The deal highlights creative reimagining of Manhattan's vacant office space and follows White Oak's recent loans for other non-office uses, including a self-storage project and a residential development.
Xin Capital has nabbed a $51 million loan to acquire a fully-leased retail and office assemblage in Times Square.
White Oak Real Estate Capital provided the senior secured loan for the purchase of Times Square West, a 144,500-square-foot property at 303 West 42nd Street and 300 West 43rd Street. The complex includes 17,500 square feet of ground-floor retail and 127,000 square feet of recently renovated office space.
"It's in an extremely strong market, Times Square still being one of the most prominent retail corridors in the country," said Eric Tanjeloff, Managing Principal at White Oak Real Estate Capital.
The financing will bridge Xin Capital through a rent-free buildout period for its newly signed master tenant in the office portion, which will upgrade the space into a yet-to-be-announced global food and beverage entertainment experience. Tanjeloff predicts that when the plans for the space become public, it "will garner some attention because it is so different" from what currently exists in the city.
That lease will bring the property to 100 percent occupancy. "We think that creates significant value for the owner and obviously support for our loan," said Tanjeloff.
Current retail tenants include Chick-fil-A, Smashburger, 7-Eleven, Dunkin' Donuts and Little Italy Pizza, predominantly under long-term leases signed during the pandemic at below-market rent, according to Tanjeloff. Those leases have about 15 years remaining, providing what he called a "stable foundation" for the property's cash flow.
"We are very pleased with WOREC's execution on this financing which allowed us to take
advantage of what we believe is a once in a lifetime opportunity to buy undervalued assets in
Manhattan," said Jerry Tang, Founder of Xin Capital, in a statement.
The project is an example of how Manhattan's vacant office space can be creatively reimagined for more viable uses, Tanjeloff said, citing a past $21.5 million White Oak financing of a conversion to self-storage in Tribeca, hotel conversions and other non-office uses.
The deal comes on the heels of White Oaks' recent $42.2 million senior secured loan to Related Companies for the Village at Tuxedo Reserve and a $27.2 million senior secured loan to 1784 Holdings for a self-storage project in Garden Grove, California.