NEW YORK CITY-Principal US Property Separate Account, an entity of Principal Global Investors, has purchased an office building on 104 W. 40th St. overlooking Bryant Park in the Midtown area for $140 million. Real estate manager Principal Real Estate Investors advised on the acquisition in a joint venture with Mermel & McLain Management LLC, a locally based asset management and investing vehicle.
The 210,000-sf building is located at the corner of the Avenue of the Americas and was built in 1962. Mrofficespace.com lists Elm West 40th Street Associates LLC as the owner of the property, although sources involved in the deal would not confirm or disclose the seller.

Current office tenants include Pergola Deli, Moffatt & Nichols, Molod Spitz & DeSantis PC, National Geographic Society, Einbinder & Dun LLP and Springs Global US Inc. Los Angeles-based CB Richard Ellis, who was not involved in this particular deal, notes that the average asking rent for 104 W. 440th St. is $68.66 per sf.

“We like this part of New York City because the vibrancy of Bryant Park and the convenient access to transportation have spurred new construction, and created a leasing velocity in the submarket that is causing real rental growth,” says Derk Taylor, director of acquisitions and dispositions for PREI. “We believe the building has a great advantage with the expected growth in rental income and utilizing the building’s expansion potential.”

In November 2005, Mermel & McLain Management LLC through its affiliate ELM West 40th Street Management LLC created and structured a purchase without brokers directly with the seller, RFR Realty. ELM West 40th Street Management LLC is the managing member of the entity that owns the property, ELM West 40th Street Associates LLC.

This is the sixth acquisition by the Principal Real Estate Investors in the Midtown Manhattan area.

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