After owning nearly half of a trophy office tower in Midtown Manhattan for almost one year, a joint venture between HSBC Alternative Investments Limited (HAIL) and EDGE Fund Advisors has purchased the remaining ownership stake in 1540 Broadway for $423.5 million. According to announcements from both firms, the alternative investment arm of HSBC and the Washington, DC-based real estate investment management firm acquired the remaining 51 percent ownership interest from Richard Ellis.
HAIL and EDGE now fully own the 907,000-square-foot Times Square property. According to Mark Keller, chief executive officer of EDGE, the entire building was acquired for a total of $678.5 million, or roughly $748 per square foot. Sources familiar with the situation pointed out that the joint venture purchased the original 49 percent ownership interest in November 2010 for $255 million. In conjunction with the latest acquisition, the joint venture refinanced the property with MetLife.
HAIL and EDGE acquired the remaining stake in the 44-storey property on behalf of the HSBC Club Programme in an off-market transaction. HSBC's Club Programme also owns 1625 I Street and 1350 I Street in Washington DC.
“Since founding the HSBC Club Programme two years ago, we have acquired over one billion dollars in trophy office properties in the US,” said HAIL chief executive Christopher Allen in a statement. Keller noted that the building marks EDGE's “first major investment in the New York office market.”
Known as the Bertelsmann Building, 1540 Broadway is 92 percent occupied, according to data provider Real Capital Analytics. Tenants include Viacom International, Yahoo! and Chinese media giant Xinhua News Agency.