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Kaufman Organization

The Kaufman Organization closed on a newly formed ground lease at The Haymarket Building in Manhattan’s NoMad, valued at $34.5 million, Commercial Observer has learned.

Kaufman signed a 99-year ground lease with owner MFM Properties for the 12-story office building at 135 West 29th Street between Seventh Avenue and Avenue of the Americas, according to Kaufman.

Under the deal, Kaufman will manage the 86,000-square-foot office building, which is currently 70 percent occupied, and plans to start a renovation program for the property.

“We really built an expertise in Midtown South, as well as have built a strong expertise in forming newly created office ground leases, so this opportunity checked both those boxes,” Michael Kazmierski, president and principal of Kaufman’s investment arm, Kaufman Investments, said. “We’re still very optimistic in regard to the performance of this core Midtown South market and we think this building is well-positioned to be part of the recovery.”

The deal marks the third office asset Kaufman has closed on in the past 14 months, and 10th in recent years, Kazmierski said. That includes Kaufman signing eight ground leases, including one at 236 Fifth Avenue that it closed on in 2017.


Ground leases developed a bad reputation in recent decades — with structural issues in some legacy leases causing things like the Chrysler Building’s shockingly low sale price — but investment in the space has started to gain more momentum during the coronavirus pandemic.

For long-term owners of properties, modern ground lease structures — that aren’t improperly sized to the value of the real estate and that lack things like fair market value resets — can provide a stable cash flow and help with estate planning. And for the lease owners, they require less upfront capital and risk than buying a building outright.

“Ground leases provide a tax-efficient structure that benefits both parties,” Skyline Properties’ Robert Khodadadian, who brokered the ground lease for both sides along with Daniel Shirazi, said in a statement. “Similar to the ground lease we did with the Kaufman Organization at 236 Fifth Avenue, ground leases provide a great solution for multi-generational owners who now benefit from a hassle-free income stream for generations"

135 west 29th street
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