David Werner Real Estate Investments has closed on its $270 million purchase of Midtown property office tower, One Dag. J.P Morgan has provided $250 million in acquisition financing to support the buy, which was arranged by Newmark.
The capitalization of the 50-story building exceeds $330 million. Rockpoint, which sold the property, purchased One Dag in 2019 for roughly $600 million, representing a major discount for David Werner's investment firm.
Newmark said that One Dag, positioned between 47th and 48th Streets, offers "a distinctive workplace experience in one of New York City's most internationally recognized office corridors." The about 870,000-square-foot asset is within walking distance of Grand Central Terminal and various retail options.
The Class A building has seen more than $20 million in capital improvements. Its features include a flagship retail concourse and up to 33,000-square-foot floorplates.
David Werner's bet comes after he scooped up a Hell's Kitchen office property for just over $40 million, a $90 million discount from what DivcoWest spent to acquire the building in 2018, as reported by The Real Deal.
It's unclear what the plans are for both properties — but David Werner Real Estate has been working on one of the largest office-to-residential conversions in New York City, transforming 219 and 235 East 42nd Street into 1,602 luxury apartments.
Office leasing momentum in Manhattan picked up in May, with activity surging by 17.3 percent compared with a month earlier to 4.24 million square feet, according to a market report from Colliers. Year-to-date, signings have now hit 19.63 million square feet — putting the market on pace for the best volume seen since 2020.
Additionally, Midtown's signings more than doubled from April and exceeded the decade average by almost 75 percent. Midtown average asking rents were $84.15 per square foot, a small decrease from the $84.42 per square foot posted in the prior month.
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