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Columbia Property Trust, Normandy Real Estate Tackle 799 Broadway Redevelopment with New Joint Venture

Columbia to Own 50% of the Building as Part of $300M Project to Add Six Floors of Office Space
September 14, 2018
Credit: Binyan Studios

Columbia Property Trust, the office-focused real estate investment trust pursuing development opportunities in its target markets of Manhattan, San Francisco and Washington, D.C., has formed a strategic venture with investment manager Normandy Real Estate Partners to jointly redevelop 799 Broadway, a 105,000-square-foot office tower in Midtown South.

Columbia Property Trust will own 50 percent of the property, located in Greenwich Village at 11th Street. The $300 million redevelopment envisions the corner building as a loft-style office standing 12 floors and spanning 185,000 square feet. The building will be razed this fall, with construction to begin by the end of the year. Work is expected to complete in the second half of 2020.

"This project is exciting to us for two reasons. First, it gives us the opportunity to work with Normandy to deliver a modern, boutique Class-A office space in the Greenwich Village submarket, which has ideal fundamentals for development - very little competitive stock and strong appetite," said Columbia Property Trust Chief Executive Nelson Mills. "Second, by partnering with a world-class company to complete a ground-up development project in our largest market, we’ll be able to strengthen our operational expertise and core competencies, in line with our long-term strategy to provide further growth potential within our portfolio."

Architectural firm Perkins+Will is leading design efforts for the joint-venture developers.

The project’s scope will add about six floors and more than 75,000 square feet. Currently a masonry building, it will be rescaled in floor-to-ceiling glass with a stacked box design. Ceilings will rise to 15 feet and floor plates readjusted. 799 Broadway currently carries an average floor plate size of 15,000 square feet, according to CoStar data. Those will change to range from 3,600 to 22,000 square feet each.

Normandy Real Estate partner Jeffrey Gronning said that the redeveloped building’s high-end amenities and features "will be ideally suited for tenants seeking a creative and collaborative environment and should benefit from the limited supply of newly developed properties in this highly desirable neighborhood."

Morristown, New Jersey-based Normandy Real Estate first acquired 799 Broadway from investment consulting firm Cambridge Associates, paying $101 million, or about $962 per square foot, according to CoStar data.

Columbia Property Trust is no stranger to strategic and joint ventures. It already has such agreements with global financial firm Allianz and New York-based developer L&L Holding. The REIT has said it will look for boutique-sized office buildings with unique architectural features. Its Manhattan portfolio includes office buildings such as 114 Fifth Ave., 315 Park Ave. S. and 149 Madison Ave.

Diana Bell, New York City Market Reporter  CoStar Group   
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