500 Tenth Avenue
Occupying a full block front between West 38th Street and West 39th Street in Manhattan, 500 Tenth Avenue is a 250,000-square-foot industrial building acquired by Essex Capital and net leased to DHL, the world’s largest logistics and mail company. Essex Capital bought the building pursuant to a ground lease with the right to buy the fee at a later date, structuring the deal to provide the 80-year-old seller with an estate tax benefit.
Seeing the long-term, value-enhancement potential for the building, which had vacancies and below-market rents in a part of Manhattan targeted by local officials for massive redevelopment initiatives, Essex Capital and its affiliates cleared the building and entered into a new 20-year net lease for the entire building with DHL, which was backed by Deutsche Post AG, its German parent company.
Essex Capital poured $40 million into the property, including new office space and elevators, upgraded freight elevators, and new electrical and service equipment. Essex Capital has already benefited substantially from 500 Tenth Avenue, and now the building is well poised to take advantage of local rezoning and the coming mixed-use Hudson Yards development nearby – especially the planned Hudson Boulevard, which, when completed, will be a premier commercial and residential strip on the West Side.
Since being repositioned as the DHL Building, 500 Tenth Avenue has been refinanced for $97 million with a multinational insurance company. Essex Capital retains 250,000 square feet of unused development rights on the property, positioning the company to reap further financial reward from 500 Tenth Avenue in the future.
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