Date Acquired: August 5 2005
Purchase Price: $294,000,000
Date Sold: May 11, 2007
Sales Price: $430,000,000
Location: Chelsea District, New York City
Leveraged IRR: 36.41%
Somerset purchased this asset on behalf of an ultra high net worth offshore investor whose investment criteria included a “safe harbor” investment that generated predictable cash flow coupled with the opportunity for significant market appreciation. Somerset selected this particular asset due to the stability and credit of its tenant and lease expiration profile. The location of the asset, in the quickly redeveloping West Chelsea area with substantial new public and private investment due to a planned rezoning was another key factor in this investment decision. Although 98% leased at closing, Somerset devised various strategies to increase cash flow and lower operating expenses, including generating substantial new income from signage opportunities. Tenants at the time of sale included: Lehman Brothers, LVMH — Moet Hennessy, National College Sports Network — VIACOM, General Services Administration, The State of New York, Level 3 Communications, Craftsteak Restaurant and Del Posto Restaurant.