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Marx scoops up two Bowery buildings for $48.50M
REAL ESTATE WEEKLY
By: Kyle Campbell September 4, 2018
Marx Realty has purchased a pair of Bowery office buildings from a joint venture for $48.5 million.
The New York-based landlord and developer bought 135 and 161 Bowery from a partnership consisting of Caspi Development, RWN Real Estate Partners and Artemis Real Estate Partners. Ultimate Realty was also part of the group that sold 161 Bowery.
James Nelson’s Tri-State Investment Sales Group at Avison Young represented all sides in both transactions.
“This sale demonstrates that, with the right product and location, there is still strong demand in the marketplace,” Nelson, a principal at the real estate firm, said. “We were able to identify a well-established purchaser who utilized a 1031 tax-free exchange, and orchestrate a very smooth and easy process with real professionals on both sides of the table.”
135 Bowery was built in 2016 and features several tech tenants.
Totaling 48,000 s/f, the two buildings are fully leased and include a variety of tech-centric office tenants as well as ground-floor retail. The acquisitions bring Marx Realty’s commercial real estate portfolio to 4.3 million s/f.
Marx Realty CEO Craig Deitelzweig said he was drawn to the “vibrant” energy of The Bowery as well as the surrounding areas, which includes the Lower East Side, NoLita, the East Village and the various bars, restaurants and museums in each.
Deitelzweig also saw an opportunity to add value to his company’s portfolio with the two recently-improved properties.
“Both buildings are architecturally significant and are located one block away from each other in the very dynamic Bowery neighborhood,” he said. “The constructed office space in both properties has broad appeal to tenants across a variety of business sectors and we are delighted to have 135 and 161 Bowery join the Marx Realty portfolio of best-in-class office assets in premier locations.”
Standing eight stories tall with a total of 23,000 s/f, 135 Bowery was built in 2016 and includes high-speed wireless connectivity as well as two private terraces. Tenants include Lola, a visual effects company; Minds + Assembly, a creative agency; Tradewind, a tech trading firm and the law firm of Martin Liu & Associates.
The other building, 161 Bowery, was built in 1920 and remodeled in 2016. It is seven stories tall with 25,000 s/f, 12-foot ceilings, open floorplates and fiber-optic Ethernet. Tenants include Warner Music; Kik Interactive, a social media company; Space 150, an advertising firm; Brainly, an educational startup and Mark Fisher Fitness on the ground floor.
“The current tenants at both properties are a testament to the neighborhood’s continuous growth and exciting future,” Deitelzweig said. “The acquisition once again reinforces our ability to transact quickly and efficiently, further expanding our presence in Manhattan. We’re excited to bring new life and energy to 135 and 161 Bowery.”
Marx Realty Purchases Two Mixed-Use Properties in Manhattan for $48.5M
REBUSINESS ONLINE
Posted on September 5, 2018 by David Cohen in Acquisitions, Mixed-Use, New York, Northeast
NEW YORK CITY — Marx Realty has purchased two mixed-use properties on the Lower East Side of Manhattan for $48.5 million. Located at 135 and 161 Bowery, the two properties include 48,000 square feet of office and retail space combined. Built in 2016, 135 Bowery is an eight-story building that includes street-level retail and office space on floors two through eight. The building is fully leased to a tenant roster that includes visual effects company Lola, creative agency Minds + Assembly, trading technology firm Tradewind and attorneys Martin Liu & Associates. Originally built in 1920 and redeveloped in 2016, the seven-story building at 161 Bowery also includes street-level retail and office space. Tenants at the fully leased building include Warner Music, Kik Interactive, advertising firm Space 150, and educational startup Brainly. Artemis Real Estate Partners was the seller for 135 Bowery, while 161 Bowery was sold by a joint venture in partnership with Ultimate Realty.
New York-Based Marx Realty Buys Remainder of DC Office and Retail Building for $21M
THE FIFTH FLOOR OF 819 7TH STREET NW PHOTO: MARX REALTY
COMMERCIAL OBSERVER
BY CHRISTINA STURDIVANT-SANI SEPTEMBER 6, 2018 11:56 AM
After two years of acquiring floors in the building, New York-based Marx Realty now owns the entire office and retail property at 819 7th Street NW in Washington, D.C.’s East End neighborhood, Commercial Observer has learned.
