In a landmark deal, The Peebles Corp. (No. 86 on the BE INDUSTRIAL/SERVICE list with $27.82 million in sales) signed an agreement to acquire 346 Broadway, a 13-story office building and original headquarters of the New York Life Insurance company in the city’s trendy Tribeca neighborhood.
The transaction, according to CEO R. Donahue Peebles, marks the first time an African American owned company has acquired a major commercial property south of Harlem. “This is a barrier breaker in that regard,” he says.
Peebles Corp. is set to acquire the building for $160 million and subsequently convert the 418,991 gross square foot structure into a mixed-use property featuring a boutique hotel with 170 rooms and luxury residential condominiums. “I was committed to doing business in New York and building a business here in New York. I was attracted to the location because it’s Tribeca, which still has a lot of the original character of Tribeca,” says Peebles. “And it’s a significant building that’s iconic. It fits a lot of our company’s areas of expertise. It’s a good fit for us.”
Planned building amenities are set to include a state-of-the-art fitness facility, 24/7 concierge, two levels of parking – which is much prized in the congested metropolis. “It’s an all-marble building. It’s got ceiling heights of up to 18 feet. On the second floor, where we’re going to down townhouses, it has 30 foot ceilings,” explains Peebles. “We’re going to have apartments that are going to range up to $30 million. We’re looking at a five-star boutique hotel that would be about 170 rooms.”
Despite lingering issues with the US economy, Peebles asserts that the real estate market is doing very well in New York City. “Manhattan is a global market. New York is one of the few cities that are almost immune to the domestic economy,” he says. “The economy here had a hiccup after the Lehman failure and the recession, but international buyers came in and picked up the slack nicely.” The plan, according to Peebles, is to begin construction the hotel at end of the first quarter of 2014 and construct the apartments beginning the first quarter of 2015.
This is also one of the company’s few transactions since the Great Recession hit some five years ago. More transactions are to come, with the company about to launch a new property on Miami’s coast. “This is our re-emergence,” states Peebles. “Really since 2008 to now, we’ve had one acquisition because the country as a whole was in a recession and the markets we were involved in were hit exceptionally hard.”