New York, NY – The Kaufman Arcade Building, an exceptionally well-located block-through 196,804-square-foot commercial loft and retail property at 139-145 West 35th Street/132-138 West 36th Street, is on the market for the first time in more than 60 years through Eastern Consolidated.
Eastern Consolidated’s Vice Chairman and Principal Brian Ezratty, Executive Managing Director and Principal David Schechtman and Scott Ellard, Director, Financial Services and Principal are spearheading the marketing initiative on behalf of the seller, the Kaufman Organization, one of New York’s visionary real estate families who helped create and shape the Garment Center district in the West 30s.
Built in 1922 and situated directly opposite Macy’s, the 12-story Arcade Building features both 35th and 36th Street entrances and an artfully restored, full-length lobby with a central core between the two entrances. Boasting upper floor ceiling heights of approximately 11 ½ feet and natural light on three sides on many of its floors, the meticulously maintained property is comprised of commercial loft space on the upper floors and valuable retail space on the ground floor and mezzanine levels.
“There is virtually no similar for-sale office space on the market at this time and investors will be attracted to the long-term potential of this well-constructed building in a transforming neighborhood,” Ezratty said, notingthat several million dollars have been recently invested to upgrade the electric, plumbing and elevator systems, complete Local Law 11 work, renovate the penthouse level and replace virtually all of the 742 windows throughout the building. “With its characteristic high ceilings and central location to all important Midtown destinations, there is a real opportunity to capture high rents being achieved today and anticipated moving forward.”
Currently, upper floor base rents average approximately $22-23 per square foot in what is arguably a $30-35 per square foot leasing market, according to Schechtman. “The Arcade Building has significant upside in the ability to re-measure its upper floors to capture the full rentable square footage and potentially add a valuable additional 15,000 square feet in the rentable area,” he said. “Given the exciting development efforts nearby on the Far West Side, the stage is now set for rents at the property to also increase substantially.”
Based on current market projections, the net operating income at the property is expected to grow from the mid-$3,000,000 level to the mid-$5,000,000 range over the next five to six years with 74% of the building’s leases expiring by 2018. Most importantly, the building is also in the direct path of the burgeoning expansion of Midtown West to the Hudson Yards and within the Fashion District, which is now evolving and diversifying to consolidate its presence in the fashion industry as well as incorporate other industry sectors – including technology companies and social media firms - moving forward.
“As a long-term investment, there’s no better time to capture the exciting change happening in the office market in Herald Square than now,” Ezratty added. “At the same time, as zoning designations change and alternate uses are allowed, the building can also support other uses, such as a hotel.”
The Arcade Building is half-way between the retail and entertainment centers of Herald Square and Times Square, a few blocks walk to the transportation hubs at Penn Station, Grand Central Station and Port Authority and at the midpoint between the major crosstown thoroughfares of 34th and 42nd Streets.
For further information, please call Mr. Schechtman or Mr. Ezratty at Eastern Consolidated’s Midtown offices, 212 499-7700.
Founded in 1981, Manhattan-based Eastern Consolidated is one of the country’s preeminent full-service real estate investment services firms, offering unrivaled expertise in the greater New York marketplace to an impressive worldwide roster of institutional and private investor clients. The 40-person team of brokers, who, combined, offer fluency in 11 languages, come from a wide diversity of entrepreneurial and professional backgrounds. With annual sales up to $4 billion, Eastern Consolidated focuses on the acquisition, disposition and finance of all types of properties.