Midtown Building Next to NYC Amazon HQ Trades for $18M
By Andrew Coen July 1, 2024 12:37 pm
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Commercial real estate investor Behrooz Hedvat has acquired a 12-story Midtown Manhattan building next to Amazon (AMZN)’s new Manhattan headquarters for $18 million after the property hit the market for the first time in its 108-year history, property records show.
Hedvat purchased 16 West 39th Street from the Weatherley family, which owned the asset since it was built in 1916. The all-cash transaction closed June 26 and hit property records Monday morning.
The building, which has 55,000 rentable square feet, was master-leased for much of its history to retailer Lord & Taylor, which utilized it as storage space for women’s shoes. Lord & Taylor’s flagship store was formerly at adjacent 424 Fifth Avenue, which Amazon acquired in 2020 from WeWork for $978 million and now houses around 2,000 Amazon employees.
The transaction was brokered by a Colliers (CIGI) team of Zach Redding and Dylan Kane along with a B6 Real Estate Advisors team led by Alex Woodlief and Paul Massey. The brokerage firms announced the deal but did not disclose or confirm the buyer.
Colliers and B6 began marketing the property for sale in early 2023 with a $32 million asking price in hopes it would attract investors interested in transforming the building into a modern office asset that could lure technology companies, given its proximity to Amazon.
Redding told Commercial Observer that the buyer plans to renovate the property with new ground-floor retail space. He said the property should benefit from an office and leasing perspective by Amazon being its neighbor.
The building could also potentially get converted into residential housing in the future if New York City Mayor Eric Adams is able to achieve his Midtown rezoning proposal, according to Redding.
“The plan today is to keep it as office, but I think now that this is an option on the table. It’s something that I’m sure they’ll consider down the line if the rezoning actually passes,” Redding said.
Redding noted that Colliers recently completed nine sales of vacant commercial buildings in Manhattan to nontraditional CRE investors, a trend he said shows properties in prime locations that offer “the right strategy” will “continue to be highly sought after.”
“16 West 39th Street offered potential buyers the opportunity to acquire a vacant property prime for reposition, adjacent Amazon’s new New York tech headquarters, equidistant to Penn Station and Grand Central, and steps from Bryant Park,” Woodlief, senior director at B6, said in a statement. “This sale to a private investor signals confidence in the future of the office market in this neighborhood, and is evidence that on a select basis investors are still seeking value-add office in Midtown South.”
Hedvat did not immediately return a request for comment. He is president of Reflex Performance Resources, a global sourcing company that specializes in activewear, according to his Linkedin.
Andrew Coen can be reached at acoen@commercialobserver.com
