Rags go to Riches
01.02.2013 | New York Post

Rags go to Riches

Reflecting rising values in what some people still call the Garment District, 256 W. 38th St. has sold for $48.6 million a mere 18 months since it last traded for $30 million — a jump from $250 to $400 per square foot.

In the Studley-brokered deal, American Realty Capital New York Recovery REIT Inc. bought the 118,200 square-foot building from a joint venture of East End Capital and GreenOak Real Estate.

The JV had upgraded the 1924-vintage property with improvements to the lobby, elevators, HVAC, façade and windows.

They helped lure anchor office tenant Cache Inc., the publicly traded women’s-wear retailer, which took three floors last spring.

Studley Capital Transaction Group Senior Managing Director Will Silverman noted that the zone immediately south of Times Square “is becoming a favorite market among tenants and investors,” as it “is steadily transforming from fashion to a diversified mix of industries including tech, media, finance and professional services.”

East End Capital managing principal David Peretz said the building was “both capital-starved and operationally distressed” when the JV bought it in 2001. The new owners raised occupancy to nearly 90 percent and more than doubled the property’s net operating income.

Former apparel factories like 256 W. 38th St., with their weathered brick facades that evoke a lost industrial age, are sentimental favorites of Realty Check. Our first job in the city was on West 36th Street between Eighth and Ninth avenues in the early 1970s.

We’re always glad to see them given new life by enlightened owners.