As tech stocks struggle, a prominent startup investor is buying the dip in another beleaguered sector: New York City’s office market.
AlleyCorp, the venture capital firm led by entrepreneur Kevin Ryan, bought the office building at 174 Mott Street in Nolita for $41 million from affiliates of Jack Jangana’s Continental Equities and investor Juergen Ostertag, records show.
The six-story building spans just over 32,000-square-feet, meaning AlleyCorp paid close to $1,300 per square foot. PincusCo first reported the sale.
Continental Equities bought the property for $8.9 million in 2006, according to records, which also list the building’s address as 368 Broome Street. A decade later, Jangana sold a 25 percent stake in the building for $11 million to Ostertag, who was then a partner at the law firm Pryor Cashman.
Jangana’s company secured multiple loans for the property over the years. By 2019, NASA Federal Credit Union held a $25.6 million loan on it, records show.
The entire building was recently available for lease and sale, according to marketing materials, meaning AlleyCorp has free rein to redesign the interior to its needs or those of one of its portfolio companies. Other tech firms, including Google, have made similar moves in New York.
AlleyCorp is led by Kevin Ryan, a New York City tech investor who first gained notoriety during the dot-com boom as CEO of DoubleClick, an online advertising company that Google bought for $3.1 billion in 2007. His other investments have included Business Insider, online wedding registry Zola and e-commerce startup Gilt.
Jangana is perhaps best known for his partnership with developer Joel Schreiber, WeWork’s first investor. The pair partnered to buy the Broadway Trade Center, a 1 million-square-foot historic department store in Los Angeles, for $130 million in 2014. The property is now facing foreclosure from its lender, an affiliate of Barry Sternlicht’s Starwood Capital.
Schreiber recently put the property’s ownership entity into bankruptcy to stave off the foreclosure, but Jangana and members of his family filed a motion to dismiss the bankruptcy filing, which they argued was a waste of money that they did not consent to, according to court filings.
Jangana’s not the only party involved in the Nolita office deal with a WeWork connection. The co-working firm, then led by Neumann, acquired AlleyCorp-backed social media platform Meetup for $156 million in 2017.
Continental Equities did not immediately return a request to comment nor did Alley Corp.
Contact Keith Larsen