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AR Global’s New York City REIT Buys 60,000 SF at 196 Orchard Street for Nearly $89 Million

New York City REIT Inc., a publicly registered non-traded real estate investment trust, has purchased two retail condominium units and one commercial condominium unit totaling approximately 60,297 square feet.

New York City REIT Inc., a publicly registered non-traded real estate investment trust formerly known as American Realty Capital New York City REIT, has purchased two retail condominium units and one commercial condominium unit totaling approximately 60,297 square feet across the ground level, second, third and sub-level floors at 196 Orchard Street in New York City for approximately $88.8 million, excluding closing costs.

196 Orchard Street is an 11-story condominium built in 2017 on the Lower East Side. The property is 100 percent leased by Marshalls, CVS, and Equinox. The acquisition increased the REIT’s overall portfolio occupancy from 94.6 percent as of March 31, 2019, to 94.9 percent as of July 17, 2019.

“The acquisition of three modern retail condominiums at 196 Orchard Street is an exciting transaction for [the company],” said CEO Michael Weil. “The space is fully occupied by high-quality, experiential tenants subject to long-term leases with contractual rental increases. The acquisition includes attractive long-term financing and enhances [our] overall portfolio.”

New York City REIT funded $51 million of the purchase price with proceeds from a loan from Nationwide Life Insurance Company, which is secured by a mortgage on the property. The REIT funded the remaining $37.8 million of the purchase price from cash on hand. The loan bears interest at a fixed rate of 3.85% and matures on August 1, 2029.

New York City REIT invests in properties located in the five boroughs of New York City, with a focus on Manhattan. The company closed its offering in May 2015 after raising a total of $776 million in investor equity and owns seven properties with an investment cost of $774 million.

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