A trio of investors is betting that one of the best-performing office markets in the world will continue to hold strong. That's Midtown Manhattan, where DelShah Capital, A.M. Properties and REALM have teamed up to buy CitySpire, which is the office condominium portion of the 70-story tower at 156 West 56th Street.
The asset was acquired at an 8.5 percent cap rate, with the Commercial Observer reporting that Affinius Capital provided $88 million in acquisition financing to support the deal.
Since the pandemic, Manhattan has to no secret enjoyed one of the best recoveries since the pandemic. Midtown well-located assets, according to a Green Street ranking cited by the investors, are an added bonus. This is because the area benefits from constrained supply and strong tenant demand.
"CitySpire represents the type of opportunity we seek in today's market," Travis King, founder and CEO of REALM, said in a statement.
"While capital markets remain cautious on office, we see strong fundamentals in premier Midtown assets, where leasing activity and occupancy continue to outperform. CitySpire reflects our focus on highly selective investments with strong downside protection and long-term upside."
The CitySpire currently commands a 98 percent occupancy rate. Recently, the 377,000 square feet space across 24 floors underwent a roughly $22 million renovation, with no additional capital expenditures required in the property. The capital improvement plan included upgrades to common areas and high-end finishes.
Some tenants at CitySpire include Windels Marx Lane & Mittendorf, LLP, New York Road Runners and Caleres.
In terms of five-year projected M-RevPAF growth, Green Street ranks the New York office market first in its rankings. Additionally, JLL is predictingthat $300 per square foot office rents could become the new normal after the recent record-breaking deal at 9 West 57th Street.
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