1375 Broadway goes for $263 psf

Private equity firm Savanna has picked up the Garment District’s 1375 Broadway for $135 million in one of the cheapest per-square-foot New York City office transfers of the year, according to the Wall Street Journal. At 513,000 square feet, the price for the 37th Street property works out to a bargain $263 per square foot, but perhaps for good reason: the building is need of renovations to its façade, lobby and common spaces, and combined with leasing costs, those improvements are expected to put the new owners out by at least $20 million. It is currently 90 percent leased at an average of $20 per square foot, but half of those leases are set to expire in the next five years, after which Savanna hopes to hike up the rent to be more in line with the high $30s-per-square-foot that other Midtown South properties currently command. The sellers were Chedward Realty, which owned the land, and Statecourt Enterprises, which had a long-term ground lease that brokers say may have been a deterrent for other potential buyers of the building. Savanna acquired both the land and the lease in its fourth Manhattan office purchase this year. [WSJ]