Artemis buys into WeWork-anchored West Chelsea office complex
Artemis Principal Michael Bernstein and a rendering of 511-541 West 25th Street
Artemis Real Estate Partners paid nearly $155 million to buy into in an office complex on the High Line known as the Ironworks where WeWork is a major tenant.
The Maryland-based investment manager bought a roughly 95 percent stake in the trio of connected buildings at 511-541 West 25th Street in West Chelsea from PGIM Real Estate, sourced told The Real Deal.
“We were hunting for what we thought was a good-quality product at an attractive basis on the Far West Side,” Michael Bernstein, a partner based out of Artemis’ New York office, told TRD. “Kind of playing off the continued demand driven by Hudson Yards and Meatpacking.”
Artemis’ majority stake values the property at $163 million, or around $840 per square foot.
A Cushman & Wakefield team of Adam Spies, Doug Harmon Kevin Donner and Avery Silverstein negotiated the sale. The brokers could not be reached for comment.
PGIM, the real estate arm of insurance giant Prudential Financial, bought the buildings spanning 194,000 square feet in 2014 for $160 million with partner L&L Holding, which retained its 5 percent stake. Back in 2017, the partners hired Savills to market the property for $200 million.
Representatives for PGIM and L&L were not immediately available for comment.
The property is about 93 percent leased with some below-market leases rolling in the near future, giving the potential for upside.
WeWork last year signed a 15-year lease for 60,000 square feet at 511 West 25th Street, taking the majority of the building’s space. Other office tenants in the complex include Target and the public relations firm Bismarck Philips Communications and Media.
The deal is the first acquisition for Artemis out of a new core-plus investment fund the company is raising with a target close of $750 million.
Bernstein said the company plans to hold the property for a period of five to seven years.
Elsewhere in New York, Artemis owns a stake in the 1,800-unit Savoy Park apartment complex in Harlem with Fairstead Capital, and a piece of the 613,000-square-foot industrial property in Jamaica, Queens the company bought with Madison Realty Capital in 2017 for $78 million. The same Cushman & Wakefield team that negotiated the Ironworks recapitalization also brought Artemis into the Jamaica deal.
Artemis company also owns a retail condo in Chinatown along with Andrew Chung’s Innovo Group.
And last year the company sold a pair of Bowery office buildings it owned with Caspi Development and RWN Real Estate Partners for nearly $50 million.
In April, the company closed on its third value-add private equity fund – a $1.1 billion investment vehicle targeting multifamily, office, industrial, healthcare, self-storage, hospitality and retail properties in the United States. The fund’s investors include the Illinois Municipal Retirement Fund, the Virginia Retirement System, the District of Columbia Retirement Board and the Oklahoma Teachers’ Retirement System, according to PERE News.