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Starwood grabs Garment District office tower from Lloyd Goldman

Barry Sternlicht’s Starwood Capital purchased the 21-story office tower at 1372 Broadway from Lloyd Goldman’s BLDG Management, the firm announced today. Terms of the deal were not disclosed, but published reports pegged the purchase price at $325 million. Goldman had acquired the building from SL Green Realty for $274 million in 2008.

Located at the corner of West 37th Street, the 571,667-square-foot building is fully occupied under long-term leases according to Starwood Capital.

“We believe this is an exceptional investment due to its high double-digit cash-on-cash returns on our fund equity over our anticipated hold period, supported by the length of the leases and credit of its tenants,” said Chris Graham, managing director of acquisitions at Starwood, in a statement. “Given the limited new construction in New York City, and in particular this key submarket, we expect to earn substantial upside on exit if rents increase over our hold period.”

The building had been home to a Walmart office, but the retailing giant shuttered the offices in October, four years after leasing the 46,000-square-foot space in the first place. Retail tenants in place include a jeweler, a kosher restaurant, a Starbucks and a GNC store, among others.

The purchase was made by Starwood’s Distressed Opportunity Fund IX. Previous reports indicated that New York Life partnered with Starwood on the deal.


Adam Fusfeld