A New York landlord led by Nicholas Schorsch became the first publicly traded real estate company focused solely on the city with its listing on the New York Stock Exchange today

New York REIT Inc. has bought properties valued at about $2.7 billion, mostly in Manhattan, since 2010, when it began as a nonlisted real estate investment trust sponsored by Schorsch’s AR Capital. Schorsch is the biggest fundraiser in the nontraded REIT industry.

About $350 million in purchases are planned for this year as the company expands its holdings, which include a stake in Worldwide Plaza, a 49-story office tower on Eighth Avenue in Midtown. The shares began trading at $10.70 and closed at $10.75.

New York REIT, formerly American Realty Capital New York Recovery REIT Inc., started buying property during the earliest stages of the city’s comeback from the financial crisis. Since then, investor demand in Manhattan, perceived as one of the world’s safest real estate markets, has pushed up values of commercial buildings, which have recouped most of their value lost in the crash.

“There should be some nice locked-up gains in those properties,” said Dan Fasulo, a managing director at New York- based research firm Real Capital Analytics Inc. The REIT was “able to pick up some properties in some pretty hot submarkets in Manhattan just before things took off.”

Investment Yield

In the first quarter, Manhattan office prices averaged $696 a square foot, up from $314 a square foot in the second quarter of 2010, when New York REIT began operations, according to Real Capital. In the same period, the average capitalization rate, a measure of yield for real estate investors, dropped to 4.4 percent from 6.6 percent. A cap rate, derived by dividing a property’s net operating income by its purchase price, falls as prices rise.

New York REIT focuses on owning high-quality office and retail properties that are 80 percent or more occupied at the time of purchase, according to its annual report.

The company has an option to buy the rest of Worldwide Plaza and is seeking more retail real estate, office buildings that have space for stores, and parking garages, according to Schorsch, who is chairman and chief executive officer. The REIT won’t be competing with investors including sovereign-wealth funds for Manhattan’s most sought-after skyscrapers, he said.

“We’re not trying to buy trophy buildings on Park Avenue,” Schorsch said in an interview. “There’s no money in that.”

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