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1552 Broadway is a 15,000-square-foot retail property located in the heart of Times Square and is known as the I. Miller Building. In August of 2011, JLL closed the sale of the property on behalf of the Riese Organization, a real estate and restaurant management company. The four-story building was sold for $136.55 million in a joint venture to the real estate investment trust SL Green and Wharton Acquisitions, an investment firm specializing in urban retail.
In the past few years retail and signage rents in the Times Square area have appreciated significantly. The Riese Organization elected to capitalize on its investment and sell 1552 Broadway. In addition to the property’s prime retail location, the building had premium signage space across the facade and on its rooftop, including two existing static signs. The property was 100 percent occupied when it went on the market with one retail tenant on a portion of the ground floor and the remainder of the ground floor and three floors above occupied by the restaurant T.G.I. Friday’s. The Riese Organization operates the restaurant and was able to offer potential buyers a short-term leaseback.
JLL highlighted the tremendous retail redevelopment potential to attract major national or international retailers and enhance income further through conversion of static to LCD signage as well as the addition of a third sign above the existing signage. JLL’s marketing campaign targeted a broad range of investors, including retail investors, institutional investors, REITs active in New York and off-shore capital, as well as users.
JLL executed a broad marketing campaign and assembled all due diligence materials on a security-controlled website to allow bidders to remove contingencies. JLL registered more than 140 prospective purchasers. Multiple offers were generated. In a best and final round of bidding, JLL developed several improved, non-contingent offers submitted with mark-ups to the seller’s form purchase and sale agreement.
The Riese Organization selected the joint venture of SL Green and Wharton Acquisitions and quickly entered into a non-contingent contract. SL Green and Wharton Acquisitions purchased 1552 Broadway for $136.55 million. The Riese Organization entered into a short-term leaseback with the buyers, selling the property subject to a one-year occupancy arrangement. This provides the buyers near-term vacant possession for redevelopment to lease to a major retailer. SL Green is a REIT that is very active in the Manhattan commercial real estate market and Wharton Acquisitions is known for its expertise in New York City retail.
Following the purchase of 1552 Broadway, SL Green and Wharton Acquisitions entered into a 70-year lease at an adjacent building, 1560 Broadway, which gave them the option to combine the lower floors of 1552 and 1560 Broadway to create up to 49,000 square feet of contiguous retail space in the heart of Times Square.