Part of the equity for Chelsea’s massive Terminal Stores deal will likely come from the California State Teachers’ Retirement System.
The fund is expected to provide at least $100 million of equity for the purchase, according to Bloomberg. A unit of JPMorgan Chase is representing the fund, which will partner with L&L Holding Co. on the deal.
L&L and Normandy Real Estate Partners bought Terminal Stores from GreenOak Real Estate for about $900 million earlier this summer, which was triple the last valuation of the building. However, Normandy is not part of the joint venture between CalSTRS and L&L.
The companies plan to convert the warehouse into office space and revamp its interiors.
A report from CalSTRS said it allocated up to $500 million to a fund administered by JPMorgan last year. The fund makes fairly conservative investments with low returns.
1stdibs.com, an online marketplace for high-end interior design, recently signed a four-year sublease for more than 40,000 square feet at the Terminal Stores building. Other building tenants include Uber and L’Oréal USA.
Brokers previously told The Real Deal that they believe the investments ales market in Chelsea will remain active, but they do not think enormous deals like the one for Terminal Stores or Google’s $2.4 billion purchase of Chelsea Market will become the neighborhood’s new normal. [Bloomberg] – Eddie Small