The five-story, 6,000-square-foot Times Square property between Avenue of the Americas and Seventh Avenue is home to a Chinese restaurant and residential and office tenants, all paying below market rents, according to Steven Kachanian, the principal at Klosed Properties.
“The main element of this deal is really the restaurant,” Mr. Kachanian said.
John’s Shanghai occupies 3,000 square feet spanning the first and second floors. The restaurant pays less than $100 per square foot in rent and its lease expires next year.
The buyers hired Alex Picken of Picken Real Estate to market the restaurant space to restaurant and bar operators.
Mr. Kachanian said the seller was a couple who bought the property in 1973 for less than $200,000.
Chun “Jon” Ha, the principal broker at Accel Real Estate, represented both sides in the deal. Mr. Ha didn’t immediately respond to a request for comment.
A couple of apartments and offices are above the restaurant, Mr. Kachanian said. Two-bedrooms in the building are renting for $2,100 per month, but he said they can clean them up and put them on the market for $3,200. In the office space, tenants are paying $35 a foot.
“Because of the growth in the area it made sense for us,” Mr. Kachanian said. “We’re going in at a lower yield. We’re very confident we will reposition it in two years.”