Vornado, Albanese To Sell Chelsea Office For $205M
With prime Manhattan offices suddenly all the rage, a joint venture led by Vornado Realty Trust is offloading a fully leased Chelsea tower.
Vornado announced Wednesday that it has reached a deal to sell 512 W. 22nd St., which it co-developed alongside The Albanese Organization and The Olayan Group, for $205M. The REIT owns a 55% stake in the ownership joint venture.
MKF Realty is the buyer, Commercial Observer reported. Vornado didn’t identify a buyer in its press release.
The sale of the 173K SF office building is expected to close in the third quarter. The developers will use a portion of the proceeds to repay the $123.6M mortgage tied to the building.
A Vornado spokesperson declined to comment further. MKF couldn't be reached for comment.
The property, which sits directly next to the High Line, was originally a cold storage warehouse that was converted into a parking garage in the 1970s, CO previously reported. Permits for redevelopment were first filed in 2014, according to New York Yimby.
Construction involved adding six new stories over the existing five-story structure.
In 2017, architecture firm Fogarty Finger was hired to design two prebuilt office suites on the fifth floor which were completed in December 2020, according to CO. However, to attract more tenants, the developers added additional spec space on the fourth, sixth and seventh floors during the pandemic.
Asking rents ranged from $100 to $160 per SF, according to the 2021 CO report.
In 2019, WarnerMedia signed a lease to anchor the building, taking over 20K SF, The Real Deal reported at the time. E-commerce loyalty program company Next Jump took the building's top three floors that December, Crain's New York Business reported. Smaller financial services tenants have also moved in.
Both the office and retail space in the building were 100% occupied at the end of last year, according to Vornado's 2024 annual report.
