Now that his firm's acquisition of 315 Park Avenue South has officially closed, BCN Development CEO Craig Nassi says that his firm is planning to further expand its holdings in the thriving Manhattan office market.
"The New York City office market is absolutely phenomenal," Nassi told CPN this morning. "It's better than anywhere in the country, and we're looking for the best markets to be in."
In March, Nassi's Denver-based firm announced plans to make its first major foray into Manhattan, agreeing to purchase 315 Park Avenue South--a 21-story, 333,000-square-foot office building (pictured) located in Midtown--in an off-market transaction, for a purchase price reportedly somewhere north of $265 million. Credit Suisse First Boston is the property's major tenant, occupying some 82 percent of the building's space, and Nassi identified the banking firm's tenancy as a major asset, characterizing Credit Suisse's lease as "good as gold."
With the purchase of 315 Park now closed, BCN will now turn its attention to making other investments in Manhattan. The firm currently has four other Gotham properties under contract for acquisition. "There's such a tightness in the market right now that any good square footage in good buildings is absorbed as soon as it's put on the market," Nassi said. "So that makes for very profitable office product."
And with little space available for new construction, Nassi said he expects the value of existing office stock to continue to climb. "Under our calculations, we expect to see a 12 to 15 percent annual rise in rents in Midtown," he noted, adding that BCN was looking to acquire space all over the borough, not just in that submarket. "We're looking for office deals throughout Manhattan. One of the deals we have under contract is for approximately 1 million square feet of office near Wall Street," he said, noting that as the Midtown market continues to tighten, tenants will increasingly be pushed to look for space in other Manhattan submarkets.
By Adam Perrotta, CPN News Writer (link)