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High-tech Chelsea building is expected to fetch $300m.

After selling 85 Tenth Avenue to Level 3 Communications four years ago and then buying it back two years later, Angelo Gordon, of Belvedere Capital, and partners, Irwin Cohen and Young Woo Associates, are again selling the building.

This time, they'll get to the ride a trend of big values in the neighborhood, including the $775 million sale last year of nearby 111 Eighth Avenue and the $280 million sale two years ago of Chelsea Market, and expect bids upwards of $300 million for the high-tech building..

Eastdil's Douglas Harmon--who brokered the sale of 111 Eighth and Chelsea Market as well as the sale two years ago of 85 Tenth--will fittingly broker this transaction, the bidding for which is expected to begin this week.

Harmon called the 15-story, 600K s/f building a near perfect asset because of its amenities, superior leasing, excellent light and air, as well as its location in a burgeoning Westside corridor.

"I think we're going to get a lot of attention from patient institutional money," Harmon said. "This building has such solid cash flow, about 60% of it is leased to credit worthy tenants for 15-20 years."

85 Tenth Avenue's diverse occupants include L3 Communications, backup facilities for Lehman Brothers, and governmental tenants. Chefs Mario Batali and Tom Colicchio are both opening restaurants on the building's ground floor.

Harmon indicated that the short term leases in the nearly fully occupied building offer a potential upside for buyers eager to cash in on continually improving fundamentals.

Although the property was originally a manufacturing facility for Nabisco, whose Oreo cookies were made on the premises, 85 Tenth has undergone significant renovation and is now known as a high tech building. According to Harmon, as part of a $150 million renovation L3 outfitted the building with extensive Internet capability and onsite backup power generators. During the blackout, the building was alight and experienced no interruption of electricity.

"There is going to be not just national but worldwide interest in this asset," he said.
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Author:Geiger, Daniel
Publication:Real Estate Weekly
Geographic Code:1U1MA
Date:May 4, 2005
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