Thor Equities is in contract to sell 129 West 29th Street for $54 million to Samson Management, a real estate investment company based in Rego Park, Queens.
Arnold Goldstein, a principal at the firm, confirmed the sale in a call this afternoon with The Commercial Observer.
“So are you going to ask me why I overpaid for the property?” Mr. Goldstein joked.
Mr. Goldstein was remarking on the razor thin four percent cap rate his firm is buying into at the nearly 100,000-square-foot property.
“It’s just incredibly hard to buy quality real estate in Manhattan right now,” Mr. Goldstein mused. “Residential is almost prohibitive and commercial, everyone wants it, not just everyone in the city or the country, but the entire world so it’s very competitive and you have to stretch.”
Samson plans to hold the building long term Mr. Goldstein said and did the pricey deal because it believes the neighborhood will continue to strengthen. 129 West 29th Street, which sits between Sixth and Seventh Avenue, is at the juncture of several prominent areas, including Midtown South and the district surrounding the city’s busiest transit hub, Penn Station.
“We have property in Midtown South and the rents are skyrocketing,” Mr. Goldstein said. “129 West 29th Street isn’t exactly in Midtown South but if someone wants to be close we think they’ll pay a decent amount.”
Mr. Goldstein said that the building’s 6,000-square-foot ground floor retail space is vacant as well as two office floors, which are about 8,000 square feet in size apiece. He said maintenance work is currently underway on the building’s facade and that sidewalk sheds have been erected at the base of the property, making it difficult to lease the retail until they’re removed. But that work will be done by the end of the year and Mr. Goldstein said he expects to market and fill the space then.
“Leasing the retail would bring us to a five cap,” he said.
An investment sales team from the real estate services firm Jones Lang LaSalle led by JLL vice chairman Richard Baxter handled the sale for Thor. Mr. Baxter couldn’t be reached for comment on the deal.