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ATCO Scores $72M Refinance on First Garment District Buy

MetLife Investment Management Provides Funds via Five-Year Fixed Rate Loan
January 12, 2018
One year after acquiring its first Garment District asset at 240 W. 35th St. in New York City, ATCO Properties & Management (ATCO) has closed on a $72.5 million refinance through MetLife Investment Management.

The loan was structured with a five-year, fixed-rate term.

The news comes just months after ATCO’s October 2017 divestiture of a 49% stake in the 165,000-square-foot office asset to Migdal Group as part of a joint-venture partnership.

Newmark Grubb Knight Frank’s Jordan Roeschlaub and Dustin Stolly arranged the deal. Roeschlaub and Stolly are vice chairmen and co-heads of NKF Capital Markets' Debt and Structured Finance Group.

ATCO says it is in the midst of modernizing elevators in the circa-1924 building and has finished renovations to the lobby and corridors as well as improved exterior sidewalks. The 18-story property sits on 35th Street between 7th and 8th Avenues. It was previously renovated in 2009.

"In just one year, we have meaningfully increased the value and appeal of the building and better positioned it for future growth," said Neil Adamnson, chief investment officer with ATCO. The company says it is committed to offering the best-in-class experience to Garment District tenants.

Among the new transactions were a five-year, 11,070-square foot lease extension inked by Fiedelus and a 10,100-square-foot renewal with 10-year term inked by Cablevision subsidiary Newsday. Fashion company Jason Wu renewed its 11,221-square-foot lease for five years. Forensic watermarking firm Nexguard Labs and industrial parts distributor Carrier Enterprises Northeast each agreed to five-year leases, for 1,019 square feet and 4,643 square feet, respectively. In-place tenants at the building include the United Building Maintenance Corporation and the Spanish-American Institute.

Additionally, ATCO earlier this month reported that Café Metro agreed to a 12-year lease for 5,181 square feet of ground-floor retail space. The new location will open in February 2018. Capital improvements work and new leasing activity in 2017 allowed ATCO to garner the refi, it says, adding it executed 47,000 square feet in leases and renewals last year.

Diana Bell, New York City Market Reporter  CoStar Group   
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