Olmstead Properties Acquires Two Flatiron Office Properties in $104M Deal

Olmstead Properties has purchased two Flatiron District office buildings from ATCO Properties & Management for $104 million, Commercial Observer can first report. 

The deals to buy 373 Park Avenue South and 381 Park Avenue South — which included roughly $82 million in total acquisition financing from Bank of New York, according to sources familiar with the deal — closed Wednesday night and marked Olmstead’s first acquisitions since 2016. 

“These buildings are our bread-and-butter type of asset class,” said Steven Marvin, executive managing director at Olmstead Properties. “These buildings allow for what we do best in taking spaces that aren’t being built in the marketplace and putting out space to the market that isn’t being addressed. We see tremendous upside here.”

Adam Spies, Adam Doneger, Josh King, Marcella Fasulo and Meaghan Philbin of Newmark brokered the sale. Empire Capital is keeping a minority stake in the properties. 

Both 373 and 381 Park Avenue South sit between East 26th and East 27th Street, a block east of Madison Square Park and about six blocks northeast of the landmark Flatiron Building.

The acquisitions coincide with the launch of a new office investment platform called Vertex. 

Co-founded by Adam Arnow, acquisitions manager at Olmstead, and Patrick Pavone, the firm’s managing director of acquisitions, Vertex is backed by the Rosenblatt and Arnow families — titans in the New York City real estate game — and is meant to uncover strategic office property deals around the five boroughs. 

“About two years ago, we started to see leasing fundamentals coming back a little bit, and asking if we should  be looking to do acquisitions,” Pavone said. “Sales pricing was very low, and a lot of names that you would never think you’d see in the news were giving back buildings. So, we started studying the market, re-engaging with the market, and then we spent the last 18 months to two years gearing up to go on a buying spree.” 

Pavone said Olmstead is close to closing on another acquisition, but couldn’t give more details than that. As for the properties at 373 Park Avenue South and 381 Park Avenue South, the firm plans to renovate the lobbies, elevator cabs, common areas and bathrooms. Olmstead has started working with COOKFOX Architects on these renovations and on some prebuilt spaces in both buildings. 

ATCO Properties chalked the sale of the two properties up to the right timing and the right market conditions. 

“Exceptional demand from savvy investors, combined with favorable market timing, made this the ideal moment to complete this transaction,” Kate Hemmerdinger Goodman, co-president of ATCO Properties, said in a statement announcing the sale. “Our family’s century-long stewardship of ATCO Properties, which now spans four generations, has instilled in us the value of portfolio discipline and strategic agility.”

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.