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480 Broadway. Image courtesy of KPG Funds
KPG Funds has closed on a three-year, $50 million construction loan for the renovation and repositioning of 40 Crosby, a 70,000-square-foot office building located at 480 Broadway St. in Manhattan’s SoHo neighborhood.
KPG Funds intends to rebrand the property as The Crosby and reposition it as a boutique luxury office building. Sabal Investment Holdings and GDS Brightstar, the lending-focused arm of GDSNY, provided the financing. Newmark brokered the transaction on behalf of the borrower.
The Crosby, up close
The entrance at 40 Crosby Street. Image courtesy of KPG Funds
Also known as 480 Broadway, 40 Crosby initially came online in 1873 as a mixed-use building featuring mainly retail spaces. KPG purchased the asset in January 2022 for $17.1 million, in a joint venture with LaSalle Global Partner Solutions from Vornado Realty Trust. That sale was subject to a $15.7 million loan, originated by Pacific Premier Bank, according to CommercialEdge information.
After repositioning completion, The Crosby will include three floors of luxury office space totaling 34,229 square feet, in addition to retail areas on the building’s ground and lower levels that total 18,000 square feet, expandable up to 23,000 square feet. Newmark will oversee leasing at the building’s office space, while RIPCO Real Estate will do the same for the retail element.
A dedicated entrance on Crosby Street and the revival of the building’s historic cast-iron façade will be some of the planned exterior upgrades. The building’s office component will have floorplates averaging 11,400 square feet, that will feature open workstations and private conference rooms. The three office floors, each including new internet, security and building management systems as well as new HVAC installations, will be connected through high-speed elevators.
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An office floor at The Crosby. Image courtesy of KPG Funds
With dual access to both Crosby Street and Broadway, The Crosby will have direct access to many of SoHo’s boutique retail and dining space and is less than a quarter mile from local and express Subway lines. Midtown is 3 miles north, while the financial district is 1.2 miles away.
Newmark Executive Managing Director Nick Scribani, together with Co-Presidents of Debt & Structured Finance Dustin Stolly and Jordan Roeschlaub, represented KPG.
Office renovations, in high demand
Office space repositioning in the Big Apple has been the motivation of many lease renewals, particularly as the city struggles with a lagging development pipeline and slowed transaction volumes.
In one of the largest lease extensions of the first quarter, Fox Corp. and News Corp. signed two long-term renewals totaling nearly 1.2 million square feet at Ivanhoé Cambridge’s 1211 Avenue of the Americas in Midtown Manhattan. The owner intends to debut a capital improvement plan at the 1.9 million-square-foot property in late 2023.
A recent lease involving renovated space was ESPRIT’s commitment to 38,000 square feet at 10 Hudson Square. The property had undergone various upgrades that were designed by Gertler & Wente.
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