Including the floors it already nabbed, the building cost the real estate management and development firm $21.2 million, according to a press release from Marx.
The most recent purchase—the fifth floor and mezzanine level—closed in August 2018 for $5.1 million, a Marx spokeswoman told CO. The seller of the two floors was Allegro Holdings, which could not be reached for comment. There were no brokers involved in the deal.
Built in 1890, the 21,000-square-foot property includes a basement, ground-floor retail, four floors of office space, a mezzanine level and a rooftop terrace. It features 12- to 15-foot ceilings, exposed wooden beams and “a loft-like feel that is unusual for offices in the D.C. metro market,” according to the release. In 1999, the building underwent a condominium conversion. It is currently anchored by the U.S. headquarters of Nando’s Peri-Peri restaurant, which occupies 3,600 square feet of office space on the second floor and 4,500 square feet of ground-level retail space, per the release. Marx did not return CO’s request for comment regarding the building’s current occupancy rate.
“The East End neighborhood has an energy unlike any other area in D.C. and continues to be an extremely popular location for businesses in and around the District,” Marx President and CEO Craig Deitelzweig said in a prepared statement. “And, as newly constructed office buildings saturate the market in the central business district, we are seeing an uptick in demand for loft-style space that offers a boutique experience with all the trappings of modern-day offices.”
In June 2016, Marx bought the ground level and second floors for $9.6 million from ALSU Investments and Tenoff, according to the Marx spokeswoman. In January 2018, the firm picked up the third and fourth floors from Seventh Street Partners for $6.5 million.
Deitelzweig said that the firm plans to bring “first-class management service” to attract a wide range of creative tenants.
Crossing Delancey: Two LES Buildings Sell for $48.5 Million
135 – 161 Bowery, the Lower East Side of Manhattan
Marx Realty’s purchase of Lower East Side buildings at 135 and 161 Bowery demonstrates a continued demand in the neighborhood by creative and tech industry tenants.
NEW YORK CITY—“Crossing Delancey” is a nostalgic cinematic look at the Lower East Side, now undergoing rapid changes.
Marx Realty, a division of Merchants’ National Properties, bought two Lower East Side office and retail properties, located at 135 and 161 Bowery St. for $48.5 million. A joint venture of Caspi Development, RWN Real Estate Partners and Artemis Real Estate Partners sold 135 Bowery. The same joint venture with Ultimate Realty sold 161 Bowery.
Craig Deitelzweig, president and CEO of Marx Realty, describes both properties in a vibrant neighborhood as a perfect fit for the real estate firm’s growth strategy, and an opportunity to add value to their portfolio.
The transaction represents Marx Realty’s continued expansion in New York, building on its 4.3 million square-foot commercial real estate portfolio.
“Both buildings are architecturally significant and are located one block away from each other in the very dynamic Bowery neighborhood,” says Deitelzweig. “The constructed office space in both properties has broad appeal to tenants across a variety of business sectors.”
Avison Young was the sole broker with James Nelson, principal and head of tri-state investment sales, leading the sale negotiations. “This sale demonstrates that, with the right product and location, there is still strong demand in the marketplace,” says Nelson. “We were able to identify a well-established purchaser who utilized a 1031 tax-free exchange, and orchestrate a very smooth and easy process with real professionals on both sides of the table.”
Built in 2016, 135 Bowery is located between Grand and Broome streets. The modern, eight-story building with 23,000 square feet of space includes street-level retail and offices on the second through eighth floors. The building is currently fully leased. Its tenants include visual effects company Lola, creative agency Minds + Assembly, trading technology firm Tradewind, and attorneys Martin Liu & Associates. In September 2015, it was sold to the joint venture by First American International for $16.1 million.
