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New York REIT To Acquire Twitter’s Manhattan HQs

#SchorschScoresBig #SavannaNetsBiggerReturn
July 31, 2014
If he had a Twitter account, Nicholas S. Schorsch this morning could well tweet #gottcha.

Schorsch’s New York REIT Inc. struck a deal to acquire Twitter's East Coast headquarters in Manhattan at 245 and 249 West 17th St. in New York's Chelsea neighborhood.

The property, which includes a 12-story office tower and an adjacent six-story mixed use building, contains approximately 282,000 rentable square feet. In addition to Twitter, which leases a total of 214,765 square feet in both properties, Room & Board Inc. occupies the 60,062 square feet of retail space at 249 West 17th Street and Flywheel Sports leased 3,656 square feet in the 245 building.

New York REIT agreed to pay $335 million for the property, or about $1,188/square foot.

The sellers of the property are affiliates of Savanna, a New York-based real estate private equity and asset management firm. Savanna had acquired the properties in November 2012 for just $75.75 million.

Savanna completed a $29 million capital improvement program that earned LEED Gold Certification and transformed the pair of 100 year-old buildings into modern, loft-style office space currently in vogue among tenants in the Midtown South submarket. The property's successful leasing effort was led by Newmark Grubb Knight Frank.

Twitter’s lease commenced in January of this year and runs through April 2025 and includes two 5-year options to renew. Its annualized rent totals $14.7 million and represents 75% of the property's annualized cash rental income.

Adam Spies and Doug Harmon of Eastdil Secured, along with Brian Ezratty of Eastern Consolidated, represented Savanna in the sale transaction.

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