Chelsea's Terminal Stores Fetches $900M In Latest Landmark Sale
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L&L Holding and Normandy Real Estate Partners is paying around $900M for a former warehouse in Chelsea with the aim of redeveloping it.
A partnership between Waterfront New York and GreenOak Real Estate Advisors is the seller, the Wall Street Journal reports. Ultimately, the new owners plan to invest significant capital into repositioning the 1.3M SF building, 500K SF of which is used for storage. That part of the building would like be converted into office space.
The $900M price tag is triple the building’s last valuation. The building spans an entire block between 11th and 12th avenues and West 27th and West 28th streets. Waterfront paid $12M for the building in 1983, and GreenOak bought a 49% stake in the property in 2014, according to the WSJ, which valued the building at $300M. The partnership has since spent around $50M doing a makeover on the space, and Uber and L’Oréal USA are among its tenants.
L&L has already revamped several buildings around the city. It spent $47M redoing 195 Broadway, known as the American Telephone & Telegraph Co. building. It is also responsible for 200 Fifth Ave. in the Flatiron district.
This fall, the firm will open its radically transformed office building at 390 Madison Ave. The renovation there saw L&L — funded by the New York State Common Retirement Fund via investment adviser Clarion Partners — removing tons of steel and concrete from the base to build new floors on top of the building. The new structure is 108 feet taller than the original building and now reaches 32 stories.
Though the Manhattan investment sales market has seen some signs of returning this year, there have been few blockbuster trades like this one in 2018. Google’s acquisition of the nearby Chelsea Market building from Jamestown for $2.4B and Savanna’s purchase of 5 Bryant Park for $640M have been some of the biggest sales this year. CBRE's Darcy Stacom and Bill Shanahan represented the seller in the deal.
CORRECTION, JULY 30, 4:39 P.M. ET: Terminal Stores is 1.3M SF. A previous version of this story misstated the size of the building.
CORRECTION, AUG. 6 3:17 P.M. ET: GreenOak Real Estate Advisors bought a 49% stake in Terminal Stores in 2014. An earlier version of this story misstated when the firm made the investment. This story has been updated.