Originally constructed in 1920 and redeveloped in 2016, 161 Bowery is between Broome and Delancey streets. The seven-floor building also includes street-level retail and office spaces distributed over 25,000 square feet. Also fully leased, this building’s tenants include Warner Music, social media giant Kik Interactive, advertising firm Space 150, multinational educational startup Brainly and Mark Fisher Fitness on the ground floor. In May 2014, 161 Bowery LLC sold this building to the joint venture for $12.8 million.
From the last sales within the past five years the two properties together recently sold for an increased value of $19.6 million. The sales prices were recorded in Real Capital Analytics.
Deitelzweig notes the Lower East Side neighborhood has attracted the art, music, fashion and media industry for decades. Now even more creative and tech firms are “Crossing Delancey.” “The current tenants at both properties are a testament to the neighborhood’s continuous growth and exciting future,” he says.
Marx Realty snatches up two LES office buildings for $48.5M
Marx Realty’s Craig Deitelzweig and 135 and 161 Bowery
The Real Deal New York
By Erin Hudson | September 04, 2018 08:30AM
Caspi Development and its partners sold two Bowery office buildings to national developer and landlord Marx Realty for a combined total of $48.5 million.
The properties are located one block away from one another at 135 and 161 Bowery on the Lower East Side and were owned by a joint venture including Caspi, RWN Real Estate Partners and Artemis Real Estate Partners. A fourth company, Ultimate Realty, had a stake in 161 Bowery.
The owners acquired 161 Bowery for $12.75 million in 2014 and 135 Bowery for $16.2 million one year later. The partners netted about $19.5 million by selling the office buildings to Marx Realty.
As The Real Deal reported in 2015, the lead developer’s principal Joshua Caspi aimed to transform the LES strip into an office market focused on tech tenants. The ownership teams of both 135 and 161 Bowery undertook gut renovations of the properties and signed leases with tenants including social media company Kik Interactive, Warner Music, trading technology firm Tradewind and visual effects company Lola.
Avison Young’s Tri-State Investment Sales Group, led by James Nelson, brokered the deal. Nelson said Joshua Caspi was the main point of contact on the owners’ side for both properties.
Nelson said the now that the partners completed their plans for the Bowery buildings, “they’re looking for notably heavy construction projects where they can get in, do a gut rehab, improve, sell and then move on.”
Caspi Development did not immediately respond to TRD’s request for comment. When reached by phone, Joshua Caspi said “That’s all correct except the sell part… I’m not a seller of anything usually… We rarely sell, however one of the partners is [on] a seven-year life span [cycle].”
He identified Artemis as the partner he was referring to but added that the ownership team “collectively saw it as a good price point to sell in the market.” Caspi noted that, with RNW, his company is continuing their “very specific conversion program for boutique office buildings” with new properties in Tribeca and Williamsburg.
The Bowery deal was put in motion when Nelson identified Marx as a potential buyer after the company sold a retail complex in Louisville, Kentucky and was looking for new property in order to complete a 1031 tax-free exchange.
Marx is a division of Merchants National Properties and has a commercial portfolio that spans 4.3 million square feet nationally. President Craig Deitelzweig said the deal represented “a perfect fit for our growth strategy” to increase the company’s footprint in New York and that Marx was looking for more properties to snap up along the Bowery and in LES more broadly.
“We just think it has great upside potential and the reason for that is there’s not that much supply of office properties in that market,” he explained. “People really want to be there.”
Since the deal went into contract, Deitelzweig said Marx has brought aboard one new tenant — Warner’s recently-acquired entertainment and pop culture website UPROXX — at a rent “in the $70s [per square foot]” range. He said the buildings’ current average hovers around the mid-$60s.
Deitelzweig said Marx plans to renovate both lobbies with the hope of raising rents in the office buildings by $10 per square foot. He said both properties are fully-leased.
The Bowery sale is the second multi-property deal for Avison Young’s nascent investment sales group with Nelson at the helm. The broker left Cushman & Wakefield in January to build the now six-month-old team in the Canadian company’s New York office. Nelson’s group’s first deal was the sale of three office condominiums at 420 Fifth Avenue for $54 million.
