DivcoWest Pays $135M for Lower Manhattan Asset

325 Hudson. Image courtesy of DivcoWest

DivcoWest has purchased a 220,000-square-foot, 10-story building within the heart of Lower Manhattan’s Hudson Square neighborhood. Jamestown Properties pocketed $135 million for the flex office asset, according to the New York Business Journal. This was one of the few notable transactions in New York City’s slow office market, which is still recovering from pandemic-induced volatility.

The property at 325 Hudson St. sits at the corner of Vandam and Hudson streets, and is surrounded by Google’s New York offices on three sides. The building is adjacent to The Walt Disney Co.’s upcoming 1.2 million-square-foot, Skidmore, Owings & Merrill-designed headquarters. Dubbed Four Hudson Square and developed in a joint venture with Silverstein Properties, the full-block offices at 137 Varick St. are currently under construction.

The building is situated atop the fiber-dense Hudson corridor, boasting cost-effective data connections. The property has four elevators, conference rooms, a 10,000-square-foot data center and more than 8,000 square feet of retail space. The tenant roster includes coworking operator Industrious, SUNY Empire State College and production company Embassy Row. According to DivcoWest, the firm is aiming to attract tenants across the media, life sciences and office sectors.

Manhattan’s history-rich properties

Built in the 1960s as an industrial property and converted into offices in 1998, 325 Hudson St. was purchased by Jamestown in 2012 for $110 million, according to CommercialEdge data. Jamestown’s Manhattan portfolio also includes the One Times Square building, originally built to serve as the headquarters of The New York Times. The 26-story, 363-foot iconic skyscraper was completed in 1904.

Since it was founded in 1993, DivcoWest has acquired roughly 50 million square feet of commercial space, with the company entering the Manhattan office market in late 2018, when it acquired 311 W. 43rd St., a 185,000-square-foot midrise in Hell’s Kitchen. In the following year, the firm expanded its New York City presence with the purchase of 540 Madison Ave., a 283,700-square-foot, 39-story tower in the Plaza District. The high-rise later traded for $310.3 million.