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Empire State Realty Trust (ESRT) announced on Tuesday that it has entered into an all-cash agreement to acquire the Scholastic Building at 555-557 Broadway in SoHo for $386 million. The mixed-use office and retail property is currently 70% occupied. ESRT sees additional potential in leasing the vacant space, particularly a large office block of more than 110,000 square feet spread across three floors.
In a separate transaction, Scholastic confirmed it will sell the property to ESRT as part of a sale-leaseback agreement. The publishing, education, and media company will retain a 15-year lease for 222,000 square feet of office space within the building. Scholastic also sold a Missouri warehouse to Fortress Investment Group in a separate $95 million sale-leaseback deal.
Anthony E. Malkin, Chairman and CEO of ESRT, commented on the acquisition: “We are excited to bring this combination of contractual revenue, embedded growth, and significant value-creation potential from our ability to market the three uniquely large floors in a more than 110,000-square-foot block.”
The sale-leaseback transaction was brokered by Adam Spies, Josh King, and Avery Silverstein of Newmark, who represented Scholastic in the deal.
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