Luckey Climber coming to Yonkers’ Cross County Shopping Center
YONKERS – The Cross County Shopping Center will renovate its children’s play area and install a Luckey Climber.
On Tuesday the mall’s owners and city officials unveiled the design for the $350,000 makeover of the play area near the Chipotle restaurant.
Luckey Climbers are artfully designed climbing structures for children built by a New Haven-based company of the same name. The climbers have been installed in shopping centers and museums nationwide, including The Franklin Institute in Philadelphia and the Liberty Science Center in Jersey City.
“We’re always looking for new ways to make the center more dynamic, more vibrant for the residents of Yonkers and for all of Westchester County,” said Craig Deitelzweig, executive vice-president of Brooks Shopping Centers, which operates the mall. “Our true hope is that special memories will be made here that will last a lifetime.”
The 16-foot high climber looks like water lily pads stacked atop each other on arched metal posts that are surrounded by netting and covered by a canopy. Spencer Luckey attended the design unveiling and he said the concept behind his company’s climbers is to stimulate children’s and adults’ imaginations.
“Kids are much more sophisticated than we ever give them credit for and they really appreciate quality,” said Luckey, adding that his climbers are designed to be visually pleasing. “If it has some sort of aesthetic shortcomings it becomes almost a liability for a place like a mall or a public institution, they can’t just put anything in their town square.”
Access to the mall’s play area has been restricted and the old equipment has been removed. Mall officials said construction is expected to begin in a few weeks and the renovation is expected to be completed by late fall.
The renovation is the latest change at the mall. Earlier this summer the young-adult apparel retailer Hollister opened a new store there.
Restoring A 1930s Classic Meant Blending Past With Future
Forbes – July 30, 2018
By: Jeffrey Steele
When setting out to both preserve an 87-year-old Manhattan office building and also reimagine the structure for cutting-edge 21st Century tenants, it’s a safe bet daunting hurdles will be encountered. Unveiling something akin to a whole new concept in office buildings proved a challenge that required innovative vision on the part of Marx Realty, the company responsible for the reinvention of the Grand Central submarket trophy tower.
“We were seeking to create a completely new offering that does not yet exist in the marketplace,” says Craig Deitelzweig, president and CEO of Marx Realty. “Rather than being another building with an all-white marble-clad lobby that has been so common over the last few decades, we knew that 10 Grand Central should be warm, inviting and more reminiscent of a hotel in its character. Similarly, we wanted to embrace the building’s 1930s Ely Jacques Kahn heritage and yet be very modern. Balancing these contrasting objectives took a great amount of thoughtfulness in the design and lots of refining of the final product.”
The focus of all this attention is 10 Grand Central, 155 East 44th Street in Manhattan. Opened in 1931, the 35-story tower was designed by acclaimed architect Ely Jacque Kahn, best known for Bergdorf Goodman’s Fifth Avenue department store and the Seagram Building, on which Kahn collaborated with Ludwig Mies van der Rohe and Philip Johnson.
Marx Realty obtained archival photographs of the building from the 1930s, Deitelzweig says.
“We adapted a modern version of the original materials, and visited some of the finest hotels and private clubs to create the right hospitality feel. We also worked closely with and pushed our architects, who were fantastic — even though they probably were a bit tired of me saying ‘it has to be more special’ — to achieve a result that is truly transformational and memorable.”
The $45 million repositioning of the Beaux Arts-design building emphasizes dramatic design revisions, among them a resituated and recrafted entry portal soaring four stories in height. Also part of the redesign is a freshly delineated lobby, sumptuous lounge, well-appointed and landscaped open-air terrace and an expansive conference space. Pre-constructed suites offer upscale finishes and features previously unseen in this market.
“Warm walnut wood, concrete, brushed brass and velvet are used throughout the building’s full redesign,” Deitelzweig notes, adding the inspiration behind the redesign came from exclusive hotels and private clubs. “These elegant enhancements will return this classic, yet modern, tower to its rightful place among the elite Grand Central buildings.”
