Pembrook Capital Management has agreed to sell 511 West 25th Street, a 195,000-square-foot art gallery/office property in New York, to an undisclosed private equity fund for $93 million. The New York-based real estate investment manager – headed by Stuart Boesky, the former chief executive of CharterMac, now known as Centerline Capital – declined to name the buyer. However, according to Real Capital Analytics, the property is being purchased by a fund managed by The Related Companies. The deal is expected to close in the first quarter of 2012.
Pembrook, which provides capital to real estate developers and owners through the origination or acquisition of debt and preferred equity, originated a $12.75 million mezzanine loan on the property to a joint venture between Cardinal Real Estate Investments and Halcyon Real Estate Investors in January 2008. The El Segundo, California-based owners, which acquired 511 West 25th Street for $48.8 million, had intended to reposition the three-building complex into office, retail and art gallery condominiums, but sales suffered as the housing market took a nosedive. The property went into foreclosure in March 2010, and Pembrook, which had already been running the property since 2009, took ownership of the asset two months later.
As owner, Pembrook completed a number of capital improvements to the complex and doubled the occupancy at 511 West 25th Street from about 45 percent to approximately 90 percent. In rebranding the property, the firm also upgraded the tenant base to include Tesla, IMG, CD Networks and Workspaces and raised rents from around $35 per square foot to close to $50 per square foot.
The Related Companies could not be reached for comment at press time.