Northwood Investors Lands $227M Acquisition Financing for 2 SoHo Buildings
Northwood Investors has secured $227 million in acquisition financing for its purchase of two adjacent buildings at 520 and 524 Broadway in SoHo, Commercial Observer has learned.
Ares Commercial Real Estate provided the floating-rate loan, while Gideon Gil, Steve Kohn, Alex Hernandez and Lauren Kaufman of Cushman & Wakefield’s equity, debt and structured finance team negotiated the debt on behalf of Northwood, sources said.
Ares’ loan finances Northwood’s $325 million purchase of the 11-story office buildings, which comprise 240,000 square feet and have prime frontage on Broadway, Spring Street and Crosby Street.
Built in 1900, the building at 520 Broadway was designed in a classic SoHo loft style, while 524 Broadway was completed in 1902.
Today, the buildings are more than 93 percent leased. The building at 520 Broadway is anchored by Keith McNally’s ever-popular Balthazar restaurant. Clothing store Aritzia leases the retail space at 524 Broadway, while WeWork occupies the top five floors.
The sale of the property was first reported by The Wall Street Journal back in May. The Propp family had previously owned the buildings since 1987.
While a recent Real Estate Board of New York report showed that retail rents in SoHo are down 40 percent compared with 2019 — no big surprise, given that the pandemic brought a screeching halt to tourism as well as in-person shopping — a pandemic recovery is underway, even for the hardest hit areas.
“The retail market’s adjustments over the past year provide new windows of opportunity for the industry, from introducing new retailers to the market to the use of creative lease agreements and rent concessions,” REBNY President James Whelan said in a statement. “Now as COVID-19 restrictions ease and the City comes back to life, there is a real sense of optimism that we will see an accelerating recovery throughout the retail market in the coming months.”
REBNY also pointed to a return to office work as important to the retail market’s recovery.
C&W officials declined to comment. Officials at Northwood and Ares did not respond to requests for comment.