The landmarked building that houses the Home Depot in the Flatiron District is getting a revamp.
Williams Equities is investing $23 million, or $40 per square foot, to renovate the fourth, fifth and six floors of 28-40 W. 23rd St., two adjoining buildings that date back to the 19th century.
Renovation plans include an expanded atrium and a new rooftop terrace, according to a report yesterday from bond-rating firm KBRA.
The Home Depot location that opened in 2004 at street level will be unaffected; its lease for 118,000 square feet continues through 2036. The retailer pays a base rent of $64 per square foot, KBRA said, below the market rate of $75.
Williams is renovating the building after AT&T’s lease for 220,000 square feet expired in March. Prior to AT&T’s exit, the building was 100% leased.
The property’s largest tenant, Estee Lauder subsidiary Aramis, leases 240,000 square feet at $82 per square foot, below the market rate of $92. Its lease expires in 2028. The company initially subleased 66,000 square feet of space in 2012 but has since signed a direct lease and expanded its space four times, KBRA said.
The third tenant, financial-technology company Ramp, leases 66,000 square feet for its corporate headquarters with a lease expiring in 2029. Its rent is $80 per square foot.
In its report, KBRA noted the building faces “concentrated rollover risk” around the time its new $155 million mortgage comes due. The five-year loan carries a 6.1% interest rate and replaces an older $140 million mortgage with a 3.9% rate. A $13 million down payment was put up by Williams Equities, an investment firm founded in 1926 that holds interests in 12 New York office buildings each with more than 3 million square feet.
The address 28-40 W. 23rd consists of two adjoining properties holding 600,000 square feet, one 6 stories high, and the other 12. The building at 28 W. 23rd was built as a department store in 1878 and features a white cast-iron exterior façade, custom decorative pillars, and loft-style floor to ceiling windows. The property at 40 W. 23rd was built a little later and has a stone facade.
A spokesman for Williams had no immediate comment.
Aaron Elstein , 2024-05-16 19:19:27
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