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Transactions: Unit of German bank buys NYC MOB for $332.5M (UPDATED)

Commerz Real pays $854 PSF, 4.45 cap rate for asset leased by NYU Langone

The 222 E. 41st St. building is 100 percent leased by NYU Langone Medical Center. (Photo by Frank Zimmerman, courtesy of Columbia Property Trust)

NEW YORK — In what might be the biggest single-asset medical office building (MOB) transaction ever, Eschborn, Germany-based Commerz Real, the real assets investment manager of Frankfurt-based Commerzbank AG, closed May 29 on the $332.5 million acquisition of a 25-story, 389,522 square foot medical office building (MOB) in Midtown Manhattan. The seller was Columbia Property Trust Inc. (NYSE: CXP).

The cap rate was 4.45 percent, according to the healthcare real estate (HRE) research firm Revista.

Revista says the largest single-asset MOB transaction in its database prior to this was the sale of the Baylor Charles A. Sammons Cancer Center in Dallas, which sold for $290 million in a transaction that closed June 30, 2017. In that deal, Physicians Realty Trust (NYSE: DOC) bought the 10-story, 458,396 square foot facility from Baylor Scott & White, which had first rights to acquire the building when it became available when Duke Realty (NYSE: DRE) exited the MOB business last year.

Like the Baylor Cancer Center, the 222 East 41st Street building in New York is a single-tenant facility; it is 100 percent occupied by NYU Langone Medical Center.

The previous tenant, the law firm Jones Day, had a lease set to expire in 2016. Prior to that, upon learning that the tenant didn’t plan to renew, Columbia Property Trust launched “a proactive and wide-ranging marketing campaign,” which culminated in an “innovative” 30-year, triple-net lease to for the entire building, “with almost no downtime in occupancy,” according to a Columbia news release distributed yesterday afternoon.

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