RFR acquires 757 Third Ave.

RFR Holding LLC, in partnership with GREIO, a department of Citigroup Investments, has completed the purchase of the 27-story Class A office tower at 757 Third Avenue, located on the northeast corner of 47th Street in Manhattan.

The equity partnership bought the 460,000 square-foot building from Emmes & Company LLC for approximately $102 million.

"757 Third Avenue offers a steadily increasing cash-flow which is driven by the stability of the tenancy and rollover schedule," said Aby Rosen, principal of RFR. "No more than 15 percent of the building expires in any given year, with the average yearly rollover around 5 percent. This evenly spread rollover schedule will allow us to bring below market tenants to market while maintaining a stable cash-flow."

The building has a strong upside potential, given its average in-place rent of $27 per square-foot, an amount that is 39 percent below market rents in the area.

"757 Third Avenue is the one of several Manhattan office buildings that GREIO has purchased in partnership with RFR as an equity venture," said Anthony T. Niosi, a managing director of GREIO Citigroup Investments. "We are very pleased with the portfolio to date and with RFR's ability to execute the repositioning strategy of these properties. We look forward to doing more deals with RFR as they continue with their acquisition plans."

Designed by Emery Roth & Sons and constructed in 1973, 757 Third Avenue underwent a complete renovation in 1985. The former ownership performed capital upgrades over the past several years including a renovation of the building's lobby and entrances, a major overhauling of the building's HVAC system and the installation of amenities such as fiber optics, security systems and a lobby newsstand.

The building's main entrance is on Third Avenue, which opens into an impressive two-story rotunda lobby containing Italian marble and burnished bronze finishes. The property is approximately 96 percent occupied by an impressive roster of extremely credit-worthy tenants. The building's main tenant is KPMG Peat Marwick, the accounting and consulting giant, which occupies 38 percent of the building for a total of 171,808 square feet. Other tenants in the building include the law firm Stroock & Lavan; Aaronson, Rappaport; Aerotek; and the capital management firm Cohen & Steers. 757 Third is also the new home for Senator Chuck Schumer's Manhattan office. Retail tenants include Nine West and The Gap.

757 Third Avenue will be managed by RFR Realty LLC, a full-service leasing and management company. RFR Realty's president, Mark Granata, will supervise the management of the building, while Richard Farley, senior vice president/director of Leasing, will handle the leasing of the property.

"After recently selling 830 Third Avenue for an excellent return, we are excited to add another Third Avenue building to our portfolio," explained Rosen. "This offering was a terrific opportunity to purchase a high quality building in need of minimal upgrade at an extremely reasonable price. The purchase of 757 Third Avenue re-affirms our belief that the Third Avenue submarket continues to be one of Midtown's hottest office districts."

In August of this year, RFR sold 830 Third Avenue, a 14-story office tower at 51st Street, for $42 million. RFR bought 830 Third Avenue in 1994 when the property was vacant, and implemented a major renovation to reposition the building and attract a roster of high quality tenants. The 140,000 square-foot building was at full occupancy at the time of the sale. RFR Realty continues to manage the property for the new owner.