Office, Retail On Market for $41M

NEW YORK CITY-A boutique office and retail property at 1369 Broadway or 120 W. 37th St., between Penn Station and Times Square is up for sale for $41 million. The seller, 1369 Broadway Owners LLC wants to redeploy the proceeds of the sale toward the acquisition of larger assets, according to locally based Eastern Consolidated, who is marketing the property.

Eastern Consolidated executive directors Eric Anton and Ronald Solarz with analyst Jared Toothman are marketing the six-story, 28,634-sf property. According to Eastern Consolidated, the building is ideal for small office tenants seeking a full-floor identity in close proximity to public transportation.

Anton notes that the office space offers tremendous near-term upside when leases on all five floors expire in Dec. 2010. “The average office rent is $31.95 per sf, half the rent avenue buildings in the immediate vicinity are achieving.”

The retail component affords similar upside, with the Subway and Vitamin Gallery spaces expiring within four months of the office leases. The two spaces average $232 per sf, well below market rate. The owner recently executed leases at $338 and $350 per sf for the two spaces adjacent to Vitamin Gallery.

According to Solarz, another advantage is that there are 12,420 sf or four full floors of unused air rights on the property. “Four full floors could be built on top of the existing structure or a developer could construct a completely new building totaling 31,050 sf,” he says. The owner structured all leases to expire or to be eligible for termination by the first quarter of 2013.

Built in 1928 and currently 100% occupied, 1369 Broadway’s location is within walking distance of 14 subway lines, the Long Island Railroad, New Jersey Transit, Amtrak, PATH and the Port Authority Bus Terminal.