Tony Malkin is continuing his retail buying spree.
Malkin’s Empire State Realty Trust is in contract to buy the Scholastic Building in Soho for $386 million, the company announced Tuesday.
Scholastic owns the building at 555-557 Broadway and leases the majority of the space, which includes 368,000 square feet of office and 28,000 square feet of retail along Soho’s prime shopping corridor.
Malkin said he was attracted to the property for its in-place revenue and the ability to add value by marketing the “three uniquely large floors in a more than 110,000 square feet block.”
ESRT expects the all-cash deal to close this month. A Newmark team led by Adam Spies and Josh King arranged the sale.
Scholastic put the property up for sale earlier this year, eyeing a sale-leaseback deal. The public company reportedly planned to use the proceeds from the sale for “capital allocation priorities,” reducing its debt and repurchasing shares.
The publisher occupies roughly 300,000 square feet across all but two of the office floors. As of last spring, the retail space was fully leased to Sephora and Capital One.
Scholastic bought the property in 2014 for $255 million from South Carolina-based landlord ISE America, which had owned the building since 1996.
ESRT, meanwhile, has been moving to diversify its portfolio away from office buildings into areas like multifamily and retail. The owner of the Empire State Building last year bought two retail properties in Williamsburg for $195 million.
