As tech stocks struggle, a prominent startup investor is buying into the decline in another battered 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 subsidiaries 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 almost $1,300 per square foot. PincusCo first reported the sale.
Continental Equities purchased the property in 2006 for $8.9 million, according to records that also list the building’s address as 368 Broome Street. A decade later, Jangana sold a 25 percent interest in the building for $11 million to Ostertag, then a partner in the law firm Pryor Cashman.
Jangana’s company secured several loans for the property over the years. As of 2019, NASA Federal Credit Union held a $25.6 million loan, records show.
The entire building was recently available for rent and sale, according to marketing materials, meaning AlleyCorp is free to redesign the interior to suit its needs or those of one of its portfolio companies. Other tech companies, including Google, have made similar moves in New York.
AlleyCorp is led by Kevin Ryan, a New York City tech investor who first rose to prominence 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 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 initial investor. The couple teamed up to purchase 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, a subsidiary of Barry Sternlicht’s Starwood Capital.
Schreiber recently bankrupted the property’s ownership company to stave off foreclosure, but Jangana and members of his family filed a motion to dismiss the bankruptcy filing, which they say was a waste of money, which court records show they didn’t agree to.
Jangana isn’t the only party involved in the Nolita office deal with a WeWork connection. The co-working company, then run by Neumann, acquired AlleyCorp-backed social media platform Meetup for $156 million in 2017.
Continental Equities did not immediately return a request for comment, nor did Alley Corp.