A newly-formed joint venture between Tribeca Investment Group and funds managed by PGIM Real Estate and Meadow Partners announced they have entered into a new 99-year ground lease at 295 Fifth Avenue, The Textile Building in Midtown South, Manhattan.

The joint venture plans to transform the 17-floor, 700,000-square-foot property into Class A office building with nearly $300 million repositioning program, aims to capitalize on strong demand for large floor plates in tight Midtown South office market.

”Demand and rental growth are being driven in large part by technology companies seeking to access renovated historic buildings and Class A glass and steel towers. The planned repositioning is intended to attract technology and finance sector tenants, which are the primary occupiers of large block space,” said in the statement.

“As the supply of large-block office space across the city has become increasingly constrained, opportunities to acquire properties of this size and quality are rare,” said Elliott Ingerman, Co-Founder of Tribeca Investment Group.

“In evaluating a variety of opportunities at this stage in the cycle, we recognized untapped potential to capitalize on the strong demand for this type of space – especially among growing finance and technology companies – by delivering a differentiated product with large, flexible floor plates in excess of 40,000 square feet and ceiling heights ranging up to 16 feet. We’re excited to partner with two blue-chip institutions in PGIM and Meadow to execute on our well-conceived business plan,” he added.

“Demand for Manhattan office space continues to strengthen, and the Midtown South neighborhood has been particularly attractive to tenants, outperforming the broader market as a result,” said Cathy Marcus, PGIM Real Estate’s Global Chief Operating Officer and Head of the United States.

Planned improvements at 295 Fifth Avenue comprise extensive base building work including the construction of a new lobby, the installation of new retail storefronts, the addition of attractive amenity spaces, and significant mechanical upgrades. Moreover, tenant spaces will be redeveloped into contemporary loft offices, and the joint venture will construct a large glass addition on the building’s rooftop that offers panoramic views of Midtown. A collection of best-in-class firms including CBRE and STUDIOS Architecture will be involved in the design, construction and lease-up.

295 Fifth Avenue was built by Sommerfeld & Steckler in 1920 and has been known since as “The Textile Building” in Manhattan.