Starwood Capital Acquires Prime New York Retail and Office Building

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Jun 11, 2012, 02:37 ET

GREENWICH, Conn., June 11, 2012 /PRNewswire/ -- Starwood Capital Group, a leading global private investment firm, announced today that it has acquired, on behalf of Starwood Distressed Opportunity Fund IX, 1372 Broadway, 21-story retail and office building centrally located in the heart of Midtown Manhattan in New York City. The building was acquired from BLDG Management. Terms of the transaction were not disclosed.

The building is located on the Northeast corner of 37th Street and Broadway, in the heavily trafficked corridor between Times Square and Herald Square. Centrally located around two major transportation hubs and multiple New York City subway lines, the building includes 571,667 square feet of office and retail space with retail featured on the ground and mezzanine levels. The property, which is fully-leased, has an extensive list of long-term credit tenants.

Chris Graham, Managing Director of Acquisitions at Starwood Capital Group, commented, "We are pleased to complete our second deal with BLDG within the past couple years. We believe this is an exceptional investment due to its high double-digit cash-on-cash returns on our fund equity over our anticipated hold period, supported by the length of the leases and credit of its tenants. Given the limited new construction in New York City, and in particular this key submarket, we expect to earn substantial upside on exit if rents increase over our hold period."

"1372 Broadway is 100 percent leased to predominantly credit tenants from a variety of industries on long term leases. We are excited to purchase a strong rent roll in one of the best office markets with rents close to market lows at a significant discount to replacement cost," said Marcos Alvarado, Senior Vice President at Starwood Capital Group. "The investment represents an excellent risk-adjusted return for our investor partners as we anticipate receiving the majority of our return from current cash flow."

Starwood Capital Group
Starwood Capital Group is a private, U.S.-based investment firm with a core focus on global real estate. Since the group's inception in 1991, the firm has raised over $14 billion of equity capital and, through its various funds, has invested $12 billion representing over $32 billion in assets. Starwood Capital Group currently has over $19 billion of assets under management. Starwood Capital Group maintains offices in Greenwich, Atlanta, San Francisco, Washington, D.C. and Los Angeles, and affiliated offices in London, Luxembourg, Paris, Mumbai and Sao Paulo. Starwood Capital Group has invested in nearly every class of real estate on a global basis, including office, retail, residential, senior housing, golf, hotels, resorts and industrial assets. Starwood Capital Group and its affiliates have successfully executed an investment strategy that includes building enterprises around core real estate portfolios in both the private and public markets. Additional information about Starwood Capital can be found at www.starwoodcapital.com.