Empire State Realty Trust (ESRT) said Tuesday it had agreed to acquire 555-557 Broadway, the Scholastic Building, in an all-cash deal for $386 million. The SoHo office and retail property is currently 70% occupied, and ESRT counts lease-up of the vacant office space among the upsides of the acquisition.
Separately, Scholastic announced that it agreed to sell its headquarters to ESRT in a sale-leaseback. The publishing, education and media company has also divested a Missouri warehouse to Fortress Investment Group in a sale-leaseback valued at $95 million.
Scholastic is now on a 15-year office lease for 222,000 square feet at the SoHo property. A three-floor block of more than 110,000 square feet is currently vacant.
Anthony E. Malkin, ESRT’s chairman and CEO, said, “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.”
Adam Spies, Josh King and Avery Silverstein of Newmark represented Scholastic in the sale-leaseback.
The post ESRT Acquiring Scholastic Headquarters in $386M Sale-Leaseback appeared first on Connect CRE.