Grand Central Tower At 370 Lexington Lands $138 Million Reboot

Midtown’s struggling-for-a-comeback office market just got a fresh jolt of faith. Broad Street Development and KSR Capital have wrapped a $138 million refinancing and recapitalization of 370 Lexington Avenue, the prewar office tower a stone’s throw from Grand Central. The new structure pairs roughly $28 million in fresh equity from the partnership with a $110 million debt facility, retiring older financing tied to the property. Ownership says the new money is earmarked for tenant amenities and facade upgrades as leasing momentum continues to build.

Deal details and capital stack

The recapitalization combines a $28 million partnership investment with a $110 million loan provided by Acore Capital, according to Commercial Observer. The new debt package pays off an existing Invesco Real Estate loan that helped finance Broad Street’s 2018 purchase of the tower, an acquisition and mortgage that were reported at the time by The Real Deal. The recap effectively closes the loop on that earlier capital stack and, ownership says, reloads the building for its next leasing push and improvement cycle.

Owners see upside as conversions thin the herd

“We’ve owned it twice, and now it feels like we’ve owned it a third time, we feel like we’re buying it back because we love the building so much,” Broad Street principal Ray Chalme told Commercial Observer. Chalme said conversions of neighboring buildings have reduced small-suite competition and boosted demand for quality Class B assets. He told the outlet that 370 Lexington is about 92 percent leased and that ownership plans to invest roughly $10 million into tenant amenities, facade work and other capital projects.

CBRE’s Peter Griesinger arranged the financing, according to the same report, while KSR’s Abraham Kassin described the property as “an exceptionally well-located asset with strong fundamentals and long-term upside.” Taken together, the partners are clearly betting that a well-kept, transit-adjacent Class B tower can keep punching above its weight as glossier neighbors flip to other uses.

Building basics and backstory

Property records show that 370 Lexington is a roughly 26-story, prewar office tower with about 246,605 square feet and a December 2018 sale price of $190 million, according to PropertyShark. Broad Street has been marketing the building’s renovated suites and smaller floor plates to tenants leaving coworking spaces, leaning into a “graduation” pitch for firms that want a traditional lease without a massive footprint. Recent leasing activity at the property has underscored that demand, reinforcing the owners’ decision to double down with new capital.

Why the recap matters for Midtown

The recap lands at a moment when New York is still riding a wave of office-to-residential conversions that have carved millions of square feet of older inventory out of Manhattan’s office markets. That thinning pool has tightened supply for well-located offices and lifted valuations in certain submarkets, especially around major transit hubs.

A fiscal analysis from the New York City Comptroller’s office outlines the scale of that conversion pipeline and the policy shifts making it possible, a backdrop that helps explain investor interest in mid-market assets with strong transit access. The Comptroller report maps how office-to-residential deals are reshaping supply dynamics across the city and shifting where tenants can find traditional office space.

With the new financing in place, Broad Street and KSR are turning their attention to leasing the remaining renovated suites and rolling out the promised capital improvements. Expect a steady drip of lease announcements and building filings as the partners work to lock in tenants drawn to the Grand Central location and a refreshed, smaller-footprint office option that is trying to look less like a holdover and more like a comeback story.