Empire Capital’s co-founders entered into a contract earlier this year to purchase 381 and 373 Park Avenue South from the Hemmerdinger family’s ATCO Properties. The real deal previously reported.
Now, Olmstead has purchased ATCO’s office buildings for $104 million, with Empire retaining a small portion of the deal.
“373 and 381 Park are quintessential Olmstead buildings – classic architecture, prime location and untapped potential,” Olmstead principal Steve Marvin said in a statement. “Our broader portfolio is 95 percent leased because tenants value the way we operate and manage our buildings. That strong demand positions us well to bring new energy and new tenants to these two properties.”
Bank of New York Mellon is financing the deal at a 60 percent loan-to-appreciation of $140 million, which a source said is the all-in cost of purchasing and upgrading the buildings.
Commercial Observer first reported the purchase.
A Newmark team led by Adam Spies and Adam Doneger negotiated the sale. Jordan Roeschlaub and Daniel Fromm of Newmark arranged the financing.
Rahmani and Khalil put the deal under contract in May, and it was common knowledge in the industry that they planned to reverse the contract in the following months. The final deal essentially works like a flip, leaving Empire in with a small equity.
It’s a deal model that other investors (the most famous of which is David Werner) use to make quick profits.
Olmstead said it plans to modernize the properties, including updated amenities and pre-built suites.
381 Park Avenue South is 17 stories and 244,000 square feet; 373 Park Avenue South is 12 stories and 112,000 square feet.
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