Financing Has Buyers Singing the Blues

The Blue Man Group, known for its zany three-man troupes of blue-faced, hairless performers, has sold two commercial condominiums it owned at the SoHo office building, 599 Broadway.

The company sold the fourth floor to MKG Productions, an events planning firm, for $4.2 million and the fifth for $4.5 million to the software company Infusion Development LLC. Each floor in the building is roughly 10,000 s/f in size.

Blue Man will continue to occupy the sixth floor, an expansion space it had preciously leased until 2015 from David Topping, a real estate investor who owns a number of floors in the 12-story building.

MICHAEL GLANZBERG, a broker who arranged the sales for the Blue Man Group along with his business partner CHRIS OWLES, said that the floors could have fetched more during the real estate boom – when premium condo offices were selling at near four figure rates per square foot – but that Blue Man was satisfied because it had purchased the spaces years ago and didn’t need to trade at the top of the market to pocket hefty profits.

Glanzberg and Owles are co-founders of the brokerage firm Sinvin Realty, which specializes in trendy retail and office markets in midtown south and Lower Manhattan.

Glanzberg said that finding buyers in recent months had been an obvious challenge, and that although many prospective buyers had expressed interest, few were able to arrange the financing to get a deal done.

Glanzberg noted that, before the downturn, the space would have likely appealed to an investor, potentially even David Topping, looking to profit on the city’s rising rents. With the leasing market in a tailspin however, interest shifted primarily to businesses that wanted the space for their own offices.
Glanzberg noted that, before the downturn, the Blue Man space would have likely appealed to an investor, potentially even David Topping, looking to profit on the city’s rising rents. With the leasing market in a tailspin however, interest shifted primarily to businesses that wanted the space for their own offices.
Although the profound rental reductions across the city have made leasing far more affordable, the drop in real estate prices has boosted the attractiveness of condos.

“It’s the same kind of thinking that a residential rental tenant has when they see discounts on homes and they realize that now is the time to buy a house, because now I can do it,” Glanzberg said.

Tenants are drawn to owning their own space because it means that they no longer have to pay rent and can potentially profit when they decide to sell the space.
The fourth floor of 599 Broadway sold for slightly less than the fifth Glanzberg noted because the office installation in that space will likely need more modification for the new occupant.

Located at the busy intersection of Broadway and Houston Street, one attractive feature of 599 Broadway is that large signage on the building’s Houston Street facade produces about $50,000 worth of income for each floor of the property, enough to offset the normal maintenance and condo fees that owners would otherwise have to pay.

The Blue Man Group is relocating the offices that it had in the building to the sixth floor and other space it occupies near its theater at Astor Place, facilities that the company also owns.

Sinvin Realty is also handling the sale of a building the Blue Man Group has at 238-240 East 3rd Street. That property — zoned for about 18,000 square feet of residential space — is being marketed for its potential as a larger development site.