Lavish lobby
Studio Architecture, the firm Marx Realty chose to handle the redesign, repositioned the building entrance to 44th Street to deliver a decidedly Grand Central Terminal orientation.
The doorman-attended four-story entryway, combining a fascinating mixed-medium of gloss-block brick, brass and walnut, will open onto a meticulously-crafted new lobby noteworthy for its clean lines and up-to-date details, along with brushed brass and walnut accents. In keeping with the updating of a nearly nine-decade-old structure, the softly-lit setting is at once classic and contemporary, encircling a jewel box reception desk.
“This architecturally important tower has terrific bones and the infrastructure allows for the implementation of Marx Realty’s vision to create an upscale, exclusive vibe and undoubtedly unlock the value of this location,” says Studios Architecture Principal David Burns. “At the start of this project, few developers were showing the foresight to bring this kind of boutique hospitality feel to an office property. The grand entrance that transports visitors and tenants to an intimate lobby space is a perfect example of a forward-thinking developer anticipating the design elements that will have the greatest impact for tomorrow’s office users.”
Jeffrey Steele
Forbes Contributing Real Estate Writer
Upgrades for 10 Grand Central Spur Leasing Activity
Connect Media New York – July 30, 2018
By: Paul Bubny
Shortly after Marx Realty unveiled plans to reposition the 10 Grand Central office tower at 155 E. 44th St., the initiative has paid off in leasing activity. Benenson Capital Partners has extended its 15,000-square-foot lease, while White Oak Equity Partners is preparing to move into a 2,500-square-foot pre-built.
Additional new leases, expansions and extensions were signed with law firm Marks O’Neill; nonprofits TRNC, World Federalist Movement and CGB New York; financial consultancy PMC Treasury; and hedge fund research provider Global Source Partners. In all, Marx has inked 37,000 square feet of deals recently.
“These firms understand the value of investing in quality, high-end spaces and communal amenities,” said Marx CEO Craig Deitelzweig. “The location in the Grand Central submarket of Midtown is also a very attractive proposition for firms seeking a ‘prestige’ address to distinguish them from the pack.”
JLL’s Howard Hersch and Clark Finney are handling the leasing effort.
37,000 SF of Leases Signed at 10 Grand Central in Strong Response to Redevelopment and Hospitality-like Amenities
By: CityBizList – July 26, 2018
Real Estate Investment Firm Extends to 10-year term with 15,000 Square Feet; Private Equity Firm Moves into New Digs on 21st Floor; Law Firm Expands to Full 25th Floor
Marx Realty, a New York-based owner, developer and manager of office, retail and multifamily property across the United States, announced 37,000 square feet of new and extended leases at 10 Grand Central, located at 155 E. 44th St. in the Grand Central submarket. Topping the list of tenants is Benenson Capital Partners which extended its 15,000-square-foot lease with a 10-year term while White Oak Equity Partners is targeting early August to move into 2,500 square feet of pre-built office space at the 35-story building. The announcement was made by Craig Deitelzweig, CEO of Marx Realty.
“These firms understand the value of investing in quality, high-end spaces and communal amenities,” said Deitelzweig. “The location in the Grand Central submarket of Midtown is also a very attractive proposition for firms seeking a ‘prestige’ address to distinguish them from the pack.” Deitelzweig also points to the abundant natural light in the office suites throughout the building and private terraces on select suites as key differentiators at 10 Grand Central.
The terrace amenity at 10 Grand Central connects with the tenant lounge to create an indoor/outdoor experience where tenants can unwind, socialize and collaborate.
Marx Realty recently announced plans to invest $45 million in repositioning this asset to include a hospitality-style aesthetic and an intimate, boutique feel. Updates will include renovating and relocating the entryway and lobby and adding a seventh-floor lounge with a variety of seating configurations and a modern café space. The 5,000-square-foot lounge will connect to a 2,500-square-foot terrace — part of a suite of amenities available to tenants at 10 Grand Central — which will be outfitted with accents that harken back to the 1930s, when the building was originally constructed. A NanaWall system of windows will connect the terrace and the lounge to open the space as an indoor/outdoor experience. A 36-seat conference facility will also be added on the seventh floor.
