The REIT paid $386 million for the property known as 555-557 Broadway to publishing company Scholastic, which has leased back 222,000 square feet at the building over a term of 15 years.
The asset, which sits between Spring and Prince Streets, features predominantly office space (368,000 square feet), along with 28,000 square feet of retail. Overall, the building is 70 percent leased. The retail portion is 100 percent occupied, with the average weighted term sitting at roughly eight years.
Newmark acted on behalf of Scholastic, with brokers Josh King, Avery Silverstein and Adam Spies leading the way.
The deal hasn't closed yet, but is expected to do so before the end of this month, according to Empire.
“We are pleased to welcome Scholastic to our roster of great companies who are our tenants and look forward to our new relationship with them,” Anthony E. Malkin, chairman and CEO of Empire State Realty, said in a statement.
“We are excited to bring this combination of contractual revenue, embedded growth, and significant value-creation potential from our ability to market the three uniquely large floors in a more than 110,000 square feet block.”
The buyer, as the name suggests, is known for owning the landmark Empire State Building in Midtown South, once the world's tallest building at 102 stories. Throughout Manhattan and Greater New York, Empire State Realty operated 7.8 million square feet of rentable office space, 743 residential units and 800,000 square feet of retail, as of September.
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