REALM JV Buys Office Component at Midtown Tower

A partnership between REALM Group, DelShah Capital and A.M. Properties has acquired the 377,000-square-foot office component at CitySpire, a Class A, 70-story mixed-use tower in Midtown Manhattan. The property changed hands at an 8.5 percent cap rate.

In February, when the partnership entered the agreement to purchase the office segment of the property, the deal was valued at $135.7 million, or $360 per square foot, The Real Deal reported at the time. After nearly 22 years under its ownership, Tishman Speyer sold the office condominiums.

Completed in 1987, the high-rise consists of office space between the second and 23rd levels, while the rest of the floors are designated residential space, separately owned and operated.

The office component recently undergone a capital improvement program amounting to $22 million. Amenities include eight passenger elevators, common areas, a fitness center and subterranean parking. The tenant roster features Caleres, Windels Marx Lane & Mittendorf and New York Road Runners. The office property was 98 percent leased at the time of the deal.

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Located at 156 W. 56th St., the CitySpire tower is three blocks south of Central Park and across the street from Carnegie Hall and the subway station at the corner of 57th St. and Seventh Ave.

Manhattan’s office investment landscape

In the first four months of the year, Manhattan recorded $2.9 billion in office investment sales, with assets changing hands at an average price of $712 per square foot, according to the latest Yardi Matrix office report. Both metrics positioned the market above all others across the U.S., San Francisco and Dallas ranking second and third, with total investment figures of $1.6 billion and $1.1 billion, respectively.

Some of the largest recent deals across the borough include the sale of the office property at 40 W. 25th St., in the NoMad neighborhood, for $51 million. An entity associated with Kaufman Investment and Two Sigma purchased the asset at a 58 percent discount from the last time it changed hands. Additionally, CIM Group sold 88 University Place to Acram Group in March of this year, in a $46 million transaction.