Vanbarton Group Acquires 425 Lexington Avenue in New York, NY
NEW YORK, New York (October 25, 2018) – Vanbarton Group LLC has acquired 425 Lexington Avenue in New York, NY, a 750K square foot Class A office building located in the heart of the Grand Central submarket.
Built-in 1987 by Olympia and York, 425 Lexington is 95% occupied to strong credit tenancy, one of which has used the Property as its global headquarters since the building’s development. The Property presents an opportunity to capitalize on long-term leases to credit tenants, leading to a compelling cash-on-cash yield over the investment hold period while enjoying the dynamic development of the Grand Central submarket highlighted by the soon to be completed 1 Vanderbilt and the East Side rezoning initiative.
The Property is ideally located across from Grand Central Terminal, which services over 850K daily riders, and is undergoing a $220MM renovation project and the $11 billion East Side Access project that will connect the Long Island Rail Road to Grand Central. The City’s plan to convert East 43rd Street between Lexington and Third Avenue into a “shared street” will further benefit the Property.
Additionally, the Midtown East rezoning increased the FAR range from 18.0x to 27.0x, providing the opportunity for Vanbarton to purchase unused air rights from adjacent buildings for potential future redevelopments. The rezoning will reduce the challenges for the redevelopment of outdated buildings in the submarket and will ultimately upgrade the area’s transit network and pedestrian realm by requiring owners to contribute capital to infrastructure. The rezoning of the submarket should change development prospects in an area that has experienced little development over the last 20 years.
Since the beginning of the year, Vanbarton has acquired five equity investments: 990 Avenue of the Americas and 305 West 46th Street in New York; 101 Mission Street in San Francisco; and 6725 Sunset Boulevard in Los Angeles and, most recently, The Fifty Five Fifty in Los Angeles. With the acquisition of 425 Lexington, Vanbarton owns almost 8.0 MM SF of office, multifamily, retail and hospitality equity and credit investments throughout New York, San Francisco, Los Angeles and Chicago.
About Vanbarton
Vanbarton Group is a privately owned, vertically integrated real estate investment and advisory firm founded in 1992 with corporate offices in New York City and San Francisco. With its proven expertise successfully investing across the capital stack in varying ways throughout real estate cycles, Vanbarton’s investments include core, value-to-core and value-add equity investments, preferred equity, junior participations, bridge loans, secondary market debt acquisitions and securitized credit.