Two office buildings in Manhattan

Real Estate Alert, May 19, 2004

DCD Capital, a London firm backed by Middle Eastern investors, has gone under contract to pay $45 million, or $330/sf, for 11 East 44th Street, a 136,000-sf building between Fifth and Madison Avenues in Midtown Manhattan. The price translates into an initial yield of roughly 8.6%. The building is owned by Kensico Properties, which is backed by a local investor.

Separately, DCD agreed to pay $36 million, or $321/sf, for 86 Chambers Street, a 112,000-sf building in Lower Manhattan. The building is expected to go under contract later this month. The seven-story building is primarily leased to the U.S. Attorney's Office through 2014. The price brings an initial yield of 7.5%. The seller is a joint venture between Lehman Brothers and local player RAL Cos., which is headed by Robert A. Levine. Cushman & Wakefield is handling both sales.