“Current and prospective tenants are extremely enthusiastic about the updates and the terrific location,” said Deitelzweig. “The boutique aesthetic and the benefits of the on-site amenities have been incredibly well-received.” This building will be attended by a uniformed doorman at the entry, which is totally unique to office buildings and really punctuates the hospitality-like vibe, he adds.
A JLL team led by Howard Hersch and Clark Finney is handling the leasing effort.
This flurry of leasing activity comes as renovations kicked off in April with rents at, or near, the building’s asking rents of $78 per square foot in the high-rise tower suites, $75 per square foot in the mid-rise portion of the tower and $68 per square foot in the base. Additional new leases, expansions and extensions were signed with Marks O’Neill (law firm); TRNC (non-profit); PMC Treasury (financial consultancy); World Federalist Movement (non-profit); CGB New York (non-profit); and Global Source Partners (hedge fund research provider).
About Marx Realty
Marx Realty is a division of Merchants National Properties (MNP). Founded in 1915, its current portfolio of properties includes over 4.3 million square feet of commercial office, retail and residential space as well as five mixed-use projects currently under development. Together, MNP and Marx Realty are vertically integrated and involved in all phases of real estate management, development, and leasing. The company’s assets comprise 67 properties in 17 states across the continental United States.
What’s Old Is New: Renovations Coming To 10 Grand Central
Location and new amenities are cited as reasons why tenants recently leased and expanded at the Marx Realty Midtown property.
NEW YORK CITY—Benenson Capital Partners just extended its 15,000 square-foot lease with a 10-year term, occupying the 27th through 29th floors at 10 Grand Central. In addition, in August, White Oak Equity Partners is moving into 2,500 square feet of pre-built office space on the 21st floor, in the 35-story Midtown tower. Property owner, developer and manager Marx Realty recently leased office space totaling 37,000 square feet in the building located at 155 E. 44th St.
The building’s asking rents are $78 per square foot in the high-rise tower suites, $75 per square foot in the mid-rise portion of the tower and $68 per square foot in the base.
Since April other new leases, extensions and expansions were signed with law firm Marks O’Neill; non-profit TRNC; financial consultancy PMC Treasury; non-profit World Federalist Movement; non-profit CGB New York; and hedge fund research provider, Global Source Partners.
Marx Realty is investing $45 million in upgrades. The renovations will include relocating the entryway with a lobby, and on the seventh floor adding a 5,000 square-foot lounge with a 2,500 square-foot, landscaped terrace, cafe and conference facility. The building was originally designed by Ely Jacques Kahn and constructed in 1931. Kahn also designed Bergdorf Goodman’s Fifth Avenue department store and worked with Ludwig Mies van der Rohe and Philip Johnson on the Seagram Building.
10 Grand Central, terrace/ architectural rendering
The upgrades are inspired by the world’s finest hotels and private clubs, applying a modern twist to the building’s original Beaux Arts design aesthetic, according to Marx Realty president and CEO Craig Deitelzweig. “Warm walnut wood, concrete, brushed brass and velvet are used throughout the building’s full redesign. These elegant enhancements will return this classic, yet moderm tower to its rightful place among the elite Grand Central buildings,” he says.
David Burns, principal of Studios Architecture, is handling the redesign. It will also include a relocated four-story entryway with brushed brass fins, oversized black brickwork and walnut wood doors with a glass surround. The building address, which has been rebranded from 708 Third Ave. to 10 Grand Central, will be displayed with brushed brass lettering. The entry will be staffed by a uniformed doorman, adding to the full-service hospitality ambience.
Deitelzweig states the opulent finishes and contemporary feel will respect the history of the building while modernizing aesthetics, also accommodating today’s practical requirements.
“Current and prospective tenants are extremely enthusiastic about the updates and the terrific location,” he says. “The boutique aesthetic and the benefits of the on-site amenities have been incredibly well-received.”
A JLL team led by Howard Hersch and Clark Finney is representing Marx Realty in the leasing transactions.
