Off-market value-add acquisition in West Chelsea; MRC to modernize property, renovate vacant units into high-end apartments
NEW YORK, Oct. 23, 2014 /PRNewswire/ — Madison Realty Capital (MRC), an institutionally backed real estate investment firm focused on real estate equity and debt investments in the middle markets, announced the purchase of 421 West 21st Street, a six-story multifamily elevator building located in the heart of the West Chelsea neighborhood of Manhattan.
The transaction exemplifies MRC's ability to identify value in an off-market setting and effectuate a successful transaction in a timely fashion. Located in one of the premiere markets in Manhattan (with land prices eclipsing $900 PSF), the property is uniquely situated with 65 feet of frontage on a quiet tree-lined block. The acquisition price reflects a significant discount relative to replacement cost in a market with positive trending fundamentals.
The 30,421 square-foot property, which contains 36 units, was originally constructed in 1950 and has been family-owned by the seller since 1995. The unit mix includes 11 large studios and 25 one-bedroom units, with eight units in the building currently vacant and an additional five leases for units set to expire within one year. MRC intends to pursue a comprehensive value oriented capital expenditure program in order to reposition and modernize the property, which includes renovating vacant units into high-end luxury units, enhancing the lobby, hallways and elevator, and improving the overall operating efficiency of the property.
Josh Zegen, Co-Founder and Managing Principal of MRC, made the announcement. "At a basis which is well below replacement cost, the transaction offers intrinsic long-term value with the opportunity to generate immediate results through proactive management. Given its desirable Manhattan residential location and excellent upside, this property is an ideal fit for MRC's investment platform," said Zegen. "This transaction aligns perfectly with our strategy of acquiring stable cash-flowing assets, but will still benefit from our track record of successfully repositioning and improving overall asset quality. We are pleased to add 421 West 21st Street to our portfolio, and look forward to executing our business plan for the property."
421 West 21st Street is situated in the heart of the West Chelsea neighborhood between 9th and 10th Avenues, only steps away from the vibrant Chelsea Gallery District and its hundreds of art galleries and artist studios. It also offers proximity to major subway lines, as well as other popular local neighborhood attractions including the High Line, Chelsea Market and Chelsea Piers.
About Madison Realty Capital (MRC)
MRC is a New York-based real estate investment firm that pursues real estate equity and debt investments in the middle market. Founded in 2004, MRC has invested in approximately $2.5 billion of transactions in the multifamily, retail, office and industrial sectors.
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