As the Garment District gets ready to lure more office tenants, East End Capital is teaming up with a longtime landlord to upgrade and modernize a $120 million portfolio concentrated in the neighborhood.
Jonathan Yormak and David Peretz’s investment-and-management firm bought a minority stake in the three buildings – which span more than 225,000 square feet in the Garment District and Gramercy – from the estate of investor Steven Green, representatives told The Real Deal.
East End will manage the process of improving and repositioning the buildings on behalf of the Ungar family, which retains its majority ownership.
JLL’s Jonathan Schwartz, who worked on the brokerage team hired to recapitalize the properties, said East End is “perhaps one of the most qualified operating managers to reposition these underperforming assets and execute the proposed business plan” with the owners.
Schwartz worked alongside his colleagues Aaron Appel, Mark Fisher Matt Collins Patrick Cotter to put the joint-venture together and arrange the debt.
LoanCore Capital – the Greenwich, Connecticut-based asset manager owned by Singapore sovereign wealth fund GIC and the Canada Pension Plan Investment Board – provided the owners with a $95 million, three-year floating-rate loan to finance the acquisition and repositioning.
Two of the buildings sit in the Garment District, which is primed for more investment after the City Council on Thursday voted to lift restrictions that required landlords to rent a certain portion of space to manufacturing tenants.
The largest of the properties is 251 West 39th Street, a 17-story, 117,500-square-foot building in the tiered and set back “wedding cake” style that characterizes much of the neighborhood. Just around the corner, another of the buildings, 580 Eighth Avenue, stands 20 stories tall and spans more than 74,000 square feet. The final property is 36 East 20th Street, an eight-story tall building spanning 35,000 square feet in between Park Avenue South and Broadway.
The Plaza District-based East End has repositioned other buildings in the area including 256 West 38th Street, which it bought in 2011 for $30 million and sold a year later to American Realty Capital for $48.6 million.
In late 2012, the company bought 321 West 44th Street from Kushner Companies for $92.5 million and sold it two years later for $165 million to Japanese investor Jowa Holdings.
East End is reportedly buying the building back at a discount to the 2015 sale price.
Elsewhere, the company is teaming up with Greg Kraut’s K Property Group to redevelop the site of the Sunshine Cinema on the Lower East Side into a boutique office building.